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Senate File 123 - IntroducedA Bill ForAn Act 1providing businesses with income, franchise, moneys and
2credits, and gross premiums tax credits for providing child
3care benefits to employees of the business, and including
4applicability date provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 237A.31 Employer child care tax
2credit.
31. A business may receive an employer child care tax credit
4for providing child care employee benefits to employees of the
5business. The credit may be applied against income tax imposed
6under chapter 422, subchapter II or III, the franchise tax
7imposed under chapter 422, subchapter V, the gross premiums
8tax imposed under chapter 432, or the moneys and credits tax
9imposed in section 533.329. The amount of the credit equals
10the costs to provide the benefit up to one hundred fifty
11thousand dollars per year.
122. To be eligible for an employer child care tax credit, the
13business must provide child care employee benefits to employees
14of the business through any of the following:
15a. Build a new structure or rehabilitate an existing
16structure to be used as a child care center where children of
17employees of the taxpayer are provided child care. A business
18may construct or rehabilitate the structure in conjunction with
19another business but only the actual cost of the business shall
20be considered in determining the credit.
21b. Lease a child care center where the children of the
22employees of the business are provided child care.
23c. Pay the annual operating expenses of the child care
24center including training for the employees of the center.
253. Any credit in excess of the tax liability is not
26refundable but the excess for the tax year may be credited
27to the tax liability for the following five years or until
28depleted, whichever is earlier. The director of revenue shall
29adopt rules to implement this section.
30 Sec. 2. NEW SECTION. 422.12O Employer child care tax
31credit.
321. The taxes imposed under this subchapter, less the credits
33allowed under section 422.12, shall be reduced by an employer
34child care tax credit received pursuant to section 237A.31.
352. An individual may claim the tax credit allowed a
-1-1partnership, S corporation, limited liability company, estate,
2or trust electing to have the income taxed directly to the
3individual. The amount claimed by the individual shall be
4based upon the pro rata share of the individual’s earnings of a
5partnership, S corporation, limited liability company, estate,
6or trust.
7 Sec. 3. Section 422.33, Code 2021, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 31. The taxes imposed under this subchapter
10shall be reduced by an employer child care tax credit received
11pursuant to section 237A.31.
12 Sec. 4. Section 422.60, Code 2021, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 14. The taxes imposed under this subchapter
15shall be reduced by an employer child care tax credit received
16pursuant to section 237A.31.
17 Sec. 5. NEW SECTION. 432.12N Employer child care tax
18credit.
19The taxes imposed under this chapter shall be reduced by an
20employer child care tax credit received pursuant to section
21237A.31.
22 Sec. 6. Section 533.329, subsection 2, Code 2021, is amended
23by adding the following new paragraph:
24 NEW PARAGRAPH. l. The moneys and credits tax imposed under
25this section shall be reduced by an employer child care tax
26credit received pursuant to section 237A.31.
27 Sec. 7. APPLICABILITY. This Act applies to tax years
28beginning on or after January 1, 2022.
29EXPLANATION
30The inclusion of this explanation does not constitute agreement with
31the explanation’s substance by the members of the general assembly.
32This bill provides businesses with income, franchise, moneys
33and credits, and gross premiums tax credits for providing child
34care benefits to employees of the business.
35The child care employee benefits include the following:
-2-1building or rehabilitating an existing structure as a child
2care center for employee use, leasing a child care center, or
3paying the annual operating expenses of the child care center
4including training for the employees of the center.
5The amount of the credit equals 25 percent of the costs to
6provide the benefit up to $150,000 per year. The credit is
7nonrefundable but any excess may be carried forward for up to
8five tax years.
9The bill applies to tax years beginning on or after January
101, 2022.
-3-jm/jh
2credits, and gross premiums tax credits for providing child
3care benefits to employees of the business, and including
4applicability date provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 237A.31 Employer child care tax
2credit.
31. A business may receive an employer child care tax credit
4for providing child care employee benefits to employees of the
5business. The credit may be applied against income tax imposed
6under chapter 422, subchapter II or III, the franchise tax
7imposed under chapter 422, subchapter V, the gross premiums
8tax imposed under chapter 432, or the moneys and credits tax
9imposed in section 533.329. The amount of the credit equals
10the costs to provide the benefit up to one hundred fifty
11thousand dollars per year.
122. To be eligible for an employer child care tax credit, the
13business must provide child care employee benefits to employees
14of the business through any of the following:
15a. Build a new structure or rehabilitate an existing
16structure to be used as a child care center where children of
17employees of the taxpayer are provided child care. A business
18may construct or rehabilitate the structure in conjunction with
19another business but only the actual cost of the business shall
20be considered in determining the credit.
21b. Lease a child care center where the children of the
22employees of the business are provided child care.
23c. Pay the annual operating expenses of the child care
24center including training for the employees of the center.
253. Any credit in excess of the tax liability is not
26refundable but the excess for the tax year may be credited
27to the tax liability for the following five years or until
28depleted, whichever is earlier. The director of revenue shall
29adopt rules to implement this section.
30 Sec. 2. NEW SECTION. 422.12O Employer child care tax
31credit.
321. The taxes imposed under this subchapter, less the credits
33allowed under section 422.12, shall be reduced by an employer
34child care tax credit received pursuant to section 237A.31.
352. An individual may claim the tax credit allowed a
-1-1partnership, S corporation, limited liability company, estate,
2or trust electing to have the income taxed directly to the
3individual. The amount claimed by the individual shall be
4based upon the pro rata share of the individual’s earnings of a
5partnership, S corporation, limited liability company, estate,
6or trust.
7 Sec. 3. Section 422.33, Code 2021, is amended by adding the
8following new subsection:
9 NEW SUBSECTION. 31. The taxes imposed under this subchapter
10shall be reduced by an employer child care tax credit received
11pursuant to section 237A.31.
12 Sec. 4. Section 422.60, Code 2021, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 14. The taxes imposed under this subchapter
15shall be reduced by an employer child care tax credit received
16pursuant to section 237A.31.
17 Sec. 5. NEW SECTION. 432.12N Employer child care tax
18credit.
19The taxes imposed under this chapter shall be reduced by an
20employer child care tax credit received pursuant to section
21237A.31.
22 Sec. 6. Section 533.329, subsection 2, Code 2021, is amended
23by adding the following new paragraph:
24 NEW PARAGRAPH. l. The moneys and credits tax imposed under
25this section shall be reduced by an employer child care tax
26credit received pursuant to section 237A.31.
27 Sec. 7. APPLICABILITY. This Act applies to tax years
28beginning on or after January 1, 2022.
29EXPLANATION
30The inclusion of this explanation does not constitute agreement with
31the explanation’s substance by the members of the general assembly.
32This bill provides businesses with income, franchise, moneys
33and credits, and gross premiums tax credits for providing child
34care benefits to employees of the business.
35The child care employee benefits include the following:
-2-1building or rehabilitating an existing structure as a child
2care center for employee use, leasing a child care center, or
3paying the annual operating expenses of the child care center
4including training for the employees of the center.
5The amount of the credit equals 25 percent of the costs to
6provide the benefit up to $150,000 per year. The credit is
7nonrefundable but any excess may be carried forward for up to
8five tax years.
9The bill applies to tax years beginning on or after January
101, 2022.
-3-jm/jh