SF 2115 (LSB 1909XS (2) 87)

SENATE FILE 2115

BY  CHELGREN

A BILL FOR

An Act creating a private education tax credit available against the individual income tax and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  422.10C  Private education tax credit.
   1.  For purposes of this section, “dependent” means the same as defined in section 422.12.
   2.  The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by a private education tax credit equal to the sum of the following amounts for each dependent of the taxpayer:
   a.  The amounts that the taxpayer has paid to others for tuition and textbooks of the dependent in grades kindergarten through twelve attending a nonpublic elementary or secondary school situated in Iowa, which school is accredited or approved under section 256.11, which is not operated for profit, and which adheres to the provisions of the federal Civil Rights Act of 1964 and chapter 216. For purposes of this paragraph “a” only, “textbooks” and “tuition” mean the same as defined in section 422.12.
   b.  The amounts that the taxpayer has paid to others for qualified educational expenses of the dependent receiving competent private instruction, independent private instruction, or private instruction in this state under chapter 299A. For purposes of this paragraph only, “qualified educational expenses” means expenses incurred by a taxpayer that are directly related to providing competent private instruction, independent private instruction, or private instruction for a dependent of that taxpayer in this state under chapter 299A. “Qualified educational expenses” includes but is not limited to textbooks, payment to a licensed or accredited tutor or practitioner, curriculum materials, tuition or fees for live or online education programs, education materials and services for a child with disabilities, standardized test fees, transportation expenses, and computer and internet access fees.
   3.  The credit shall not exceed an amount per dependent equal to the regular program state cost per pupil calculated by the department of management for the budget year that begins during the taxpayer’s tax year.
   4.  A taxpayer who elects to claim the credit provided in this section shall not claim the tuition credit provided in section 422.12, subsection 2, paragraph “b”, for the same dependent.
   5.  Any credit in excess of the tax liability for the tax year shall be refunded. In lieu of claiming a refund, a taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed return credited to the tax liability for the following taxable year.
    Sec. 2.  EFFECTIVE DATE.  This Act takes effect January 1, 2018.
    Sec. 3.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2018.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill creates a private education tax credit available against the individual income tax equal to the sum of two different amounts that a taxpayer has paid to others for each dependent. First, the amount paid for tuition and textbooks for the dependent to attend a nonpublic elementary school in Iowa that meets certain requirements specified in the bill. Second, the amount paid for qualified educational expenses of the dependent receiving competent private instruction, independent private instruction, or private instruction in this state under Code chapter 299A. “Dependent”, “tuition”, “textbooks”, and “qualified educational expenses” are all defined in the bill.
   The maximum amount of private education tax credit that may be claimed per dependent in any given tax year shall not exceed the regular program state cost per pupil calculated by the department of management for the budget year that begins during that tax year.
   The tax credit is refundable or may, at the election of the taxpayer, be carried forward for up to one tax year.
   A taxpayer that elects to claim the private education tax credit provided in the bill is ineligible to claim the existing tuition and textbook tax credit in Code section 422.12 for the same dependent.
   The bill takes effect January 1, 2018, and applies to tax years beginning on or after that date.