House File 338 - Introduced HOUSE FILE 338 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 108) A BILL FOR An Act relating to claiming the adoption tax credit for 1 qualified adoption expenses paid or incurred during a tax 2 year and including retroactive applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1792HV (1) 88 jm/jh

H.F. 338 Section 1. Section 422.12A, subsection 2, Code 2019, is 1 amended to read as follows: 2 2. The taxes imposed under this division , less the credits 3 allowed under section 422.12 , shall be reduced by an adoption 4 tax credit equal to the amount of qualified adoption expenses 5 paid or incurred by the taxpayer during the tax year in 6 connection with the adoption of a child by the taxpayer, not to 7 exceed five thousand dollars per adoption. 8 Sec. 2. Section 422.12A, Code 2019, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 3A. The credit under this section with 11 respect to any qualified adoption expense shall be allowed 12 during a tax year as follows: 13 a. For any qualified adoption expense paid or incurred prior 14 to or during the tax year in which the adoption becomes final, 15 the tax year in which the adoption becomes final. 16 b. For any qualified adoption expense paid or incurred after 17 the tax year in which the adoption becomes final, the tax year 18 in which an adoption expense is paid or incurred. 19 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 20 retroactively to January 1, 2019, for tax years beginning on 21 or after that date. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill relates to claiming the adoption tax credit for 26 qualified adoption expenses paid or incurred by an individual 27 taxpayer during a tax year. 28 Currently, in order to claim the adoption tax credit the 29 taxpayer must pay or incur “qualified adoption expenses” during 30 the tax year, which are unreimbursed, and connected with the 31 adoption. The bill strikes the requirement that the “qualified 32 adoption expenses” be paid or incurred by the taxpayer during 33 the tax year. 34 The bill specifies that if a qualified adoption expense is 35 -1- LSB 1792HV (1) 88 jm/jh 1/ 2

H.F. 338 incurred prior to or during the tax year in which the adoption 1 becomes final, the qualified adoption expense shall be allowed 2 during the tax year in which the adoption becomes final. 3 For qualified adoption expenses incurred after the tax year 4 in which the adoption becomes final, the qualified adoption 5 expense shall be allowed during the tax year such adoption 6 expense was paid or incurred. 7 The bill applies retroactively to tax years beginning on or 8 after January 1, 2019. 9 -2- LSB 1792HV (1) 88 jm/jh 2/ 2