HF 661 creates a comprehensive child care package in Iowa. It expands the state's child and dependent care tax credit to match the federal credit amount (retroactive to 2025), establishes a state grant program to raise wages and provide health insurance/benefits for child care workers, and introduces a new small business tax credit for employers offering on-site or nearby child care (capping at $3,000 per employee annually, with a total $2 million annual limit). The bill also adjusts state child care assistance eligibility, raising required work hours for parents and increasing income thresholds to 265% (basic care) and 290% (special needs) of the federal poverty level, while requiring state reimbursement rates to match private-pay rates. These changes directly affect child care workers, small employers providing child care benefits, and low-income families seeking state assistance.
HF 601 requires money transfer businesses (licensees) to collect a $5 fee for each wire transfer of $500 or less, plus 2% of any amount over $500. The collected fees must be sent quarterly to Iowa's Department of Revenue, which then forwards all funds to the Office to Combat Human Trafficking. Customers who file individual income tax returns with a valid Social Security or tax ID number can claim a tax credit equal to the fees they paid during the year. Money transfer businesses must post notices informing customers about this tax credit opportunity. The bill directly affects money transfer service providers and their customers using wire transfers within Iowa.
HF 962 modifies the Iowa child and dependent care tax credit, affecting taxpayers who claim this credit against their individual income tax. It reduces the number of graduated income thresholds used to calculate the credit from seven to four. The bill also removes the current maximum income threshold for eligibility, allowing taxpayers with higher incomes to potentially claim the credit. Specifically, taxpayers with Iowa net income of $25,000 or more would be eligible for 50% of the federal child and dependent care credit. These changes would apply retroactively to tax years beginning on or after January 1, 2025.
HF 965 increases the state adoption tax credit available against the individual income tax. It raises the maximum credit for qualified adoption expenses from $5,000 to $20,000 per adoption, directly affecting taxpayers who adopt a child. The credit is refundable, meaning any amount exceeding a taxpayer's liability can be returned. This bill takes effect upon enactment and applies retroactively to adoptions finalized on or after January 1, 2024.
This bill allows Iowa taxpayers to deduct up to $500 per student for the cost of required nonathletic school uniforms purchased for children attending public or private schools. It directly affects families with school-aged children who must buy uniforms for their children's schools. The deduction applies to tax years beginning on or after January 1, 2025, and includes retroactive application to that date. The provision does not cover athletic uniforms and is limited to the purchase amount, not other school expenses.
HF 31 creates two new Iowa tax credits: one for "new residents" (individuals who moved to Iowa for full-time employment with no prior residency in the state) and one for "new graduates" (Iowa-educated individuals under 30 working full-time in Iowa). Both credits reduce state income tax by 100% for up to four consecutive tax years, starting with the first or second year of eligibility. The credits are non-refundable if they exceed tax liability, expire if recipients receive public assistance after the first claimed year, and apply retroactively to tax years beginning January 1, 2025. Eligibility is limited to one-time lifetime use per individual.
HF 358 increases the state income tax credit for volunteer firefighters, emergency medical services personnel, and reserve peace officers from $250 to $1,000 per tax year. It directly affects volunteers who served the entire tax year in these roles, compensating them for their unpaid service. The bill includes retroactive application, making the higher credit available for tax years beginning on or after January 1, 2025. This change modifies existing tax code sections to adjust the credit amounts and applies to qualifying taxpayers filing returns for those years.
HF 417 increases Iowa's tuition and textbook tax credit for eligible families from 25% to 50% of the first $2,000 spent annually per dependent on private or accredited public school tuition and textbooks (K-12). It directly affects Iowa taxpayers with children attending qualifying non-profit, accredited schools that comply with civil rights laws. The bill applies retroactively to tax years beginning January 1, 2025, meaning families can claim the higher credit for 2025 taxes immediately. The credit remains subject to existing eligibility rules, including school accreditation and non-profit status requirements.
HF 566 modifies Iowa's individual income tax rates for married couples filing jointly. It sets the tax rate to 0% for couples with five or more dependents under 18 or for first/second-time joint filers, and creates a $1,000 per dependent tax credit (up to 10 dependents under 18) for these couples. Any excess credit is refundable or can be applied to future tax bills. The bill takes effect immediately upon enactment and applies retroactively to tax years beginning January 1, 2025.
HF 958 creates a tax credit for Iowa individual income taxpayers who pay for premarital counseling, reducing their tax bill by up to $500 per couple. The credit covers the full cost of counseling services (defined as preparation for marriage), with any unused portion carried forward to future tax years but not refunded. This credit applies retroactively to tax years beginning January 1, 2025, meaning couples can claim it for 2025 and later tax filings. It directly affects Iowa residents seeking premarital counseling services who file individual income tax returns.
