HF 370 (LSB 1169HV (2) 89)

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 credits, and gross premiums tax credits for providing child care benefits to employees of the business, and including applicability date provisions. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  237A.31  Employer child care tax credit.
   1.  The taxes imposed against the income tax imposed under chapter 422, subchapter II or III, the franchise tax imposed under chapter 422, subchapter V, the gross premiums tax under chapter 432, or the moneys and credits tax imposed under section 533.329 shall be reduced by an employer child care tax credit equal to the amount of the federal employer-provided child care tax credit provided in section 45F of the Internal Revenue Code the taxpayer was eligible for in the same tax year. 
   2.  Any credit in excess of the tax liability is not refundable but the excess for the tax year may be credited to the tax liability for the following five years or until depleted, whichever is earlier. 
   3.  The director of the department of revenue shall adopt rules pursuant to chapter 17A to administer this section.
    Sec. 2.  NEW SECTION.  422.12O  Employer child care tax credit.
   1.  The taxes imposed under this subchapter, less the credits allowed under section 422.12, shall be reduced by an employer child care tax credit allowed pursuant to section 237A.31.
   2.  An individual may claim the tax credit allowed a partnership, S corporation, limited liability company, estate, or trust electing to have the income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earnings of a partnership, S corporation, limited liability company, estate, or trust.
    Sec. 3.  Section 422.33, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  31.  The taxes imposed under this subchapter shall be reduced by an employer child care tax credit allowed pursuant to section 237A.31. 
    Sec. 4.  Section 422.60, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  14.  The taxes imposed under this subchapter shall be reduced by an employer child care tax credit allowed pursuant to section 237A.31. 
    Sec. 5.  NEW SECTION.  432.12N  Employer child care tax credit.
   The taxes imposed under this chapter shall be reduced by an employer child care tax credit allowed pursuant to section 237A.31.
    Sec. 6.  Section 533.329, subsection 2, Code 2021, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  l.  The moneys and credits tax imposed under this section shall be reduced by an employer child care tax credit allowed pursuant to section 237A.31.
    Sec. 7.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2022.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides businesses with income, franchise, moneys and credits, and gross premiums tax credits for providing child care benefits to employees of the business.
   The amount of the credit equals the amount of the federal employer-provided child care tax credit provided in section 45F of the Internal Revenue Code the taxpayer was eligible for in the same tax year. The federal employer-provided child care tax credit is a credit related in part to the acquisition, construction, rehabilitation, or expansion of property used as part of a child care facility. The amount of the credit shall not exceed $150,000 in any tax year. 
   The credit is nonrefundable but any excess may be carried forward for up to five tax years.
   The bill applies to tax years beginning on or after January 1, 2022.