Senate File 2105 - Introduced SENATE FILE 2105 BY CARLIN A BILL FOR An Act excluding from the computation of net income for 1 purposes of the individual income tax the unreimbursed cost 2 of prescribed drugs or insulin of certain taxpayers at 3 least sixty-five years of age, and including applicability 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5694XS (2) 89 jm/jh

S.F. 2105 Section 1. Section 422.7, Code 2022, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 29A. Subtract the unreimbursed cost of 3 prescribed drugs or insulin of a taxpayer who is at least 4 sixty-five years old on December 31. If a deduction is taken 5 under this subsection, the unreimbursed cost of the drugs 6 or insulin shall not be considered medical care expenses 7 under section 213 of the Internal Revenue Code for state tax 8 purposes. 9 Sec. 2. APPLICABILITY. This Act applies January 1, 2023, to 10 prescribed drugs or insulin purchased after that date. 11 Sec. 3. APPLICABILITY. This Act applies to tax years 12 beginning on or after January 1, 2023. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill excludes from the computation of net income for 17 purposes of the individual income tax the unreimbursed cost of 18 prescribed drugs or insulin of a taxpayer who is at least 65 19 years of age. 20 Under current law, any taxpayer may deduct from net income 21 unreimbursed costs of prescribed drugs or insulin as an 22 itemized deduction for state tax purposes, to the extent the 23 taxpayer’s total medical and dental expenses exceed 10 percent 24 of federal adjusted gross income. 25 Under the bill, a taxpayer who is at least 65 years of age 26 on December 31 of any tax year beginning on or after January 1, 27 2023, may exclude from the computation of net income the cost 28 of unreimbursed prescription drugs or insulin, if the taxpayer 29 excludes any cost of unreimbursed prescription drugs or insulin 30 from the medical care expense deduction under section 213 of 31 the Internal Revenue Code for state tax purposes. 32 The bill applies to tax years beginning on or after January 33 1, 2023, for prescribed drugs or insulin purchased on or after 34 that date. 35 -1- LSB 5694XS (2) 89 jm/jh 1/ 1