S.F. 475 Section 1. NEW SECTION . 422.10A Home modification tax 1 credit. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Age in place” means the ability to live in one’s own 5 home and community safely, independently, and comfortably, 6 regardless of age, income, or ability level. 7 b. “Dependent” has the same meaning as provided by the 8 Internal Revenue Code. 9 c. “Disability” means the same as defined in 42 U.S.C. 10 §12102. 11 d. (1) “Eligible individual” means an individual who has 12 net income for the tax year equal to two hundred fifty percent 13 or less of the United States poverty level, as defined by the 14 most recently revised poverty income guidelines published by 15 the United States department of health and human services, and 16 who meets one of the following requirements: 17 (a) The individual has a disability. 18 (b) The individual has a dependent with a disability. 19 (c) The individual, or a dependent of the individual, has 20 a chronic condition the progression of which will require a 21 permanent modification or permanent technology enhancement to 22 the individual’s or dependent’s primary residence within three 23 years in order to allow the individual or dependent to remain 24 in the home and age in place. 25 (2) In order to qualify as an eligible individual, the 26 individual or the dependent must obtain a signed verification 27 from the individual’s or dependent’s primary physician 28 documenting the presence of one of the requirements in 29 subparagraph (1), subparagraph divisions (a) through (c). 30 (3) For purposes of determining the net income threshold in 31 subparagraph (1), the combined net income of a husband and wife 32 shall be considered. 33 e. “Home modification expenses” means expenses incurred in 34 the permanent modification or permanent technology enhancement 35 -1- LSB 1836XS (2) 86 mm/sc 1/ 4

S.F. 475 of a home that permits the resident to remain in the home. The 1 department shall establish criteria, by rule, for determining 2 what constitutes a home modification expense. 3 f. “Physician” means an individual authorized to practice 4 medicine and surgery or osteopathic medicine and surgery under 5 the laws of any state. 6 2. The taxes imposed under this division, less the credits 7 allowed under section 422.12, shall be reduced by a home 8 modification tax credit equal to the first two thousand five 9 hundred dollars of unreimbursed home modification expenses paid 10 or incurred by an eligible individual during the tax year in 11 connection with residential property located in Iowa that is 12 the primary residence of the eligible individual or a dependent 13 of the eligible individual. 14 3. Any credit in excess of the tax liability is refundable. 15 In lieu of claiming a refund, the taxpayer may elect to have 16 the overpayment shown on the taxpayer’s final, completed return 17 credited to the tax liability for the following tax year. 18 4. This section shall not be construed to prohibit 19 a taxpayer from deducting home modification expenses in 20 determining net income or taxable income for state income tax 21 purposes if otherwise allowed under state law. 22 5. The department shall adopt rules under chapter 17A 23 to administer this section, including but not limited to 24 rules establishing allowable home modification expenses. 25 In determining allowable home modification expenses, the 26 department shall consult with the prevention of disabilities 27 policy council established under chapter 225B. For purposes 28 of providing consultation to the department pursuant to this 29 subsection, the prevention of disabilities policy council shall 30 seek input from stakeholder groups in this state, including 31 but not limited to the department of human services, the 32 department for the blind, the department of human rights, the 33 department of education, including the division of vocational 34 rehabilitation services, and the statewide independent living 35 -2- LSB 1836XS (2) 86 mm/sc 2/ 4

S.F. 475 council. 1 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 2 retroactively to January 1, 2015, for tax years beginning on 3 or after that date. 4 Sec. 3. APPLICABILITY. This Act applies to home 5 modification expenses paid or incurred on or after the 6 effective date of this Act. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill creates a home modification tax credit available 11 against the individual income tax for the first $2,500 of 12 unreimbursed home modification expenses paid or incurred by 13 an eligible individual during the tax year in connection with 14 residential property located in Iowa that is the primary 15 residence of the eligible individual or a dependent of the 16 eligible individual. 17 An individual is an “eligible individual” if the individual 18 does not have net income (including his or her spouse’s net 19 income) in excess of 250 percent of the U.S. poverty level, 20 and if the individual meets one of the other conditions 21 specified in the bill. The individual must be disabled or have 22 a dependent who is disabled, or the individual or dependent of 23 the individual must have a chronic condition that will require 24 a permanent modification or permanent technology enhancement to 25 the primary residence within three years in order to allow the 26 individual or the individual’s dependent to remain at home and 27 age in place. The disability or chronic condition requirements 28 must be documented by a signed verification from the primary 29 physician of the individual or dependent. “Age in place”, 30 “dependent”, “disability”, and “physician” are all defined in 31 the bill. 32 The tax credit is refundable. To the extent the home 33 modification expenses are otherwise deductible under Iowa law 34 for state income tax purposes, the bill allows the expenses to 35 -3- LSB 1836XS (2) 86 mm/sc 3/ 4

S.F. 475 be deducted and claimed under the home modification tax credit. 1 The bill defines “home modification expenses” as expenses 2 incurred in the permanent modification or permanent technology 3 enhancement of a home that permits the resident to remain in 4 the home, but requires the department of revenue (department) 5 to adopt rules establishing allowable home modification 6 expenses and criteria for determining what constitutes home 7 modification expenses. In adopting rules, the department is 8 required to consult with the prevention of disabilities policy 9 council (council), and the council is required to consult with 10 various stakeholders. 11 The bill applies retroactively to tax years beginning on or 12 after January 1, 2015. The bill applies to home modification 13 expenses paid or incurred on or after July 1, 2015. 14 -4- LSB 1836XS (2) 86 mm/sc 4/ 4