HF 222 allocates hotel and motel tax revenue collected between August 23 and Labor Day to schools that begin their academic year after Labor Day. It creates an "alternate school start date fund" in the state treasury, managed by the Department of Education, which distributes funds to qualifying schools based on enrollment. Schools must meet the standard 1,080 hours of instruction (as if starting August 23, excluding weather-related closures) to receive funding. The funds are deposited into school districts' general funds as "miscellaneous income" but are not counted toward district costs.
This bill sets the state funding growth rate at 2.25% for Iowa's 2025 school budget year, directly affecting all public school districts in the state. It modifies how property tax replacement payments are calculated using student enrollment and previous funding formulas, while also adjusting transportation equity payments. The bill establishes a new school district funding supplement and updates the regular program state cost per student. These changes determine annual state contributions to schools for the 2025 budget cycle.
SF 206 allows Iowa school districts to use revenues from their district management levy to fund teacher recruitment and retention incentives. The bill sets specific limits: incentives cannot exceed 10% of an initial teacher's salary annually and must end after five school budget years. School districts may choose between this program or early retirement benefits, but cannot use both simultaneously or within five years of adopting the other. It requires public comment before adoption and prohibits using levy funds for early retirement costs in the same fiscal year as recruitment/retention incentives. This directly affects school districts seeking to address teacher staffing challenges through financial incentives.
This bill requires water utilities in Iowa to accept and retain valid exemption certificates that allow certain water users to avoid sales or water service taxes. It directly affects water utilities and customers who possess these certificates, preventing utilities from forcing customers to seek tax refunds instead of applying the exemption directly. Utilities that refuse valid certificates must pay a civil penalty equal to the tax amount plus interest to the state revenue department. The bill also defines key terms and mandates the revenue department to create rules for implementation.
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.
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.
This bill increases Iowa's workforce housing tax incentive program funding limits. It raises the maximum annual allocation from $35 million to $50 million, with $25 million specifically reserved for housing projects in small cities (as defined in section 15.352) registered after July 1, 2017 - up from $17.5 million. The change directly affects developers building affordable housing for low-to-moderate-income workers, particularly those in smaller communities. The policy modifies how tax credits are distributed under existing tax code provisions without altering the program's eligibility criteria.
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.
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.
HSB 130 creates a tax credit for Iowa businesses and nonprofits investing in quantum technology infrastructure. It allows eligible applicants (including consortia) to claim credits against individual or corporate income taxes for qualifying capital investments - like lab equipment and software - used to build shared quantum facilities, provided they secure at least $2 million in federal grants. The credit is available for tax years 2026-2032, with annual funding capped at $24 million and a total program limit of $44 million. To qualify, projects must be completed before 2031 and approved by Iowa’s authority, with credits refundable if exceeding tax liability.
