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 59 expands Iowa's farm tenancy net income exclusion for individual income tax by allowing income earned through certain business entities (like partnerships, S corporations, trusts, or disregarded entities) to qualify for the exclusion, just as if received directly by the farmer. This change directly affects farmers who operate through these business structures, enabling them to exclude farm tenancy income from their taxable income under the same conditions as direct recipients. The bill clarifies that income accruing to a grantor trust or disregarded entity is deemed distributed to its sole owner if they have the right to withdraw it. It takes effect immediately upon enactment and applies retroactively to tax years beginning January 1, 2024.