A bill for an act creating a state corporate income tax deduction for net controlled foreign corporation tested income, and including retroactive applicability provisions.

This bill updates Iowa's corporate tax code to allow a deduction for income earned by corporations from foreign operations (now termed "net controlled foreign corporation tested income" or NCTI under federal law), replacing outdated references to the previous federal term "GILTI." It directly affects Iowa corporations with foreign subsidiaries that pay taxes on foreign earnings. The key mechanism removes the specific reference to "GILTI" in tax code section 422.35(12) and aligns the deduction with the current federal definition of NCTI under IRC section 951A. The deduction applies retroactively to tax years beginning January 1, 2026.