SF 2105 (LSB 5694XS (2) 89)

SENATE FILE 2105

BY  CARLIN

A BILL FOR

An Act excluding from the computation of net income for purposes of the individual income tax the unreimbursed cost of prescribed drugs or insulin of certain taxpayers at least sixty-five years of age, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.7, Code 2022, is amended by adding the following new subsection:
   NEW SUBSECTION.  29A.  Subtract the unreimbursed cost of prescribed drugs or insulin of a taxpayer who is at least sixty-five years old on December 31. If a deduction is taken under this subsection, the unreimbursed cost of the drugs or insulin shall not be considered medical care expenses under section 213 of the Internal Revenue Code for state tax purposes.
    Sec. 2.  APPLICABILITY.  This Act applies January 1, 2023, to prescribed drugs or insulin purchased after that date.
    Sec. 3.  APPLICABILITY.  This Act applies to tax years beginning on or after January 1, 2023.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill excludes from the computation of net income for purposes of the individual income tax the unreimbursed cost of prescribed drugs or insulin of a taxpayer who is at least 65 years of age.
   Under current law, any taxpayer may deduct from net income unreimbursed costs of prescribed drugs or insulin as an itemized deduction for state tax purposes, to the extent the taxpayer’s total medical and dental expenses exceed 10 percent of federal adjusted gross income.
   Under the bill, a taxpayer who is at least 65 years of age on December 31 of any tax year beginning on or after January 1, 2023, may exclude from the computation of net income the cost of unreimbursed prescription drugs or insulin, if the taxpayer excludes any cost of unreimbursed prescription drugs or insulin from the medical care expense deduction under section 213 of the Internal Revenue Code for state tax purposes.
   The bill applies to tax years beginning on or after January 1, 2023, for prescribed drugs or insulin purchased on or after that date.