Senate File 2115 - Introduced SENATE FILE 2115 BY CHELGREN A BILL FOR An Act creating a private education tax credit available 1 against the individual income tax and including effective 2 date and applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1909XS (2) 87 mm/sc/jh

S.F. 2115 Section 1. NEW SECTION . 422.10C Private education tax 1 credit. 2 1. For purposes of this section, “dependent” means the same 3 as defined in section 422.12. 4 2. The taxes imposed under this division, less the credits 5 allowed under section 422.12, shall be reduced by a private 6 education tax credit equal to the sum of the following amounts 7 for each dependent of the taxpayer: 8 a. The amounts that the taxpayer has paid to others for 9 tuition and textbooks of the dependent in grades kindergarten 10 through twelve attending a nonpublic elementary or secondary 11 school situated in Iowa, which school is accredited or approved 12 under section 256.11, which is not operated for profit, and 13 which adheres to the provisions of the federal Civil Rights 14 Act of 1964 and chapter 216. For purposes of this paragraph 15 “a” only, “textbooks” and “tuition” mean the same as defined in 16 section 422.12. 17 b. The amounts that the taxpayer has paid to others for 18 qualified educational expenses of the dependent receiving 19 competent private instruction, independent private instruction, 20 or private instruction in this state under chapter 299A. 21 For purposes of this paragraph only, “qualified educational 22 expenses” means expenses incurred by a taxpayer that are 23 directly related to providing competent private instruction, 24 independent private instruction, or private instruction for 25 a dependent of that taxpayer in this state under chapter 26 299A. “Qualified educational expenses” includes but is not 27 limited to textbooks, payment to a licensed or accredited 28 tutor or practitioner, curriculum materials, tuition or fees 29 for live or online education programs, education materials and 30 services for a child with disabilities, standardized test fees, 31 transportation expenses, and computer and internet access fees. 32 3. The credit shall not exceed an amount per dependent equal 33 to the regular program state cost per pupil calculated by the 34 department of management for the budget year that begins during 35 -1- LSB 1909XS (2) 87 mm/sc/jh 1/ 3

S.F. 2115 the taxpayer’s tax year. 1 4. A taxpayer who elects to claim the credit provided in 2 this section shall not claim the tuition credit provided in 3 section 422.12, subsection 2, paragraph “b” , for the same 4 dependent. 5 5. Any credit in excess of the tax liability for the 6 tax year shall be refunded. In lieu of claiming a refund, 7 a taxpayer may elect to have the overpayment shown on the 8 taxpayer’s final, completed return credited to the tax 9 liability for the following taxable year. 10 Sec. 2. EFFECTIVE DATE. This Act takes effect January 1, 11 2018. 12 Sec. 3. APPLICABILITY. This Act applies to tax years 13 beginning on or after January 1, 2018. 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 creates a private education tax credit available 18 against the individual income tax equal to the sum of two 19 different amounts that a taxpayer has paid to others for each 20 dependent. First, the amount paid for tuition and textbooks 21 for the dependent to attend a nonpublic elementary school in 22 Iowa that meets certain requirements specified in the bill. 23 Second, the amount paid for qualified educational expenses 24 of the dependent receiving competent private instruction, 25 independent private instruction, or private instruction in 26 this state under Code chapter 299A. “Dependent”, “tuition”, 27 “textbooks”, and “qualified educational expenses” are all 28 defined in the bill. 29 The maximum amount of private education tax credit that may 30 be claimed per dependent in any given tax year shall not exceed 31 the regular program state cost per pupil calculated by the 32 department of management for the budget year that begins during 33 that tax year. 34 The tax credit is refundable or may, at the election of the 35 -2- LSB 1909XS (2) 87 mm/sc/jh 2/ 3

S.F. 2115 taxpayer, be carried forward for up to one tax year. 1 A taxpayer that elects to claim the private education tax 2 credit provided in the bill is ineligible to claim the existing 3 tuition and textbook tax credit in Code section 422.12 for the 4 same dependent. 5 The bill takes effect January 1, 2018, and applies to tax 6 years beginning on or after that date. 7 -3- LSB 1909XS (2) 87 mm/sc/jh 3/ 3