This bill changes Iowa's funding rules for school programs supporting at-risk students, alternative school attendees, and dropout prevention. It raises the maximum allowable funding ratio (from 2.5% to 5% of a district's regular program costs) for these programs starting in 2026, but only if approved by voters in a school district election. If approved, the ratio can increase by no more than 0.25% per year. School boards must follow specific voter approval procedures to implement the higher funding limit. The change directly affects school districts seeking to expand these student support programs beyond current funding caps.
This bill reorganizes Iowa's economic development tax credit programs. It creates five new programs (business incentives for growth, seed investor credits, film production incentives, R&D credits, and sustainable aviation fuel credits) while eliminating seven existing ones (including high quality jobs and employer childcare credits). The bill sets a $170 million annual limit for most tax credits, with specific allocations like $68 million for high quality jobs (though this program is being eliminated), $40 million for R&D credits, and $50 million for the new business incentives program. It also requires the Economic Development Authority to report annual credit allocations to the Department of Revenue.
This bill creates Iowa's "Catastrophic Savings Account Act," allowing residents to deduct contributions to special savings accounts from their state income taxes. Account holders can deduct contributions up to specific lifetime limits based on their homeowner insurance premiums (e.g., $2,000 for low-premium policies, $15,000 or twice premiums for higher ones, or $350,000 for self-insured homeowners). Withdrawals for non-qualified purposes (like general expenses) trigger a 2.5% penalty or require adding the amount back to taxable income. The accounts specifically cover costs related to qualifying disasters (e.g., floods, windstorms) or insurance deductibles, with special rules for death, homestead sales, or changing financial institutions.
This bill requires Iowa to withhold state income tax on sports wagering winnings whenever federal income tax is withheld (typically for winnings over $600). It treats sports wagering winnings as taxable income, applying to bettors who win above the federal threshold. The law takes effect January 1, 2026, aligning Iowa's tax withholding process with federal gambling tax rules.
SSB 1194 establishes two new state funds to improve financial education and combat financial exploitation. It redirects $10 from each $40 insurance agent registration fee into these funds - $5 for public financial literacy programs and $5 for prevention initiatives targeting vulnerable individuals. The bill also allows transfers from the commerce revolving fund and civil penalties to support these efforts, with funds used for public education, victim assistance, and investigations. These changes directly affect Iowans through expanded access to financial education resources and enhanced protections against financial exploitation.
HF 910 provides Iowa disabled veterans with a 100% service-connected disability rating (certified by the U.S. Department of Veterans Affairs) with two key benefits: (1) exemption from vehicle title fees and annual registration fees for up to three vehicles, including free standard license plates; and (2) a property tax credit equal to the full property tax owed on their primary residence. The bill also allows the state to waive administrative vehicle fees for qualifying veterans and creates a confidential tax credit program requiring county auditors to certify claims annually. Funds for the tax credit are allocated from the state general fund and distributed to taxing districts based on their share of property taxes. These provisions directly affect eligible Iowa veterans, aiming to reduce their costs for vehicle ownership and housing.
HF 171 removes a $7 million annual cap on real estate transfer tax funds allocated to Iowa's Housing Trust Fund (HTF). Currently, 30% of these tax receipts must be sent to the HTF, but any amount exceeding $7 million annually is redirected to the general fund. This bill eliminates that $7 million limit, allowing all 30% of eligible tax receipts to flow directly into the HTF each year. The HTF supports affordable housing development and preservation for low-income Iowans and the Iowa Mortgage Help Initiative.
HF 60 would allow Iowa school districts impacted by federally or state-declared natural disasters to receive an additional year of budget adjustment funding. Specifically, if a disaster occurred in the base year or the year before, districts would get a second adjustment equal to the amount they received in their base year. This applies to districts already eligible for standard budget adjustments under existing law. The bill directly affects school districts in Iowa that experience qualifying natural disasters with official disaster declarations. (Note: The bill was withdrawn on March 14, 2025, and did not become law.)
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.
HF 211 creates a new tax credit for individuals and corporations that install radon mitigation systems in buildings. The credit is equal to the cost of purchasing and installing the system, up to a maximum of $1,000, and can be applied against state individual and corporate income taxes. Any portion of the credit that exceeds a taxpayer's liability for the year is not refundable but can be carried over to the next tax year. This bill applies retroactively to tax years beginning on or after January 1, 2025.
