House File 284 - Introduced HOUSE FILE 284 BY GUSTOFF 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 TLSB 1938YH (1) 90 jm/jh

H.F. 284 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 2023, 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 22, 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. 33 Sec. 4. Section 422.7, subsection 22, paragraph c, 34 subparagraph (2), Code 2021, is amended by adding the following 35 -1- LSB 1938YH (1) 90 jm/jh 1/ 2

H.F. 284 new subparagraph division: 1 NEW SUBPARAGRAPH DIVISION . (0c) “Private instruction” means 2 the same as defined in section 12D.1, subsection 2. 3 Sec. 5. RETROACTIVE APPLICABILITY. This Act applies 4 retroactively to January 1, 2023, for tax years beginning on 5 or after that date. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to the Iowa educational savings plan trust 10 (529 plan) by excluding from the computation of net income 11 for the individual income tax withdrawals for the payment of 12 qualified education expenses for private instruction. 13 The bill defines “private instruction” to mean independent 14 private instruction as defined in Code section 299A.1(2)(b), 15 competent private instruction under Code section 299A.2, or 16 private instruction by a nonlicensed person under Code section 17 299A.3. 18 Under the bill, “qualified education expenses” include 19 expenses described in section 529(e)(3)(A) of the Internal 20 Revenue Code including tuition, fees, books, and equipment. 21 The federal tax treatment of the type of withdrawal 22 described in the bill may differ from the state tax treatment 23 under the bill. 24 The bill applies retroactively to January 1, 2023, and 25 applies to tax years beginning on or after that date. 26 -2- LSB 1938YH (1) 90 jm/jh 2/ 2