Budget & Taxes (Income Tax)

passed · Iowa · House Mar 26, 2025

HF 624: 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.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesExpands tax exclusion for farmers, reducing taxable income and providing tax relief under income tax provisions.95% confidence

Sub-Topics Income Tax

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in committee · Iowa · House Apr 17, 2025

HF 268: A bill for an act exempting cash tips from the individual income tax, and including applicability provisions.

House File 268 proposes to exempt cash tips from the individual income tax. It directly affects individuals who receive cash tips and report them to their employers. The bill amends existing tax code to allow taxpayers to subtract the amount of reported cash tips from their taxable income. This change would apply to tax years beginning on or after January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts cash tips from income tax, providing tax relief to service workers (middle/lower income), aligning with tax relief indicators for budget/taxes.95% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExempts cash tips from income tax, increasing take-home pay for tipped workers. Directly advances workers' financial compensation under labor & employment policies.95% confidence

Sub-Topics Income Tax

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in committee · Iowa · House Feb 10, 2025

HF 293: A bill for an act exempting cash tips from the individual income tax, and including applicability provisions.

This bill 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 (like servers or bartenders) and report them to employers as required by federal law. The key provision allows taxpayers to subtract these reported cash tips from their taxable income when filing state taxes. The exemption applies to tax years beginning on or after January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts cash tips from state income tax for service workers, providing tax relief to lower-income earners by reducing taxable income.95% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExempts cash tips from state income tax, increasing net wages for tipped workers like servers, directly supporting wage benefits under Labor & Employment.90% confidence

Sub-Topics Income Tax

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died · Iowa · House Apr 28, 2025

HF 622: A bill for an act creating a catastrophic savings account and modifying individual income taxes for account holders and including applicability provisions.

House File 622 establishes the "Catastrophic Savings Account Act" in Iowa, allowing residents to create special interest-bearing savings accounts beginning January 1, 2026. The bill permits account holders to deduct contributions and interest earned from their state individual income tax, up to specific lifetime limits based on their homeowner's insurance premium or home value. Funds from these accounts can be used for "qualified catastrophic expenses," which include deductibles for homeowner's insurance policies covering events like floods or windstorms, or declared natural disasters. Withdrawals for non-qualified expenses are added back to taxable income and may incur a penalty.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deductions for savings used on catastrophic expenses, offering relief to middle/lower income households through modified individual income tax rules.95% confidence

Sub-Topics Income Tax

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in committee · Iowa · House May 15, 2025

HF 961: A bill for an act relating to individual income taxation by exempting certain amounts received from nonqualified deferred compensation plans and including retroactive applicability provisions.

HF 961 exempts up to $500,000 of income from nonqualified deferred compensation plans from state individual income tax. This exemption applies to taxpayers who are disabled, 55 years of age or older, or the surviving spouse or survivor with an insurable interest of an individual who would have qualified. The bill amends the state's tax code to include this new subtraction from net income. It also includes retroactive applicability, making it effective for tax years beginning on or after January 1, 2025.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts $500k income from tax for disabled, 55+, or surviving spouses, providing targeted tax relief per tax code amendment.95% confidence

Sub-Topics Income Tax

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in committee · Iowa · House Jan 14, 2025

HF 27: A bill for an act relating to the deduction of the purchase amount of nonathletic school uniforms for purposes of the individual income tax, and including retroactive applicability provisions.

This bill allows Iowa taxpayers to deduct up to $500 per student for the cost of required nonathletic school uniforms purchased for children attending public or private schools. It directly affects families with school-aged children who must buy uniforms for their children's schools. The deduction applies to tax years beginning on or after January 1, 2025, and includes retroactive application to that date. The provision does not cover athletic uniforms and is limited to the purchase amount, not other school expenses.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deduction for school uniforms, reducing taxable income for families - direct tax relief for middle-income households under income tax policy.95% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Iowa · House Feb 12, 2025

HF 360: A bill for an act excluding overtime from the individual income tax, and including applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesExcludes overtime pay from taxable income, reducing tax burden for workers and aligning with tax relief indicators for middle/lower income earners.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExcludes overtime pay from taxable income, increasing workers' net earnings for hours beyond 40 without altering federal overtime standards.95% confidence

Sub-Topics Business Taxes Income Tax Tax Incentives Labor Standards

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in committee · Iowa · House Feb 12, 2025

HF 361: A bill for an act exempting cash tips from the individual income tax, and including applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesExempts cash tips from state income tax, providing tax relief for service workers (lower/middle income), directly aligning with support indicators.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentExempts cash tips from state tax, increasing take-home pay for tipped workers (servers/bartenders), directly enhancing wage compensation under employment standards.90% confidence

Sub-Topics Income Tax Minimum Wage

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in committee · Iowa · House Feb 12, 2025

HF 358: A bill for an act relating to the individual income tax credits for volunteer fire fighters, volunteer emergency medical services personnel members, and reserve peace officers by increasing the amounts of the credits, and including retroactive applicability provisions.

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.

Topics ✓ Budget & TaxesSupports Budget & TaxesIncreases tax credits for volunteer public service workers, providing direct tax relief to lower-income individuals through higher refundable credits.95% confidence

Sub-Topics Income Tax Tax Credits

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in committee · Iowa · House Feb 13, 2025

HF 417: A bill for an act modifying the tuition and textbook tax credit available against the individual income tax, and including retroactive applicability provisions.

HF 417 increases Iowa's tuition and textbook tax credit for eligible families from 25% to 50% of the first $2,000 spent annually per dependent on private or accredited public school tuition and textbooks (K-12). It directly affects Iowa taxpayers with children attending qualifying non-profit, accredited schools that comply with civil rights laws. The bill applies retroactively to tax years beginning January 1, 2025, meaning families can claim the higher credit for 2025 taxes immediately. The credit remains subject to existing eligibility rules, including school accreditation and non-profit status requirements.

Topics ✓ Budget & TaxesSupports Budget & TaxesIncreases tuition/textbook tax credit from 25% to 50%, providing direct tax relief to eligible families for K-12 education expenses.95% confidence ✓ EducationSupports EducationIncreases tax credit for K-12 tuition/textbooks from 25% to 50%, expanding financial support for families and improving educational access to accredited schools.95% confidence

Sub-Topics Income Tax Tax Credits Curriculum School Choice

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