H.F. 2323 DIVISION I 1 MATERNITY GROUP HOME TAX CREDIT 2 Section 1. NEW SECTION . 135E.1 Maternity group home tax 3 credit. 4 1. As used in this section unless the context otherwise 5 requires: 6 a. “Department” means the department of revenue. 7 b. “Donation” means a voluntary cash or noncash contribution 8 to a maternity group home made by the taxpayer during the tax 9 year. 10 c. “Maternity group home” means the same as defined in 11 section 414.27. 12 2. For tax years beginning on or after January 1, 2026, 13 a tax credit shall be allowed against the taxes imposed in 14 chapter 422, subchapters II, III, and V, and in chapter 432, 15 and against the moneys and credits tax imposed in section 16 533.329, equal to one hundred percent of a person’s donation 17 to a maternity group home. An individual may claim a tax 18 credit under this section of a partnership, limited liability 19 company, S corporation, estate, or trust electing to have 20 income taxed directly to the individual. The amount claimed 21 by the individual shall be based upon the pro rata share of the 22 individual’s earnings from the partnership, limited liability 23 company, S corporation, estate, or trust. 24 3. The amount of the donation for which the tax credit is 25 claimed shall not be deductible in determining taxable income 26 for state income tax purposes. 27 4. Any credit in excess of the tax liability is not 28 refundable but the excess for the tax year may be credited 29 to the tax liability for the following five years or until 30 depleted, whichever is earlier. 31 5. a. The cumulative value of the amount of tax credits 32 authorized pursuant to this section shall not annually exceed 33 three million five hundred thousand dollars. 34 b. The maximum value of tax credits granted for donations 35 -1- LSB 5051YH (9) 91 jm/jh 1/ 10

H.F. 2323 per an organization operating a maternity group home shall not 1 annually exceed five hundred thousand dollars. 2 6. a. A taxpayer must submit an application to the 3 department in a manner approved by the department for each 4 separate and distinct donation. The application must be 5 approved by the department in order to claim the tax credit. 6 The application must be filed within six months following the 7 tax year the donation was made. 8 b. The department shall accept and approve applications on 9 a first-come, first-served basis until the maximum value amount 10 of tax credits that may be claimed pursuant to subsection 5 is 11 reached. If for a tax year the aggregate amount of tax credits 12 applied for exceeds the maximum amount specified in subsection 13 5, paragraph “a” or “b” , the department shall establish a 14 wait list when applicable. Valid applications filed by the 15 taxpayer within six months following the tax year of the 16 donation but not approved by the department shall be placed 17 on a wait list in the order the applications were received 18 and those applicants shall be given priority for having their 19 applications approved in succeeding years. Placement on a wait 20 list pursuant to this paragraph shall not constitute a promise 21 binding the state. The availability of a tax credit and 22 approval of a tax credit application pursuant to this section 23 in a future year is contingent upon the availability of tax 24 credits in that particular year. 25 7. The department shall adopt rules pursuant to chapter 17A 26 to administer this section. 27 Sec. 2. NEW SECTION . 422.10D Maternity group home tax 28 credit. 29 The tax imposed under this subchapter, less the credits 30 allowed under section 422.12, shall be reduced by a maternity 31 group home tax credit authorized pursuant to section 135E.1. 32 Sec. 3. Section 422.33, Code 2026, is amended by adding the 33 following new subsection: 34 NEW SUBSECTION . 11. The tax imposed under this subchapter 35 -2- LSB 5051YH (9) 91 jm/jh 2/ 10

H.F. 2323 shall be reduced by a maternity group home tax credit 1 authorized pursuant to section 135E.1. 2 Sec. 4. Section 422.60, Code 2026, is amended by adding the 3 following new subsection: 4 NEW SUBSECTION . 16. The tax imposed under this subchapter 5 shall be reduced by a maternity group home tax credit 6 authorized pursuant to section 135E.1. 7 Sec. 5. NEW SECTION . 432.12P Maternity group home tax 8 credit. 9 The tax imposed under this chapter shall be reduced by a 10 maternity group home tax credit authorized pursuant to section 11 135E.1. 12 Sec. 6. Section 533.329, subsection 2, Code 2026, is amended 13 by adding the following new paragraph: 14 NEW PARAGRAPH . m. The moneys and credits tax imposed under 15 this section shall be reduced by a maternity group home tax 16 credit allowed under section 135E.1. 17 Sec. 7. APPLICABILITY. This division of this Act applies to 18 tax years beginning on or after January 1, 2027. 19 DIVISION II 20 STRONG FAMILIES TAX CREDIT 21 Sec. 8. NEW SECTION . 217.41D Strong families tax credit. 22 1. As used in this section: 23 a. “Department” means the department of revenue. 24 b. “Organization” means an organization that is exempt 25 from federal taxation under section 501(c)(3) of the Internal 26 Revenue Code that provides comprehensive case management 27 services for at-risk families or fatherhood parenting services 28 in this state. 29 2. The taxes imposed in chapter 422, subchapters II, III, 30 and V, and in chapter 432, and against the moneys and credits 31 tax imposed in section 533.329, shall be reduced by a strong 32 families tax credit equal to one hundred percent of the amount 33 of the voluntary cash contribution made by the taxpayer during 34 the tax year to an organization. 35 -3- LSB 5051YH (9) 91 jm/jh 3/ 10

H.F. 2323 3. To be eligible to claim this credit, all of the following 1 shall apply: 2 a. A deduction pursuant to section 170 of the Internal 3 Revenue Code for any amount of the contribution is not taken 4 for state tax purposes. 5 b. The contribution does not designate that any part of the 6 contribution be used for the direct benefit of the taxpayer, 7 any dependent of the taxpayer, or any other person designated 8 by the taxpayer. 9 c. The organization does not receive more than fifty percent 10 of annual revenues from governmental entities. 11 d. The organization allocates at least ninety-five percent 12 of annual revenues to provide comprehensive case management to 13 at-risk families or fatherhood parenting services. 14 e. The organization has provided comprehensive case 15 management services for at-risk families or fatherhood 16 parenting services in this state for at least three consecutive 17 years. 18 f. The organization does not provide counseling for abortion 19 services. 20 4. Any credit in excess of the tax liability is not 21 refundable but the excess for the tax year may be credited to 22 the tax liability for the following five tax years or until 23 depleted, whichever is the earlier. 24 5. Married taxpayers who file separate returns must 25 determine the tax credit under subsection 2 based upon their 26 combined net income and allocate the total credit amount to 27 each spouse in the proportion that each spouse’s respective net 28 income bears to the total combined net income. Nonresidents or 29 part-year residents of Iowa must determine their tax credit in 30 the ratio of their Iowa source net income to their all-source 31 net income. Nonresidents or part-year residents who are 32 married and elect to file separate returns must allocate the 33 tax credit between the spouses in the ratio of each spouse’s 34 Iowa source net income to the combined Iowa source net income 35 -4- LSB 5051YH (9) 91 jm/jh 4/ 10

H.F. 2323 of the taxpayers. 1 6. An individual may claim the tax credit allowed a 2 partnership, limited liability company, S corporation, estate, 3 or trust electing to have the income taxed directly to the 4 individual. The amount claimed by the individual shall be 5 based upon the pro rata share of the individual’s earnings of 6 the partnership, limited liability company, S corporation, 7 estate, or trust. 8 7. a. In order for the taxpayer to claim the strong 9 families tax credit, a taxpayer must submit an application 10 to the department detailing the contribution made to the 11 organization. The application must be approved by the 12 department in order to claim the tax credit. The application 13 must be filed with the department by December 31 of the tax 14 year for which the credit is claimed. 15 b. The department shall accept and approve applications on 16 a first-come, first-served basis until the maximum amount of 17 tax credits that may be claimed pursuant to subsection 8 is 18 reached. If for a tax year the maximum value of tax credits 19 applied for exceeds the amount specified in subsection 8, the 20 department shall establish a wait list for the tax credit. 21 8. The cumulative value of tax credits approved by the 22 department annually pursuant to this section shall not exceed 23 five million dollars. The department shall not approve 24 applications made to any organization that exceed one million 25 dollars in the aggregate in a calendar year. In the event 26 less than five million dollars in credits in the aggregate 27 are approved in a calendar year, the department may approve 28 applications for the tax credit that exceed one million 29 dollars in the aggregate to any organization from the remaining 30 unclaimed credits for the calendar year on a first-come, 31 first-served basis. 32 9. An organization shall initially register with the 33 department. The organization’s registration shall include 34 proof of section 501(c)(3) status, a list of the services the 35 -5- LSB 5051YH (9) 91 jm/jh 5/ 10

H.F. 2323 organization provides, and the members of the governing board 1 of the organization. Once the organization has registered, the 2 organization is not required to subsequently register unless 3 the services provided change or members of the organization’s 4 governing board change. 5 10. An organization that is registered pursuant to this 6 section shall report to the department, on a form prescribed by 7 the department, by January 10 of each calendar year, the total 8 number of families receiving services in the previous calendar 9 year. 10 11. By January 31, 2028, and each January 31 thereafter, 11 the department shall report to the general assembly the name of 12 each organization that has registered under this section, the 13 number of families receiving services from each organization, 14 and the amount of tax credits approved from contributions made 15 to each organization. 16 12. The department shall adopt rules pursuant to chapter 17A 17 to administer this section. 18 Sec. 9. NEW SECTION . 422.12R Strong families tax credit. 19 The taxes imposed under this subchapter, less the credits 20 allowed under section 422.12, shall be reduced by a strong 21 families tax credit allowed pursuant to section 217.41D. 22 Sec. 10. Section 422.33, Code 2026, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 33. The taxes imposed under this subchapter 25 shall be reduced by a strong families tax credit allowed 26 pursuant to section 217.41D. 27 Sec. 11. Section 422.60, Code 2026, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 17. The taxes imposed under this subchapter 30 shall be reduced by a strong families tax credit allowed 31 pursuant to section 217.41D. 32 Sec. 12. NEW SECTION . 432.12Q Strong families tax credit. 33 The taxes imposed under this chapter shall be reduced by a 34 strong families tax credit allowed pursuant to section 217.41D. 35 -6- LSB 5051YH (9) 91 jm/jh 6/ 10

H.F. 2323 Sec. 13. Section 533.329, subsection 2, Code 2026, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . n. The moneys and credits tax imposed under 3 this section shall be reduced by a strong families tax credit 4 as provided in section 217.41D. 5 Sec. 14. APPLICABILITY. This division of this Act applies 6 to tax years beginning on or after January 1, 2027. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill creates maternity group home and strong families 11 tax credits available against the individual, corporate, 12 franchise, insurance premium, and moneys and credits taxes. 13 MATERNITY HOME TAX CREDIT. The bill defines “maternity 14 group home” to mean a community-based residential home that 15 provides room and board, personal care, supervision, training, 16 support, and education in a family environment for women 17 who are either pregnant or who have given birth within the 18 preceding 24 months and live with their children, and includes 19 overnight room accommodations and administrative and office 20 space for those persons who provide such services. 21 The amount of the credit shall equal 100 percent of a 22 person’s donation to a maternity group home. 23 The bill specifies that the amount of the donation for which 24 the tax credit is claimed shall not be deductible for state 25 income tax purposes. 26 Any credit in excess of the tax liability is not refundable 27 but the excess for the tax year may be credited to the tax 28 liability for the following five years or until depleted, 29 whichever is earlier. 30 The aggregate amount of tax credits authorized pursuant to 31 the bill shall not annually exceed $3.5 million. 32 The maximum amount of tax credits granted for donations to 33 an organization operating a maternity group home shall not 34 annually exceed $500,000. 35 -7- LSB 5051YH (9) 91 jm/jh 7/ 10

H.F. 2323 The bill requires the department of revenue to administer 1 the credit and to approve applications on a first-come, 2 first-served basis until the maximum amount of tax credits 3 authorized for the year has been reached. A taxpayer must 4 submit an application to the department for each separate and 5 distinct donation within six months following the tax year of 6 the donation in such a manner approved by the department. The 7 bill also requires the department to develop a wait list in the 8 order the applications are received if applications for the 9 credit exceed the annual maximum amounts authorized. 10 The department shall adopt rules to administer the tax 11 credit. 12 The tax credit applies to tax years beginning on or after 13 January 1, 2027. 14 STRONG FAMILIES TAX CREDIT. The bill creates a strong 15 families tax credit available against the individual, 16 corporate, franchise, insurance premium, and moneys and credit 17 taxes. 18 The strong families tax credit is equal to 100 percent 19 of the amount of a voluntary cash contribution made by the 20 taxpayer to an organization that is exempt from taxation under 21 section 501(c)(3) of the Internal Revenue Code that provides 22 comprehensive case management services for at-risk families or 23 fatherhood parenting services in this state. 24 To be eligible to claim the credit, all of the following 25 must apply: (1) a deduction is not taken for any amount of 26 the contribution for state tax purposes, (2) the contribution 27 is not designated to personally benefit the taxpayer, (3) 28 the organization does not receive more than 50 percent of 29 revenues from governmental entities, (4) 95 percent of annual 30 revenues are allocated to providing core services, (5) the 31 organization has provided services in this state for at least 32 three consecutive years, and (6) the organization does not 33 provide abortion services. 34 Any credit in excess of the tax liability is not refundable 35 -8- LSB 5051YH (9) 91 jm/jh 8/ 10

H.F. 2323 but the excess for the tax year may be credited to the tax 1 liability for the following five tax years or until depleted, 2 whichever is the earlier. 3 In order for the taxpayer to claim the strong families tax 4 credit, a taxpayer must submit an application to the department 5 of revenue (department) detailing the contribution made to 6 the organization. The application must be approved by the 7 department in order to claim the tax credit. The application 8 must be filed with the department by December 31 of the tax 9 year for which the credit is claimed. 10 The department shall accept and approve applications on a 11 first-come, first-served basis until the maximum amount of tax 12 credits that may be claimed pursuant to the bill is reached. 13 If for a tax year the maximum value of tax credits applied 14 for exceeds the maximum amount, the department is required to 15 establish a wait list for the tax credit. 16 The cumulative value of tax credits approved by the 17 department annually pursuant to the bill shall not exceed $5 18 million. The department shall not approve applications made 19 to any organization that exceed $1 million in the aggregate in 20 a calendar year, unless credits from the $5 million maximum 21 remain unclaimed. 22 The bill requires an organization to initially register with 23 the department. The organization’s registration shall include 24 proof of section 501(c)(3) status, a list of the services the 25 organization provides, and the members of the governing board 26 of the organization. Once the organization has registered, it 27 is not required to subsequently register unless the services 28 provided change or members of the organization’s governing 29 board change. 30 Beginning January 31, 2028, and each January 31 thereafter, 31 the department shall report information about the tax credit 32 to the general assembly the name of each organization that 33 has registered with the department, the number of families 34 receiving services from each organization, and the amount 35 -9- LSB 5051YH (9) 91 jm/jh 9/ 10