H.F. 370 Section 1. NEW SECTION . 422.10A Parent investment tax 1 credit. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Dependent” has the same meaning as provided by the 5 Internal Revenue Code. 6 b. “Earned income” means the same as defined in section 32 7 of the Internal Revenue Code. 8 c. “Public assistance program” means the family investment, 9 food assistance, and medical assistance programs administered 10 by the department of human services. 11 2. The taxes imposed under this division, less the credits 12 allowed under section 422.12, shall be reduced by a parent 13 investment tax credit equal to one of the following amounts: 14 a. For a married person who meets the requirements of 15 subsection 3, five hundred dollars. 16 b. (1) For a married person who meets the requirements 17 of subsection 3 and who also meets one of the requirements 18 of subparagraph (2) or (3) of this paragraph, one thousand 19 dollars. 20 (2) The person provided private instruction in this state in 21 accordance with chapter 299A to at least one dependent of the 22 person during the tax year, which dependent did not attend a 23 public school or an accredited nonpublic school. 24 (3) The person has one or more dependents that attended a 25 public school or an accredited nonpublic school in this state 26 and the person provided at least one hundred eighty hours of 27 volunteer service during the tax year to the school or schools. 28 The person is required to have a written statement from a 29 school administrator verifying the number of hours of volunteer 30 service the person provided to the school during the year. 31 3. To be eligible for the credit provided in this section, a 32 married person must meet all of the following requirements: 33 a. The person is a resident of this state. 34 b. The person has a dependent who during the tax year was 35 -1- LSB 1375YH (5) 86 mm/sc 1/ 3

H.F. 370 enrolled in this state in a preschool program or in any grade 1 from kindergarten through grade twelve, or who received private 2 instruction in this state in accordance with chapter 299A. 3 c. The person, the person’s spouse, and the person’s 4 dependents are not participating in a public assistance 5 program. 6 d. The amount of earned income received by the person for 7 the tax year does not exceed ten thousand dollars. 8 e. The person’s spouse is not claiming the credit provided 9 in this section. 10 4. If the requirement in subsection 3, paragraph “c” , is not 11 met for the entire tax year, the maximum amount of the credit 12 for which the taxpayer is eligible shall be prorated and the 13 amount of the credit for the taxpayer shall equal the maximum 14 amount of credit for which the taxpayer is eligible for the tax 15 year, divided by twelve, multiplied by the number of months in 16 the tax year the requirements of subsection 3, paragraph “c” , 17 were met. If the person, the person’s spouse, or the person’s 18 dependents are participating in a public assistance program 19 during any part of the month, the person shall be considered as 20 participating in the public assistance program for the entire 21 month. 22 5. Any credit in excess of the tax liability is not 23 refundable but the excess for the tax year may be credited to 24 the tax liability for the following tax years until depleted. 25 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 26 retroactively to January 1, 2015, for tax years beginning on 27 or after that date. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill creates a parent investment tax credit available 32 against the individual income tax for a married person who 33 meets certain requirements specified in the bill. First, the 34 person must be an Iowa resident and must have a dependent 35 -2- LSB 1375YH (5) 86 mm/sc 2/ 3

H.F. 370 enrolled in Iowa in a preschool program or in any grade from 1 kindergarten through grade 12, or receiving private instruction 2 in this state in accordance with Code chapter 299A. Second, 3 the person, the person’s spouse, and the person’s dependents 4 (person’s family) cannot be participating in a public 5 assistance program, defined in the bill to mean the family 6 investment, food assistance, and medical assistance programs 7 administered by the department of human services. Third, 8 the person’s earned income for the tax year must not exceed 9 $10,000. “Earned income” and “dependent” are defined in the 10 bill. The parent investment tax credit may only be claimed by 11 one spouse. 12 The credit is equal to $500. However, the credit is equal 13 to $1,000 if the person also provides private instruction to 14 the person’s dependent in this state during the tax year in 15 accordance with Code chapter 299A or, if the dependent is 16 enrolled in school, the person volunteers at least 180 hours 17 with the school during the tax year. The person is required to 18 obtain a written statement from the school verifying the number 19 of hours the person volunteered during the tax year. 20 If a person’s family participated in a public assistance 21 program for part of the year, but the person otherwise meets 22 the requirements for the tax credit, the amount of tax credit 23 is prorated based upon the number of months during the tax 24 year the person’s family was not participating in a public 25 assistance program. 26 The credit is nonrefundable, but any excess tax credit may be 27 carried forward to future tax years until fully depleted. 28 The credit applies retroactively to tax years beginning on 29 or after January 1, 2015. 30 -3- LSB 1375YH (5) 86 mm/sc 3/ 3