Senate
File
2440
-
Introduced
SENATE
FILE
2440
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SF
2259)
(SUCCESSOR
TO
SSB
3128)
A
BILL
FOR
An
Act
relating
to
the
Iowa
educational
savings
plan
trust
1
by
expanding
the
plan
trust
to
include
career-related
2
programs
approved
by
the
Iowa
office
of
apprenticeship
for
3
purposes
of
withdrawals
qualifying
for
an
individual
income
4
tax
deduction,
and
including
retroactive
applicability
5
provisions.
6
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
7
TLSB
5329SZ
(3)
90
jm/jh
S.F.
2440
Section
1.
Section
84D.2,
Code
2024,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
6A.
“Career-related
programs”
means
the
3
same
as
defined
in
section
422.7,
subsection
22.
4
Sec.
2.
Section
84D.4,
Code
2024,
is
amended
by
adding
the
5
following
new
subsection:
6
NEW
SUBSECTION
.
10.
The
office
shall
approve
7
career-related
programs
for
purposes
of
the
Iowa
educational
8
savings
plan
trust
tax
deduction.
9
Sec.
3.
Section
422.7,
subsection
22,
paragraph
c,
10
subparagraph
(1),
Code
2024,
is
amended
by
adding
the
following
11
new
subparagraph
division:
12
NEW
SUBPARAGRAPH
DIVISION
.
(g)
The
payment
of
expenses
for
13
a
career-related
program
if
such
a
program
is
approved
by
the
14
Iowa
office
of
apprenticeship
as
a
career-related
program.
15
Sec.
4.
Section
422.7,
subsection
22,
paragraph
c,
16
subparagraph
(2),
Code
2024,
is
amended
by
adding
the
following
17
new
subparagraph
division:
18
NEW
SUBPARAGRAPH
DIVISION
.
(0b)
“Career-related
program”
19
means
a
class
or
a
series
of
classes
that
do
not
qualify
for
20
college
credit
but
match
the
needs
and
career
goals
of
the
21
beneficiary
to
develop
the
knowledge
and
skills
necessary
22
to
pursue
a
new
future
career
opportunity
in
the
workplace.
23
“Career-related
program”
does
not
include
a
class
or
a
series
24
of
classes
for
improving
or
developing
new
knowledge
for
the
25
current
career
of
the
beneficiary.
26
Sec.
5.
RETROACTIVE
APPLICABILITY.
This
Act
applies
27
retroactively
to
January
1,
2024,
for
tax
years
beginning
on
28
or
after
that
date.
29
EXPLANATION
30
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
31
the
explanation’s
substance
by
the
members
of
the
general
assembly.
32
This
bill
relates
to
the
Iowa
educational
savings
plan
33
trust
(529
plan)
by
expanding
the
plan
trust
to
include
34
career-related
programs
approved
by
the
Iowa
office
of
35
-1-
LSB
5329SZ
(3)
90
jm/jh
1/
2
S.F.
2440
apprenticeship
(office)
for
purposes
of
withdrawals
qualifying
1
for
a
state
individual
income
tax
deduction.
2
The
bill
defines
“career-related
programs”
to
mean
a
class
3
or
a
series
of
classes
that
do
not
qualify
for
college
credit
4
but
match
the
needs
and
career
goals
of
the
beneficiary
to
5
develop
the
knowledge
and
skills
necessary
to
pursue
a
new
6
future
career
opportunity
in
the
workplace,
but
does
not
7
include
programs
to
develop
knowledge
for
a
current
career.
8
Prior
to
withdrawals
from
the
529
plan
qualifying
for
a
state
9
individual
income
tax
deduction
under
the
bill,
the
office
must
10
first
approve
the
career-related
program
to
receive
the
state
11
income
tax
deduction.
12
Under
current
law,
withdrawals
from
a
529
plan
for
expenses
13
related
to
an
apprenticeship
program
registered
and
certified
14
with
the
United
States
secretary
of
labor
under
the
federal
15
National
Apprenticeship
Act
are
excluded
from
the
computation
16
of
net
income
for
state
and
federal
individual
income
tax.
17
However,
a
career-related
program
defined
in
the
bill
does
not
18
qualify
as
an
“apprenticeship
program”
under
federal
law,
and
19
as
a
result,
federal
tax
treatment
may
differ
from
state
tax
20
treatment.
21
For
federal
tax
purposes,
if
a
withdrawal
is
considered
22
a
nonqualified
withdrawal,
the
earnings
portion
of
the
23
nonqualified
withdrawal
is
subject
to
federal
taxation
and
a
24
10
percent
withdrawal
penalty.
25
The
bill
applies
retroactively
to
January
1,
2024,
and
26
applies
to
tax
years
beginning
on
or
after
that
date.
27
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5329SZ
(3)
90
jm/jh
2/
2