Senate
File
2163
-
Introduced
SENATE
FILE
2163
BY
SODDERS
A
BILL
FOR
An
Act
relating
to
the
calculation
of
the
amount
of
the
child
1
and
dependent
care
tax
credit,
and
including
effective
date
2
and
retroactive
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
5622XS
(1)
85
mm/sc
S.F.
2163
Section
1.
Section
422.12C,
subsection
1,
unnumbered
1
paragraph
1,
Code
2014,
is
amended
to
read
as
follows:
2
The
taxes
imposed
under
this
division
,
less
the
amounts
3
of
nonrefundable
credits
allowed
under
this
division
,
shall
4
be
reduced
by
a
child
and
dependent
care
credit
equal
to
the
5
following
percentages
of
the
federal
child
and
dependent
care
6
credit
provided
in
section
21
of
the
Internal
Revenue
Code
,
7
without
regard
to
whether
or
not
the
federal
credit
was
limited
8
by
the
taxpayer’s
federal
tax
liability
:
9
Sec.
2.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
10
immediate
importance,
takes
effect
upon
enactment.
11
Sec.
3.
RETROACTIVE
APPLICABILITY.
This
Act
applies
12
retroactively
to
January
1,
2012,
for
tax
years
beginning
on
13
or
after
that
date.
14
EXPLANATION
15
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
16
the
explanation’s
substance
by
the
members
of
the
general
assembly.
17
This
bill
relates
to
the
Iowa
child
and
dependent
care
tax
18
credit
available
against
the
individual
income
tax.
The
Iowa
19
child
and
dependent
care
tax
credit
is
a
refundable
credit
20
calculated
as
a
percentage
of
the
nonrefundable
federal
child
21
and
dependent
care
tax
credit,
depending
on
the
Iowa
net
income
22
of
the
taxpayer.
23
Iowa
Administrative
Code
701-42.15(1),
which
governs
the
24
computation
of
the
Iowa
credit,
was
amended
in
2012
to
specify
25
that
for
taxpayers
whose
federal
credit
is
limited
to
their
26
federal
tax
liability,
the
Iowa
credit
shall
be
computed
27
based
on
the
lesser
amount.
In
other
words,
the
amount
of
28
the
Iowa
credit
is
limited
to
a
percentage
of
the
federal
29
credit
actually
claimed
against
federal
tax
liability,
not
30
a
percentage
of
the
total
federal
credit
the
taxpayer
was
31
eligible
to
claim
against
federal
tax
liability.
32
The
bill
amends
Code
section
422.12C
to
provide
that
the
33
Iowa
credit
will
be
calculated
as
a
percentage
of
the
federal
34
credit,
whether
or
not
the
federal
credit
was
limited
by
the
35
-1-
LSB
5622XS
(1)
85
mm/sc
1/
2
S.F.
2163
taxpayer’s
federal
tax
liability.
1
The
bill
takes
effect
upon
enactment
and
applies
2
retroactively
to
January
1,
2012,
for
tax
years
beginning
on
3
or
after
that
date.
4
-2-
LSB
5622XS
(1)
85
mm/sc
2/
2