HSB 203 (LSB 1542YC (2) 85)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS)

A BILL FOR

An Act providing an individual income tax credit for certain eligible psychiatrists and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  422.11E  Eligible psychiatrist tax credit.
   1.  As used in this section, unless the context otherwise requires:
   a.  “Educational loan” means the same as defined in section 261F.1.
   b.  “Eligible psychiatrist” means a taxpayer who meets all the following criteria:
   (1)  The taxpayer is a psychiatrist primarily practicing within a mental health professional shortage area.
   (2)  The taxpayer has an amount of educational loan debt that was incurred in furtherance of the postsecondary education of the taxpayer.
   (3)  The taxpayer is not delinquent or in arrears in the repayment of the taxpayer’s educational loan debt.
   c.  “Mental health professional shortage area” means the same as defined in section 135.180.
   d.  “Psychiatrist” means an individual who is licensed to practice medicine and surgery or osteopathic medicine and surgery under chapter 148 and who is engaged in the full-time practice of medicine and surgery or osteopathic medicine and surgery specializing in psychiatry.
   e.  “State income tax liability” means the taxes computed under section 422.5, less the amounts of refundable and nonrefundable credits allowed under this division except the credits for withheld tax and estimated tax paid under section 422.16, and computed without regard to the credit in this section.
   2.  The taxes imposed under this division, less the credits allowed under this division except the credit in this section and the credits for withheld tax and estimated tax paid under section 422.16, shall be reduced by an eligible psychiatrist tax credit to an eligible psychiatrist. To be allowed the credit, an eligible psychiatrist must meet the following requirements:

   a.  The eligible psychiatrist’s tax return on which the credit is claimed is timely filed, including any extension of time to file.
   b.  The eligible psychiatrist is not currently delinquent in filing any tax return with this state nor does the eligible psychiatrist have delinquent accounts, charges, fees, loans, taxes, or other indebtedness owed to this state or a political subdivision of this state, excluding educational loan indebtedness.
   3.
  a.  The credit shall be an amount equal to the eligible psychiatrist’s state income tax liability for the tax year. If the taxpayer is not an eligible psychiatrist for the entire tax year, the maximum amount of the credit for the taxpayer shall equal the maximum amount of the credit for the tax year, divided by twelve, multiplied by the number of months in the tax year the taxpayer was an eligible psychiatrist. The credit shall be rounded to the nearest dollar. If the taxpayer is an eligible psychiatrist any part of the month, the taxpayer shall be considered an eligible psychiatrist for the entire month.
   b.  The maximum amount that may be refunded to a taxpayer in any tax year the credit allowed under this section is claimed shall not exceed the sum of the amount withheld for the tax year from the taxpayer’s wages or other income pursuant to section 422.16, plus the amount paid as estimated tax by the taxpayer for the tax year pursuant to section 422.16.
   4.  The taxpayer is required to provide all of the following to the department:
   a.  A written statement from an appropriate supervisor, or, if the taxpayer has no supervisor, from the taxpayer, verifying that the taxpayer met the requirements of subsection 1, paragraph “b”, subparagraph (1), for the months for which the credit under this section is claimed.
   b.  Information sufficient to verify that the taxpayer met the requirements in subsection 1, paragraph “b”, subparagraphs (2) and (3), for the months for which the credit under this section is claimed.
   c.  Any other information the department deems relevant and appropriate to verify a taxpayer’s eligibility for the credit allowed under this section.
   5.  The director of revenue shall adopt rules to implement and administer this section.
    Sec. 2.  EFFECTIVE DATE.  This Act takes effect January 1, 2014.
    Sec. 3.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2014.
EXPLANATION
   This bill creates an individual income tax credit for an individual who is an eligible psychiatrist for the entire tax year. “Eligible psychiatrist” is defined as an individual who is engaged in the full-time practice of psychiatry within a mental health professional shortage area in this state, as that term is defined in the bill, and who has educational loan debt related to the individual’s postsecondary education and is not delinquent or in arrears in the repayment of that educational loan debt. In order to be allowed the credit, the eligible psychiatrist’s income tax return must be timely filed and the eligible psychiatrist must not be currently delinquent in filing any other tax return with this state, or have any delinquent accounts, charges, fees, loans, taxes, or other indebtedness owed this state or its political subdivisions, excluding educational loan indebtedness.
   The tax credit is equal to the eligible psychiatrist’s state income tax liability for the tax year. “State income tax liability” is defined as the taxes computed under Code section 422.5, less the amounts of refundable and nonrefundable credits allowed under Code chapter 422, division II, except the credits for withheld tax and estimated tax paid under Code section 422.16, and computed without regard to the tax credit provided in the bill. If the individual is not an eligible psychiatrist for the entire tax year, the amount of the credit is prorated based upon the months the individual qualifies as an eligible psychiatrist. The maximum amount that may be refunded to a taxpayer in any year the eligible psychiatrist tax credit is claimed shall not exceed the sum of the taxpayer’s withholding on wages or other income for that year, plus the estimated tax payments made for that year.
   To claim the eligible psychiatrist tax credit, a taxpayer is required to provide the department of revenue with a written statement from an appropriate supervisor verifying that the taxpayer was an eligible taxpayer for the months for which the tax credit is claimed. If the taxpayer has no supervisor, the written statement shall be provided by the taxpayer. The taxpayer is also required to provide the department information relating to the educational loan debt of the taxpayer, and any other information the department deems relevant and appropriate to verify the taxpayer’s eligibility for the credit.
   The bill takes effect January 1, 2014, and applies to tax years beginning on or after that date.