Budget & Taxes (Income Tax)

in committee · Iowa · House Jan 14, 2025

HF 27: A bill for an act relating to the deduction of the purchase amount of nonathletic school uniforms for purposes of the individual income tax, and including retroactive applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deduction for school uniforms, reducing taxable income for families - direct tax relief for middle-income households under income tax policy.95% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Iowa · Senate Feb 11, 2025

SF 201: A bill for an act relating to individual income taxation by exempting certain amounts received from nonqualified deferred compensation plans and including retroactive applicability provisions.

SF 201 exempts up to $500,000 of income from nonqualified deferred compensation plans (employer retirement plans for select employees) from Iowa's individual income tax for eligible individuals. It directly affects disabled people, those aged 55 or older, and surviving spouses with an insurable interest in a qualifying deceased person. The bill allows these taxpayers to exclude both the plan amount and its earnings from taxable income, mirroring existing retirement income exclusion rules. This exemption applies retroactively to tax years beginning on or after January 1, 2025.

Topics ✗ Budget & TaxesOpposes Budget & TaxesCreates tax exemption for select high-earning employees (nonqualified deferred comp), reducing state revenue; aligns with tax breaks for wealthy, per indicators.85% confidence

Sub-Topics Income Tax

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in committee · Iowa · House Feb 12, 2025

HF 360: A bill for an act excluding overtime from the individual income tax, and including applicability provisions.

HF 360 would exclude overtime pay from Iowa's individual income tax calculation. Specifically, it removes from taxable income the portion of compensation earned for hours worked beyond 40 in a workweek, paid at rates of 1.5 to 2 times the regular wage under federal law (29 U.S.C. §207). This change directly affects Iowa workers who earn overtime pay, reducing their taxable income for those hours. The policy takes effect for tax years beginning January 1, 2026. The bill does not alter federal overtime rules but changes how Iowa taxes that specific income.

Topics ✓ Budget & TaxesSupports Budget & TaxesExcludes overtime pay from taxable income, reducing tax burden for workers and aligning with tax relief indicators for middle/lower income earners.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExcludes overtime pay from taxable income, increasing workers' net earnings for hours beyond 40 without altering federal overtime standards.95% confidence

Sub-Topics Business Taxes Income Tax Tax Incentives Labor Standards

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in committee · Iowa · House Feb 12, 2025

HF 361: A bill for an act exempting cash tips from the individual income tax, and including applicability provisions.

HF 361 exempts cash tips reported to employers via IRS Form 6053(a) from Iowa's individual income tax. It directly affects workers who receive cash tips (such as servers or bartenders) by reducing their taxable income for state tax purposes. The bill adds a provision allowing taxpayers to subtract these reported cash tips when calculating their Iowa tax liability. This change applies to tax years beginning on or after January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts cash tips from state income tax, providing tax relief for service workers (lower/middle income), directly aligning with support indicators.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExempts cash tips from state tax, increasing take-home pay for tipped workers (servers/bartenders), directly enhancing wage compensation under employment standards.90% confidence

Sub-Topics Income Tax Minimum Wage

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in committee · Iowa · House Feb 12, 2025

HF 358: A bill for an act relating to the individual income tax credits for volunteer fire fighters, volunteer emergency medical services personnel members, and reserve peace officers by increasing the amounts of the credits, and including retroactive applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesIncreases tax credits for volunteer public service workers, providing direct tax relief to lower-income individuals through higher refundable credits.95% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Iowa · House Feb 13, 2025

HF 417: A bill for an act modifying the tuition and textbook tax credit available against the individual income tax, and including retroactive applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesIncreases tuition/textbook tax credit from 25% to 50%, providing direct tax relief to eligible families for K-12 education expenses.95% confidence ✓ EducationSupports EducationIncreases tax credit for K-12 tuition/textbooks from 25% to 50%, expanding financial support for families and improving educational access to accredited schools.95% confidence

Sub-Topics Income Tax Tax Credits Curriculum School Choice

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in committee · Iowa · House Feb 17, 2025

HF 435: A bill for an act creating a deduction available against the individual income tax for gross rent paid by a taxpayer, and including applicability provisions.

This bill creates a new tax deduction for Iowa renters, allowing individuals to subtract gross rent paid for their primary home (including manufactured/mobile homes) from their individual income tax. It directly affects renters who use a dwelling as their main residence, covering rent for the home itself and up to one acre of land for manufactured homes. The deduction applies to rent paid at arm's length for occupancy, with "homestead" defined as a rented primary residence. The provision takes effect for tax years beginning January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deduction for renters, reducing taxable income for primary residence renters - direct tax relief for middle/lower income.95% confidence ✓ HousingSupports HousingCreates tax deduction for renters, reducing tax burden on primary residence rent, increasing affordability for low-income households.95% confidence

Sub-Topics Income Tax Property Taxes Renters Tenant Rights

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in committee · Iowa · House Feb 20, 2025

HF 496: A bill for an act modifying the individual and alternate income tax rates, and including applicability provisions.

This Iowa bill (HF 496) lowers the state's individual income tax rates for 2026 and beyond. It reduces the standard tax rate from 3.8% to 2.5% on taxable income, and lowers the alternate tax rate from 4.3% to 3.0% for higher-income filers. The changes apply to all Iowa residents and nonresidents with taxable income, affecting most individual income tax returns filed for tax years beginning January 1, 2026. The bill modifies existing tax calculation methods but does not change filing requirements or exemptions.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill reduces individual income tax rates for all filers, providing direct tax relief and lowering state revenue, aligning with tax reduction support indicators.95% confidence

Sub-Topics Business Taxes Income Tax

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in committee · Iowa · House Feb 24, 2025

HF 566: A bill for an act modifying individual income tax rates and providing tax credits for certain married persons filing a joint return, and including effective date and retroactive applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax relief via 0% rate and $1,000 per dependent credit for qualifying families, reducing tax burden on middle/lower income.95% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Iowa · House Feb 24, 2025

HF 568: A bill for an act excluding interest income earned from banks and credit unions from the calculations of Iowa net income for purposes of the individual income tax, and including effective date and retroactive applicability provisions.

HF 568 removes interest income earned from banks and credit unions from Iowa's calculation of individual income tax. This directly affects Iowa taxpayers who earn interest on savings accounts, certificates of deposit, or similar deposits at qualifying financial institutions. The bill defines "bank" broadly (including credit unions and savings associations) and specifies that the change applies retroactively to tax years beginning on or after January 1, 2025. It does not change other tax rules but reduces taxable income for affected individuals starting in 2025.

Topics ✓ Budget & TaxesSupports Budget & TaxesBill provides tax relief by excluding interest income from taxable income for Iowa taxpayers, reducing individual tax burden on savings/CD interest.95% confidence

Sub-Topics Income Tax

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