Senate
File
490
-
Introduced
SENATE
FILE
490
BY
COMMITTEE
ON
LABOR
AND
BUSINESS
RELATIONS
(SUCCESSOR
TO
SSB
1033)
A
BILL
FOR
An
Act
creating
a
new
resident
tax
credit
available
against
1
the
individual
income
tax,
and
including
applicability
2
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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490
Section
1.
NEW
SECTION
.
422.12O
New
resident
tax
credit.
1
1.
For
purposes
of
this
section,
“new
resident”
means
an
2
individual
who
establishes
residency
in
this
state
on
or
after
3
January
1,
2022,
is
employed
by
an
employer
located
in
this
4
state,
and
who
has
not
been
a
resident
of
this
state
at
any
5
time
during
the
previous
two
tax
years
prior
to
establishing
6
residency
in
this
state.
7
2.
a.
The
taxes
imposed
under
this
subchapter
less
the
8
credits
allowed
under
section
422.12
shall
be
reduced
by
a
new
9
resident
tax
credit
equal
to
a
percent
of
the
taxes
imposed
10
under
this
subchapter
less
the
amounts
of
credits
allowed
under
11
this
subchapter,
as
determined
as
follows:
12
(1)
For
the
first
year,
twenty
percent.
13
(2)
For
the
second
year,
forty
percent.
14
(3)
For
the
third
year,
sixty
percent.
15
(4)
For
the
fourth
year,
eighty
percent.
16
(5)
For
the
fifth
year,
one
hundred
percent.
17
b.
A
new
resident
may
begin
to
claim
the
credit
in
the
first
18
year
of
residency
or
begin
to
claim
the
credit
in
the
following
19
year
after
residency
has
been
established.
20
c.
Except
for
the
first
year
of
residency,
a
new
resident
21
must
be
a
resident
of
this
state
for
the
entire
tax
year
for
22
each
tax
year
that
the
new
resident
claims
the
credit.
If
the
23
new
resident
does
not
maintain
residency
in
this
state
during
24
such
time,
the
new
resident
is
disqualified
from
claiming
the
25
credit
in
that
tax
year
and
all
future
years.
26
d.
An
individual
may
establish
residency
in
this
state
27
for
purposes
of
the
credit
only
one
time
in
the
individual’s
28
lifetime.
29
3.
Married
taxpayers
electing
to
file
separate
returns
or
30
filing
separately
on
a
combined
return
may
avail
themselves
31
of
the
new
resident
tax
credit
by
allocating
the
new
resident
32
tax
credit
to
each
spouse
in
the
proportion
that
each
spouse’s
33
respective
earned
income
bears
to
the
total
combined
earned
34
income.
35
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4.
The
department
shall
adopt
rules
pursuant
to
chapter
17A
1
to
administer
this
section.
2
Sec.
2.
APPLICABILITY.
This
Act
applies
to
tax
years
3
beginning
on
or
after
January
1,
2022.
4
EXPLANATION
5
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
6
the
explanation’s
substance
by
the
members
of
the
general
assembly.
7
This
bill
creates
a
new
resident
tax
credit
available
8
against
the
individual
income
tax.
9
The
bill
defines
“new
resident”
to
mean
an
individual
who
10
establishes
residency
in
this
state
on
or
after
January
1,
11
2022,
is
employed
by
an
employer
in
this
state,
and
who
has
not
12
been
a
resident
of
this
state
at
any
time
during
the
previous
13
two
tax
years
prior
to
establishing
residency.
14
The
credit
authorized
in
the
bill
is
available
to
a
new
15
resident
for
the
five
consecutive
tax
years
following
the
16
establishment
of
residency
in
this
state.
A
new
resident
may
17
begin
to
claim
the
credit
in
the
first
year
of
residency
or
18
begin
to
claim
the
credit
in
the
following
year
after
residency
19
has
been
established.
20
Except
for
the
first
year
of
residency,
the
bill
requires
a
21
new
resident
to
remain
a
resident
of
this
state
for
each
year
22
the
credit
is
claimed.
If
the
new
resident
does
not
maintain
23
residency,
the
new
resident
is
disqualified
from
claiming
24
the
tax
credit
in
that
tax
year
and
future
tax
years.
An
25
individual
may
establish
residency
in
this
state
for
purposes
26
of
the
credit
only
one
time
in
the
individual’s
lifetime.
27
The
amount
of
the
credit
is
equal
to
a
percent
of
the
income
28
tax
imposed,
determined
as
follows:
for
the
first
year,
20
29
percent;
for
the
second
year,
40
percent;
for
the
third
year,
30
60
percent;
for
the
fourth
year,
80
percent;
and
for
the
fifth
31
year,
100
percent.
32
The
bill
requires
the
department
of
revenue
to
adopt
rules
33
to
administer
the
bill.
34
The
bill
applies
to
tax
years
beginning
on
or
after
January
35
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1,
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