SSB 1119 (LSB 1644XC (4) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON WORKFORCE BILL BY CHAIRPERSON DICKEY)

A BILL FOR

An Act creating a deduction available against the individual income tax for educational expenses at institutions of higher education for career-related programs and apprenticeship programs, and including 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, the payment of expenses for the following:
   (1)  For instruction at an institution of higher education for career-related programs that do not qualify for college credit.
   (2)  For participation in an apprenticeship program.
   b.  Payments made from the Iowa education savings plan established in chapter 12D or from a similar plan do not qualify for the deduction under this subsection.
   c.  The department shall adopt rules pursuant to chapter 17A to implement this subsection.
   d.  As used in this subsection:
   (1)  “Apprenticeship program” means a program registered with the Iowa office of apprenticeship under chapter 84D.
   (2)  “Expenses” means tuition, fees, books, supplies, and equipment.
   (3)  “Institution of higher education” means any of the following:
   (a)  A community college established under chapter 260C.
   (b)  An institution governed by the state board of regents.
   (c)  An accredited private institution as defined in section 256.183, subsection 1.
   (4)  “Payment” includes loan repayments for expenses paid for instruction at an institution of higher education and for payments of expenses for instruction at an institution of higher education and for the participation in an apprenticeship program.
    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.
   This bill creates a deduction available against the individual income tax for educational expenses at institutions of higher education and apprenticeship programs.
   The bill allows an individual income taxpayer to deduct the expenses for instruction at an institution of higher education for career-related programs that do not qualify for college credit, and for participation in an apprenticeship program registered with the Iowa office of apprenticeship under Code chapter 84D.
   The bill defines “institution of higher education”, “expenses”, and “payment”.
   The bill applies retroactively to tax years beginning on or after January 1, 2025.