House File 124 - Introduced HOUSE FILE 124 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 63) A BILL FOR An Act relating to the Iowa educational savings plan trust by 1 modifying the deduction of contributions from the individual 2 income tax and including retroactive applicability 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1498HV (1) 86 mm/sc
H.F. 124 Section 1. Section 422.7, subsection 32, paragraph a, Code 1 2015, is amended to read as follows: 2 a. Subtract the maximum contribution that may be deducted 3 for Iowa income tax purposes as a participant in the Iowa 4 educational savings plan trust pursuant to section 12D.3, 5 subsection 1 , paragraph “a” . For purposes of this paragraph, 6 a participant who makes a contribution on or before the 7 date prescribed in section 422.21 for making and filing an 8 individual income tax return, excluding extensions, may elect 9 to be deemed to have made the contribution on the last day of 10 the preceding calendar year. The director, after consultation 11 with the treasurer of state, shall prescribe by rule the 12 manner and method by which a participant may make an election 13 authorized by the preceding sentence. 14 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 15 retroactively to January 1, 2015, for tax years beginning on 16 or after that date. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill relates to the Iowa educational savings plan 21 trust, also known as the Iowa college savings 529 plan. 22 The bill amends the tax year for which a contribution to 23 the trust may be deducted for Iowa income tax purposes. Under 24 current law, a contribution to the trust must be made during 25 the calendar year in order to be deductible for Iowa income 26 tax purposes for that tax year. The bill allows a participant 27 who makes a contribution to the trust on or before the Iowa 28 income tax return filing deadline (April 30 for calendar year 29 tax filers), excluding extensions, to elect to have that 30 contribution treated as though it was made on the last day of 31 the preceding calendar year, thereby allowing the participant 32 to claim the income tax deduction for the most recently 33 completed tax year. The bill requires the director of revenue, 34 after consultation with the treasurer of state, to prescribe by 35 -1- LSB 1498HV (1) 86 mm/sc 1/ 2
H.F. 124 rule the manner and method by which a participant may make this 1 election. The bill applies retroactively to January 1, 2015, 2 for tax years beginning on or after that date. 3 -2- LSB 1498HV (1) 86 mm/sc 2/ 2