Budget & Taxes

HF 624 expands Iowa's farm tenancy net income exclusion for individual income tax, allowing farmers who earn income through certain business structures (like partnerships, S-corporations, trusts, or single-owner entities) to claim the exclusion as if they received the income directly. It specifically clarifies that net income distributed from these entities qualifies, provided the farmer has the right to withdraw or compel distribution of that income. The change applies retroactively to tax years beginning January 1, 2024, meaning eligible farmers can adjust prior-year taxes. This directly benefits Iowa farmers operating through business entities rather than personally, aligning their tax treatment with farmers who receive income directly from farm tenancies.