A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.

SF 19 expands Iowa's farm tenancy net income exclusion for individual income tax, allowing eligible farmers to exclude income from farm tenancy agreements received through certain business entities (like partnerships, S-corporations, trusts, or disregarded entities) rather than only direct payments. It specifically clarifies that net income accruing to these entities is treated as distributed to the farmer-owner if they can withdraw or compel distribution, matching the exclusion's current treatment for direct income. The bill applies retroactively to tax years beginning January 1, 2024, meaning farmers may qualify for tax adjustments on 2024 returns. This change directly affects Iowa farmers operating through pass-through business structures who previously couldn't claim this exclusion for their farm tenancy income.