Senate Study Bill 3068 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON VETERANS AFFAIRS BILL BY CHAIRPERSON BEALL) A BILL FOR An Act creating the hire a hero tax credit and including 1 retroactive applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5397XC (3) 84 aw/sc

S.F. _____ Section 1. NEW SECTION . 422.11I Hire a hero tax credit. 1 1. The taxes imposed under this division, less the credits 2 allowed under section 422.12, shall be reduced by a hire a hero 3 tax credit. An employer who hires and employs an eligible 4 employee is eligible to claim the tax credit. 5 2. As used in this section: 6 a. “Eligible employee” means a member of the national 7 guard, as that term is defined in section 29A.1, employed on 8 a permanent full-time or part-time basis for at least one 9 thousand five hundred hours, on an annualized basis, and at 10 least thirty hours per week each week during the tax year. 11 The national guard member shall not be an eligible employee 12 if the national guard member was hired to replace a national 13 guard member whose employment was terminated within the 14 twelve-month period preceding the date of first employment, 15 unless the national guard member being replaced left employment 16 voluntarily without good cause attributable to the employer 17 or the national guard member was discharged for misconduct in 18 connection with the national guard member’s employment. 19 b. “Employer” includes a self-employed person who meets the 20 definition of eligible employee. 21 c. “Military service” means federal service, state active 22 duty, or state military service as defined in section 29A.1. 23 3. The allowable credit shall be an amount equal to the sum 24 of the following: 25 a. One thousand dollars for each eligible employee hired for 26 employment in this state during the tax year. 27 b. Five hundred dollars for each eligible employee employed 28 in this state during a tax year subsequent to the tax year that 29 the employee was hired for employment in this state. 30 c. In addition to the credit amount in paragraph “a” or “b” , 31 five hundred dollars for each eligible employee who performs at 32 least thirty days of military service during the tax year while 33 employed by the employer. 34 4. Any credit in excess of the tax liability shall be 35 -1- LSB 5397XC (3) 84 aw/sc 1/ 3

S.F. _____ refunded. In lieu of claiming a refund, a taxpayer may 1 elect to have the overpayment shown on the taxpayer’s final, 2 completed return credited to the tax liability for the 3 following tax year. 4 5. An individual may claim the tax credit allowed a 5 partnership, limited liability company, S corporation, estate, 6 or trust electing to have the income taxed directly to the 7 individual. The amount claimed by the individual shall be 8 based upon the pro rata share of the individual’s earnings of a 9 partnership, limited liability company, S corporation, estate, 10 or trust. 11 Sec. 2. Section 422.33, Code Supplement 2011, is amended by 12 adding the following new subsection: 13 NEW SUBSECTION . 11. The taxes imposed under this division 14 shall be reduced by a hire a hero tax credit. The taxpayer 15 shall claim the tax credit according to the same requirements 16 and calculated in the same manner as provided in section 17 422.11I. 18 Sec. 3. Section 422.60, Code Supplement 2011, is amended by 19 adding the following new subsection: 20 NEW SUBSECTION . 14. The taxes imposed under this division 21 shall be reduced by a hire a hero tax credit. The taxpayer 22 shall claim the tax credit according to the same requirements 23 and calculated in the same manner as provided in section 24 422.11I. 25 Sec. 4. RETROACTIVE APPLICABILITY. This Act applies 26 retroactively to January 1, 2012, for eligible employees hired 27 or employed on or after that date. 28 EXPLANATION 29 This bill creates the hire a hero tax credit for purposes 30 of the state individual and corporate income taxes and the 31 franchise tax. The tax credit is available for employers 32 in the amount of $1,000 per eligible employee for the year 33 in which the eligible employee is hired, $500 for each year 34 of employment subsequent to the year of hiring, and $500 35 -2- LSB 5397XC (3) 84 aw/sc 2/ 3

S.F. _____ for each year an eligible employee is called to at least 30 1 days of military service. Eligible employees are members of 2 the national guard who are employed full-time or at least 30 3 hours per week permanent part-time. The bill provides that 4 a national guard member shall not be an eligible employee if 5 the national guard member was hired to replace a national 6 guard member whose employment was terminated in the previous 7 12 months unless the national guard member being replaced 8 left voluntarily or was discharged for misconduct. The tax 9 credit applies retroactively to tax years beginning on or after 10 January 1, 2012. 11 -3- LSB 5397XC (3) 84 aw/sc 3/ 3