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Senate File 297 - IntroducedA Bill ForAn Act 1relating to the individual income tax by creating
2a tax credit for community college students pursuing a
3credential leading to a high-demand occupation and including
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 260C.41 High-demand occupation tax
2credit — agreement.
31. A high-demand occupation tax credit is allowed under this
4section. The tax credit is allowed against the taxes imposed
5in chapter 422, division II, as provided in section 422.11K,
6to facilitate an increase in the number of Iowans prepared to
7enter high-demand occupational fields.
82. In order to qualify for the tax credit, the taxpayer
9must meet qualifications established by the board of directors
10of the community college in which the taxpayer enrolled and
11attended a course of study in accordance with this subsection.
12At a minimum, the taxpayer must comply with all of the
13following:
14a. Be a resident of Iowa who enrolls in a community
15college in a course of study which results in the community
16college conferring a credential that qualifies the taxpayer
17for a high-demand occupation. For purposes of this section,
18“credential” means a postsecondary certificate, diploma, or
19degree, but not more than an associate degree. For purposes
20of this section, “high-demand occupation” means an occupation
21in the fields of science, technology, engineering, and
22mathematics, and occupations aligned with the six career and
23technical education service areas as defined in section 256.11,
24subsection 5, paragraph “h”.
25b. Execute an agreement with the community college under
26which the taxpayer maintains a grade point average of at least
27two-point-five on a four-point grade scale, or the equivalent
28if another grade scale is used, until the taxpayer is issued a
29credential by the community college for successful completion
30of a course of study that meets the requirements of paragraph
31“a”. The agreement shall be for at least two years, but not
32more than five years.
333. a. If the taxpayer meets the terms of the agreement
34entered into under subsection 2, the community college shall
35submit to the department of revenue the total amount of tuition
-1-1and mandatory fees paid by the taxpayer in earning a credential
2under this section.
3b. The department of revenue shall issue the tax credit
4certificate to the taxpayer upon receipt of information
5submitted to the department of revenue by a community college
6in accordance with this subsection.
74. The tax credit shall equal the gross amount paid to the
8community college for tuition and mandatory fees paid by the
9taxpayer under the agreement.
105. a. To claim a tax credit under this section, a taxpayer
11shall include one or more tax credit certificates with the
12taxpayer’s tax return.
13b. The tax credit certificate shall contain the taxpayer’s
14name, address, tax identification number, the amount of the
15credit, and any other information required by the department
16of revenue.
17c. The tax credit certificate, unless rescinded by the
18department of revenue, shall be accepted by the department
19of revenue as payment for taxes imposed in chapter 422,
20division II, subject to any conditions or restrictions placed
21by the department of revenue upon the face of the tax credit
22certificate and subject to the limitations of this tax credit.
236. A tax credit in excess of the taxpayer’s liability for
24the tax year is not refundable but may be credited to the tax
25liability for the following five tax years or until depleted,
26whichever is earlier. However, if the taxpayer enters into
27active military service as a member of the Iowa army national
28guard, the Iowa air national guard, the active military forces
29of the United States, the army national guard of the United
30States, or the air national guard of the United States, or
31enrolls in an accredited private institution as defined in
32section 261.9 or in an institution of higher learning governed
33by the state board of regents, the tax credit may be credited
34to the tax liability for an additional two years or until
35depleted, whichever is earlier. A tax credit shall not be
-2-1carried back to a tax year prior to the tax year in which the
2taxpayer redeems the tax credit. A tax credit shall not be
3transferable to any other person.
4 Sec. 2. NEW SECTION. 422.11K High-demand occupation tax
5credit.
6The taxes imposed under this division, less the credits
7allowed under section 422.12, shall be reduced by a high-demand
8occupation tax credit allowed under section 260C.41.
9 Sec. 3. APPLICABILITY. This Act applies to tax years
10beginning on or after January 1, 2020.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill provides for a high-demand occupation tax credit
15to facilitate an increase in the number of Iowans prepared to
16enter high-demand occupational fields.
17To qualify, the taxpayer must enroll in and attend a course
18of study at a community college which results in the community
19college conferring a credential that qualifies the taxpayer
20for a high-demand occupation. The bill defines “high-demand
21occupation” as an occupation in the fields of science,
22technology, engineering, and mathematics, and occupations
23aligned with any of six career and technical education service
24areas.
25The taxpayer must also execute an agreement with the
26community college for at least two years, but not more than
27five years, under which the taxpayer maintains a grade point
28average of at least 2.5 on a 4.0 grade scale.
29If the taxpayer meets the terms of the agreement, the
30community college submits to the department of revenue the
31total amount of tuition and mandatory fees paid by the taxpayer
32in earning a credential, and the department must issue the
33tax credit certificate. The tax credit shall equal the gross
34amount paid by the taxpayer to the community college for
35tuition and mandatory fees.
-3- 1A tax credit in excess of the taxpayer’s liability for
2the tax year is not refundable but may be credited to the
3personal net income tax liability for the following five tax
4years or until depleted, whichever is earlier. However, if
5the taxpayer enters into active military service or enrolls
6in an accredited private postsecondary institution in Iowa or
7a regents university, the tax credit may be credited to the
8tax liability for an additional two years or until depleted,
9whichever is earlier.
10The bill applies to tax years beginning on or after January
111, 2020.
-4-jm/jh
2a tax credit for community college students pursuing a
3credential leading to a high-demand occupation and including
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 260C.41 High-demand occupation tax
2credit — agreement.
31. A high-demand occupation tax credit is allowed under this
4section. The tax credit is allowed against the taxes imposed
5in chapter 422, division II, as provided in section 422.11K,
6to facilitate an increase in the number of Iowans prepared to
7enter high-demand occupational fields.
82. In order to qualify for the tax credit, the taxpayer
9must meet qualifications established by the board of directors
10of the community college in which the taxpayer enrolled and
11attended a course of study in accordance with this subsection.
12At a minimum, the taxpayer must comply with all of the
13following:
14a. Be a resident of Iowa who enrolls in a community
15college in a course of study which results in the community
16college conferring a credential that qualifies the taxpayer
17for a high-demand occupation. For purposes of this section,
18“credential” means a postsecondary certificate, diploma, or
19degree, but not more than an associate degree. For purposes
20of this section, “high-demand occupation” means an occupation
21in the fields of science, technology, engineering, and
22mathematics, and occupations aligned with the six career and
23technical education service areas as defined in section 256.11,
24subsection 5, paragraph “h”.
25b. Execute an agreement with the community college under
26which the taxpayer maintains a grade point average of at least
27two-point-five on a four-point grade scale, or the equivalent
28if another grade scale is used, until the taxpayer is issued a
29credential by the community college for successful completion
30of a course of study that meets the requirements of paragraph
31“a”. The agreement shall be for at least two years, but not
32more than five years.
333. a. If the taxpayer meets the terms of the agreement
34entered into under subsection 2, the community college shall
35submit to the department of revenue the total amount of tuition
-1-1and mandatory fees paid by the taxpayer in earning a credential
2under this section.
3b. The department of revenue shall issue the tax credit
4certificate to the taxpayer upon receipt of information
5submitted to the department of revenue by a community college
6in accordance with this subsection.
74. The tax credit shall equal the gross amount paid to the
8community college for tuition and mandatory fees paid by the
9taxpayer under the agreement.
105. a. To claim a tax credit under this section, a taxpayer
11shall include one or more tax credit certificates with the
12taxpayer’s tax return.
13b. The tax credit certificate shall contain the taxpayer’s
14name, address, tax identification number, the amount of the
15credit, and any other information required by the department
16of revenue.
17c. The tax credit certificate, unless rescinded by the
18department of revenue, shall be accepted by the department
19of revenue as payment for taxes imposed in chapter 422,
20division II, subject to any conditions or restrictions placed
21by the department of revenue upon the face of the tax credit
22certificate and subject to the limitations of this tax credit.
236. A tax credit in excess of the taxpayer’s liability for
24the tax year is not refundable but may be credited to the tax
25liability for the following five tax years or until depleted,
26whichever is earlier. However, if the taxpayer enters into
27active military service as a member of the Iowa army national
28guard, the Iowa air national guard, the active military forces
29of the United States, the army national guard of the United
30States, or the air national guard of the United States, or
31enrolls in an accredited private institution as defined in
32section 261.9 or in an institution of higher learning governed
33by the state board of regents, the tax credit may be credited
34to the tax liability for an additional two years or until
35depleted, whichever is earlier. A tax credit shall not be
-2-1carried back to a tax year prior to the tax year in which the
2taxpayer redeems the tax credit. A tax credit shall not be
3transferable to any other person.
4 Sec. 2. NEW SECTION. 422.11K High-demand occupation tax
5credit.
6The taxes imposed under this division, less the credits
7allowed under section 422.12, shall be reduced by a high-demand
8occupation tax credit allowed under section 260C.41.
9 Sec. 3. APPLICABILITY. This Act applies to tax years
10beginning on or after January 1, 2020.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill provides for a high-demand occupation tax credit
15to facilitate an increase in the number of Iowans prepared to
16enter high-demand occupational fields.
17To qualify, the taxpayer must enroll in and attend a course
18of study at a community college which results in the community
19college conferring a credential that qualifies the taxpayer
20for a high-demand occupation. The bill defines “high-demand
21occupation” as an occupation in the fields of science,
22technology, engineering, and mathematics, and occupations
23aligned with any of six career and technical education service
24areas.
25The taxpayer must also execute an agreement with the
26community college for at least two years, but not more than
27five years, under which the taxpayer maintains a grade point
28average of at least 2.5 on a 4.0 grade scale.
29If the taxpayer meets the terms of the agreement, the
30community college submits to the department of revenue the
31total amount of tuition and mandatory fees paid by the taxpayer
32in earning a credential, and the department must issue the
33tax credit certificate. The tax credit shall equal the gross
34amount paid by the taxpayer to the community college for
35tuition and mandatory fees.
-3- 1A tax credit in excess of the taxpayer’s liability for
2the tax year is not refundable but may be credited to the
3personal net income tax liability for the following five tax
4years or until depleted, whichever is earlier. However, if
5the taxpayer enters into active military service or enrolls
6in an accredited private postsecondary institution in Iowa or
7a regents university, the tax credit may be credited to the
8tax liability for an additional two years or until depleted,
9whichever is earlier.
10The bill applies to tax years beginning on or after January
111, 2020.
-4-jm/jh