HF 417 (LSB 2692YH (2) 91)

HOUSE FILE 417

BY  GUSTOFF

A BILL FOR

An Act modifying the tuition and textbook tax credit available against the individual income tax, and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.12, subsection 2, paragraph b, Code 2025, is amended to read as follows:
   b.  A tuition credit equal to twenty-five fifty percent of the first two thousand dollars which the taxpayer has paid to others for each dependent in grades kindergarten through twelve, for tuition and textbooks of each dependent who is receiving private instruction or who is attending an elementary or secondary school situated in Iowa, which school is accredited or approved under section 256.11, which is not operated for profit, and which adheres to the provisions of the federal Civil Rights Act of 1964 and chapter 216. Notwithstanding any other provision, all other credits allowed under this subsection shall be deducted before the tuition credit under this paragraph. The department, when conducting an audit of a taxpayer’s return, shall also audit the tuition tax credit portion of the tax return.
    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2025, for tax years beginning on or after that date.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Current law establishes a tuition credit equal to 25 percent of the first $2,000 which the taxpayer has paid to others for each dependent in grades kindergarten through 12, for tuition and textbooks of each dependent who is receiving private instruction or who is attending an elementary or secondary school situated in Iowa, which school is accredited or approved under Code section 256.11, which is not operated for profit, and which adheres to the provisions of the federal Civil Rights Act of 1964 and Code chapter 216 (Iowa civil rights Act of 1965). This bill increases the amount of this tax credit to 50 percent of the first $2,000. The bill applies retroactively to January 1, 2025, for tax years beginning on or after that date.