Senate
Study
Bill
1033
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
LABOR
AND
BUSINESS
RELATIONS
BILL
BY
CHAIRPERSON
WHITING)
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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Section
1.
NEW
SECTION
.
422.12O
New
resident
tax
credit.
1
1.
For
purposes
of
this
section,
“new
resident”
means
an
2
individual
who
is
a
resident
of
Iowa
working
in
this
state,
and
3
who
has
not
been
a
resident
of
this
state
at
any
time
during
the
4
previous
two
tax
years
prior
to
establishing
residency
in
this
5
state.
6
2.
a.
The
taxes
imposed
under
this
subchapter
less
the
7
credits
allowed
under
section
422.12
shall
be
reduced
by
a
new
8
resident
tax
credit
equal
to
a
percent
of
the
taxes
imposed
9
under
this
subchapter
less
the
amounts
of
credits
allowed
under
10
this
subchapter,
as
determined
as
follows:
11
(1)
For
the
first
year,
twenty
percent.
12
(2)
For
the
second
year,
forty
percent.
13
(3)
For
the
third
year,
sixty
percent.
14
(4)
For
the
fourth
year,
eighty
percent.
15
(5)
For
the
fifth
year,
one
hundred
percent.
16
b.
A
new
resident
may
claim
the
credit
during
either
the
17
first
or
second
tax
year
of
residency,
and
shall
take
the
18
credit
consecutively
every
tax
year
thereafter
as
provided
in
19
paragraph
“a”
.
20
3.
Any
credit
in
excess
of
the
tax
liability
is
not
21
refundable
but
the
excess
for
the
tax
year
may
be
credited
22
to
the
tax
liability
for
the
following
five
years
or
until
23
depleted,
whichever
is
earlier.
24
4.
Married
taxpayers
electing
to
file
separate
returns
or
25
filing
separately
on
a
combined
return
may
avail
themselves
26
of
the
new
resident
tax
credit
by
allocating
the
new
resident
27
tax
credit
to
each
spouse
in
the
proportion
that
each
spouse’s
28
respective
earned
income
bears
to
the
total
combined
earned
29
income.
30
Sec.
2.
APPLICABILITY.
This
Act
applies
to
tax
years
31
beginning
on
or
after
January
1,
2022.
32
EXPLANATION
33
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
34
the
explanation’s
substance
by
the
members
of
the
general
assembly.
35
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This
bill
creates
a
new
resident
tax
credit
available
1
against
the
individual
income
tax.
2
The
bill
defines
“new
resident”
to
mean
an
individual
who
is
3
a
resident
of
Iowa
working
in
this
state,
and
who
has
not
been
a
4
resident
of
this
state
at
any
time
during
the
previous
two
tax
5
years
prior
to
establishing
residency.
6
The
credit
authorized
in
the
bill
is
available
to
a
new
7
resident
for
the
five
consecutive
tax
years
following
the
8
establishment
of
residency
in
this
state.
A
new
resident
may
9
begin
to
claim
the
credit
during
either
the
first
or
second
tax
10
year
of
residency.
11
The
amount
of
the
credit
is
equal
to
a
percent
of
the
income
12
tax
imposed,
determined
as
follows:
for
the
first
year,
20
13
percent;
for
the
second
year,
40
percent;
for
the
third
year,
14
60
percent;
for
the
fourth
year,
80
percent;
and
for
the
fifth
15
year,
100
percent.
16
Any
credit
provided
in
the
bill
in
excess
of
tax
liability
is
17
not
refundable
but
the
excess
for
the
tax
year
may
be
credited
18
to
the
tax
liability
for
the
following
five
years
or
until
19
depleted,
whichever
is
earlier.
20
The
bill
applies
to
tax
years
beginning
on
or
after
January
21
1,
2022.
22
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