HF 568 (LSB 2728YH (2) 91)

HOUSE FILE 568

BY  JACOBY

A BILL FOR

An Act excluding interest income earned from banks and credit unions from the calculations of Iowa net income for purposes of the individual income tax, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.7, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  45.  a.  Subtract, to the extent included, interest income received from a bank or credit union.
   b.  As used in this subsection:
   (1)  “Bank” means a corporation or limited liability company engaged in the business of banking and organized under the laws of this state, another state, or the United States. “Bank” also means a savings and loan, savings association, or savings bank organized under the laws of another state or the United States.
   (2)  “Credit union” means a cooperative, nonprofit association incorporated under chapter 533 or the federal Credit Union Act, 12 U.S.C. §1751 et seq., and that is insured by the national credit union administration and includes an office of a credit union.
    Sec. 2.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 3.  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.
   This bill excludes interest income received from banks and credit unions from the calculation of Iowa net income for purposes of the individual income tax.
   The bill defines “bank” and “credit union”.
   The bill takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2025.