House File 370 - Introduced HOUSE FILE 370 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 4) A BILL FOR An Act providing businesses with income, franchise, moneys and 1 credits, and gross premiums tax credits for providing child 2 care benefits to employees of the business, and including 3 applicability date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 1169HV (2) 89 jm/jh

H.F. 370 Section 1. NEW SECTION . 237A.31 Employer child care tax 1 credit. 2 1. The taxes imposed against the income tax imposed under 3 chapter 422, subchapter II or III, the franchise tax imposed 4 under chapter 422, subchapter V, the gross premiums tax under 5 chapter 432, or the moneys and credits tax imposed under 6 section 533.329 shall be reduced by an employer child care tax 7 credit equal to the amount of the federal employer-provided 8 child care tax credit provided in section 45F of the Internal 9 Revenue Code the taxpayer was eligible for in the same tax 10 year. 11 2. Any credit in excess of the tax liability is not 12 refundable but the excess for the tax year may be credited 13 to the tax liability for the following five years or until 14 depleted, whichever is earlier. 15 3. The director of the department of revenue shall adopt 16 rules pursuant to chapter 17A to administer this section. 17 Sec. 2. NEW SECTION . 422.12O Employer child care tax 18 credit. 19 1. The taxes imposed under this subchapter, less the credits 20 allowed under section 422.12, shall be reduced by an employer 21 child care tax credit allowed pursuant to section 237A.31. 22 2. An individual may claim the tax credit allowed a 23 partnership, S corporation, limited liability company, estate, 24 or trust electing to have the income taxed directly to the 25 individual. The amount claimed by the individual shall be 26 based upon the pro rata share of the individual’s earnings of a 27 partnership, S corporation, limited liability company, estate, 28 or trust. 29 Sec. 3. Section 422.33, Code 2021, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 31. The taxes imposed under this subchapter 32 shall be reduced by an employer child care tax credit allowed 33 pursuant to section 237A.31. 34 Sec. 4. Section 422.60, Code 2021, is amended by adding the 35 -1- LSB 1169HV (2) 89 jm/jh 1/ 2

H.F. 370 following new subsection: 1 NEW SUBSECTION . 14. The taxes imposed under this subchapter 2 shall be reduced by an employer child care tax credit allowed 3 pursuant to section 237A.31. 4 Sec. 5. NEW SECTION . 432.12N Employer child care tax 5 credit. 6 The taxes imposed under this chapter shall be reduced by 7 an employer child care tax credit allowed pursuant to section 8 237A.31. 9 Sec. 6. Section 533.329, subsection 2, Code 2021, is amended 10 by adding the following new paragraph: 11 NEW PARAGRAPH . l. The moneys and credits tax imposed under 12 this section shall be reduced by an employer child care tax 13 credit allowed pursuant to section 237A.31. 14 Sec. 7. APPLICABILITY. This Act applies to tax years 15 beginning on or after January 1, 2022. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill provides businesses with income, franchise, moneys 20 and credits, and gross premiums tax credits for providing child 21 care benefits to employees of the business. 22 The amount of the credit equals the amount of the federal 23 employer-provided child care tax credit provided in section 45F 24 of the Internal Revenue Code the taxpayer was eligible for in 25 the same tax year. The federal employer-provided child care 26 tax credit is a credit related in part to the acquisition, 27 construction, rehabilitation, or expansion of property used as 28 part of a child care facility. The amount of the credit shall 29 not exceed $150,000 in any tax year. 30 The credit is nonrefundable but any excess may be carried 31 forward for up to five tax years. 32 The bill applies to tax years beginning on or after January 33 1, 2022. 34 -2- LSB 1169HV (2) 89 jm/jh 2/ 2