This bill allows Iowa individual income taxpayers to deduct expenses paid to licensed nursing facilities (under Chapter 135C) for health-related care and services, provided those costs weren't already deducted for federal tax purposes. It directly affects Iowans paying for nursing care who file state income tax returns. The deduction applies to expenses incurred for health services, not general living costs at the facility. The law includes retroactive application, making it effective for tax years beginning on or after January 1, 2025.
HF 794 requires Iowa to withhold state income tax from sports wagering winnings whenever federal income tax is withheld on those winnings. This applies to individuals who win amounts triggering federal tax withholding, such as winnings over $600 from gambling under federal rules. The law will take effect on January 1, 2026.
HF 567 excludes net capital gains from selling gold or silver from Iowa's individual income tax calculations. It directly affects Iowa taxpayers who sell gold or silver coins, bars, ingots, or pure gold/silver, allowing them to subtract these gains when computing taxable income. The bill defines "gold or silver" broadly to include common forms like coins and bars, and applies retroactively to tax years starting January 1, 2025. This change modifies how certain investment gains are taxed but does not alter the tax rate applied to other income.
HF 30 creates a tax deduction for Iowa law firms representing indigent clients in specific court-appointed cases. It directly affects eligible law firms with two or more attorneys (who practice at least half the year) and attorneys licensed for fewer than 10 years, for cases appointed on or after July 1, 2025. The deduction equals the difference between $150 per hour (or the firm's actual rate) and the state's standard hourly rate ($76-$86) for such cases, calculated based on the firm's pro rata share. The deduction applies retroactively to tax years beginning January 1, 2025.
HF 110 proposes to exclude overtime pay from the individual income tax in Iowa. This bill directly affects individuals who earn overtime compensation. It allows taxpayers to subtract the portion of their compensation earned at one and a half times their regular rate from their taxable income. These provisions would apply to tax years beginning on or after January 1, 2026.
HF 988 establishes catastrophic savings accounts for Iowa residents who own homes, effective January 1, 2026. This bill allows account holders to deduct contributions to these accounts from their state income tax, with lifetime limits tied to their homeowner's insurance premiums or the home's assessed value for self-insured individuals. Interest earned on these accounts is also tax-deductible. Funds can be withdrawn tax-free to pay deductibles for homeowner's insurance related to defined catastrophic events like floods or windstorms. However, withdrawals for non-qualified expenses are subject to state income tax and a 2.5% penalty.
SSB 1239 proposes to eliminate Iowa's individual income tax and alternate income tax, affecting all individual taxpayers. It establishes a "taxpayer relief trust fund" and an "income tax elimination fund," along with an "income tax elimination board" to oversee this process. The bill mandates the transfer of state funds, including an initial $2.6 billion, into the taxpayer relief trust fund. These funds, to be administered by the Iowa Public Employees’ Retirement System (IPERS), are intended to generate investment returns to support the future elimination of the individual income tax.
House File 132 creates an individual income tax credit for taxpayers who purchase firearm safety devices. This credit is equal to the sales price of the device, up to a maximum of $500 per tax year. A "firearm safety device" includes mechanisms designed to prevent a firearm from being operated without deactivation, or new, steel gun safes purchased for personal use from licensed dealers or retailers. Any unused credit can be carried over to the following tax year, and the bill applies retroactively to purchases made on or after January 1, 2025.
HF 1024 proposes to exclude overtime pay from the individual income tax in Iowa. This bill directly affects individuals who earn compensation at a rate of one and a half times their regular pay by allowing them to subtract this income from their taxable earnings. The bill amends the state's tax code to implement this exclusion. If enacted, these provisions would apply to tax years beginning on or after January 1, 2026.
HF 1030 proposes to exempt certain cash tips from the individual income tax for qualifying Iowans. Individuals whose net income is less than $155,000 could subtract up to $25,000 in "qualified tips" from their taxable income. "Qualified tips" are defined as cash tips received in occupations that traditionally and customarily received cash tips before December 31, 2023. This exemption would apply to tax years beginning on or after January 1, 2026, unless the federal government enacts similar legislation.
