Senate
File
433
-
Introduced
SENATE
FILE
433
BY
WHITING
A
BILL
FOR
An
Act
relating
to
the
Iowa
educational
savings
plan
trust
1
by
excluding
from
the
computation
of
net
income
for
the
2
individual
income
tax
withdrawals
for
the
payment
of
3
qualified
education
expenses
for
private
instruction,
and
4
including
retroactive
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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433
Section
1.
Section
12D.1,
subsection
2,
Code
2021,
is
1
amended
by
adding
the
following
new
paragraph:
2
NEW
PARAGRAPH
.
0j.
“Private
instruction”
means
independent
3
private
instruction
as
defined
in
section
299A.1,
subsection
4
2,
paragraph
“b”
,
competent
private
instruction
under
section
5
299A.2,
or
private
instruction
by
a
nonlicensed
person
under
6
section
299A.3.
7
Sec.
2.
Section
12D.1,
subsection
2,
paragraph
k,
Code
2021,
8
is
amended
to
read
as
follows:
9
k.
“Qualified
education
expenses”
means
the
same
as
10
“qualified
higher
education
expenses”
as
defined
in
section
11
529(e)(3)
of
the
Internal
Revenue
Code,
as
amended
by
Pub.
L.
12
No.
115-97,
and
shall
include
elementary
and
secondary
school
13
expenses
for
tuition
described
in
section
529(c)(7)
of
the
14
Internal
Revenue
Code,
subject
to
the
limitations
imposed
by
15
section
529(e)(3)(A)
of
the
Internal
Revenue
Code.
“Qualified
16
education
expenses”
includes
expenses
for
the
participation
17
in
an
apprenticeship
program
registered
and
certified
with
18
the
United
States
secretary
of
labor
under
section
1
of
the
19
National
Apprenticeship
Act,
29
U.S.C.
§50,
and
amounts
paid
as
20
principal
or
interest
on
any
qualified
education
loan
on
behalf
21
of
a
beneficiary
or
a
sibling
of
the
beneficiary,
subject
to
22
the
limitations
imposed
by
section
529(c)(9)(B)
and
(C)
of
23
the
Internal
Revenue
Code.
“Qualified
education
expenses”
24
includes
the
payment
to
others
of
expenses
described
in
25
section
529(e)(3)(A)
of
the
Internal
Revenue
Code
for
private
26
instruction.
27
Sec.
3.
Section
422.7,
subsection
32,
paragraph
c,
28
subparagraph
(1),
Code
2021,
is
amended
by
adding
the
following
29
new
subparagraph
division:
30
NEW
SUBPARAGRAPH
DIVISION
.
(g)
The
payment
of
qualified
31
education
expenses
described
in
section
529(e)(3)(A)
of
the
32
Internal
Revenue
Code
to
others
for
private
instruction
at
an
33
elementary
or
secondary
school
defined
in
subparagraph
(2),
34
subparagraph
division
(b),
subparagraph
subdivision
(ii),
35
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433
subparagraph
part
(B).
1
Sec.
4.
Section
422.7,
subsection
32,
paragraph
c,
2
subparagraph
(2),
subparagraph
division
(b),
subparagraph
3
subdivision
(ii),
Code
2021,
is
amended
to
read
as
follows:
4
(ii)
(A)
“Elementary
or
secondary
school”
includes
an
5
elementary
or
secondary
school
located
out
of
state
that
6
educates
a
beneficiary
who
meets
the
definition
of
“children
7
requiring
special
education”
in
section
256B.2
,
if
the
8
elementary
or
secondary
school
is
accredited
under
the
laws
of
9
the
state
in
which
it
is
located
and
adheres
to
the
federal
10
Civil
Rights
Act
of
1964
and
applicable
state
law
analogous
to
11
chapter
216
.
12
(B)
For
purposes
of
this
paragraph
“c”
,
subparagraph
(1),
13
subparagraph
division
(g),
“elementary
or
secondary
school”
14
means
a
nonaccredited
nonpublic
school,
a
cooperative
study
15
program,
a
tutorial
service,
classes
taken
at
an
educational
16
institution
or
through
a
private
service
provider,
and
a
course
17
taken
online,
all
as
part
of
a
program
or
course
of
study
for
an
18
elementary
or
secondary
school
student.
19
Sec.
5.
Section
422.7,
subsection
32,
paragraph
c,
20
subparagraph
(2),
Code
2021,
is
amended
by
adding
the
following
21
new
subparagraph
division:
22
NEW
SUBPARAGRAPH
DIVISION
.
(0c)
“Private
instruction”
means
23
the
same
as
defined
in
section
12D.1,
subsection
2.
24
Sec.
6.
RETROACTIVE
APPLICABILITY.
This
Act
applies
25
retroactively
to
January
1,
2021,
for
tax
years
beginning
on
26
or
after
that
date.
27
EXPLANATION
28
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
29
the
explanation’s
substance
by
the
members
of
the
general
assembly.
30
This
bill
relates
to
the
Iowa
educational
savings
plan
trust
31
(529
plan)
by
excluding
from
the
computation
of
net
income
32
for
the
individual
income
tax
withdrawals
for
the
payment
of
33
qualified
education
expenses
for
private
instruction.
34
The
bill
defines
“private
instruction”
to
mean
independent
35
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433
private
instruction
as
defined
in
Code
section
299A.1(2)(b),
1
competent
private
instruction
under
Code
section
299A.2,
or
2
private
instruction
by
a
nonlicensed
person
under
Code
section
3
299A.3.
4
Under
the
bill,
“qualified
education
expenses”
include
5
expenses
described
in
section
529(e)(3)(A)
of
the
Internal
6
Revenue
Code
for
a
nonaccredited
nonpublic
school,
cooperative
7
study
program,
tutorial
service,
classes
taken
at
an
8
educational
institution
or
through
a
private
service
provider,
9
and
a
course
taken
online,
all
as
part
of
a
program
or
course
of
10
study
for
an
elementary
or
secondary
school
student.
11
The
federal
tax
treatment
of
the
type
of
withdrawal
12
described
in
the
bill
may
differ
from
the
state
tax
treatment
13
under
the
bill.
14
The
bill
applies
retroactively
to
January
1,
2021,
and
15
applies
to
tax
years
beginning
on
or
after
that
date.
16
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