Budget & Taxes (Income Tax)

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 · Senate Feb 11, 2025

SF 201: 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.

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.

Topics ✗ Budget & TaxesOpposes Budget & TaxesCreates tax exemption for select high-earning employees (nonqualified deferred comp), reducing state revenue; aligns with tax breaks for wealthy, per indicators.85% confidence

Sub-Topics Income Tax

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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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in committee · Iowa · House Feb 17, 2025

HF 435: A bill for an act creating a deduction available against the individual income tax for gross rent paid by a taxpayer, and including applicability provisions.

This bill creates a new tax deduction for Iowa renters, allowing individuals to subtract gross rent paid for their primary home (including manufactured/mobile homes) from their individual income tax. It directly affects renters who use a dwelling as their main residence, covering rent for the home itself and up to one acre of land for manufactured homes. The deduction applies to rent paid at arm's length for occupancy, with "homestead" defined as a rented primary residence. The provision takes effect for tax years beginning January 1, 2026.

Topics ✓ Budget & TaxesSupports Budget & TaxesProvides tax deduction for renters, reducing taxable income for primary residence renters - direct tax relief for middle/lower income.95% confidence ✓ HousingSupports HousingCreates tax deduction for renters, reducing tax burden on primary residence rent, increasing affordability for low-income households.95% confidence

Sub-Topics Income Tax Property Taxes Renters Tenant Rights

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in committee · Iowa · Senate Feb 19, 2025

SSB 1119: A bill for an act creating a deduction available against the individual income tax for educational expenses at institutions of higher education for career-related programs and apprenticeship programs, and including retroactive applicability provisions.

This bill creates a new deduction for Iowa individual income tax filers covering expenses for career-focused education and apprenticeships. It allows deductions for tuition, fees, books, supplies, and equipment paid for: (1) non-college-credit career programs at qualifying institutions (like community colleges or state-regent schools), and (2) registered Iowa apprenticeship programs. Payments from education savings plans do not qualify, and the deduction applies retroactively to tax years starting January 1, 2025.

Topics ✓ Budget & TaxesSupports Budget & TaxesCreates tax deduction for career education expenses, reducing individual tax burden. Direct tax relief aligns with support indicators for middle-income education access.95% confidence ✓ EducationSupports EducationCreates tax deduction for career education/apprenticeship expenses, expanding access to higher education programs and reducing financial barriers for students.95% confidence

Sub-Topics Income Tax Career & Technical Education

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