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Bill > HF1020
IA HF1020
IA HF1020A bill for an act modifying the child and dependent care credit available against the individual income tax, and including retroactive applicability provisions.(Formerly HF 962.)
summary
Introduced
04/17/2025
04/17/2025
In Committee
04/23/2025
04/23/2025
Crossed Over
04/23/2025
04/23/2025
Passed
Dead
Introduced Session
91st General Assembly
Bill Summary
This bill relates to the Iowa child and dependent care credit available against the individual income tax. The Iowa child and dependent care credit is a refundable credit calculated as a percentage of the federal child and dependent care credit, depending on the Iowa net income of the taxpayer. Currently, there are seven graduated Iowa net income thresholds used to calculate the credit. The bill reduces the number of Iowa net income thresholds from seven thresholds to four thresholds, and removes the maximum Iowa net income threshold amount used by the taxpayer to calculate the Iowa child and dependent care tax credit. By removing the maximum Iowa net income threshold amount for eligibility purposes ($90,000), any taxpayer with Iowa net income equal to or exceeding $25,000 is eligible to use 50 percent of the federal child and dependent care credit as a refundable credit against the Iowa individual income tax, regardless of whether the taxpayer’s federal credit is limited by the taxpayer’s federal tax liability. The bill applies retroactively to tax years beginning on or after January 1, 2025.
AI Summary
This bill modifies the Iowa child and dependent care tax credit by simplifying the income thresholds and expanding eligibility. Currently, the credit is calculated as a percentage of the federal child and dependent care credit based on the taxpayer's net income, with seven different income brackets. The proposed changes reduce the number of income thresholds from seven to four, and importantly, remove the maximum income threshold of $90,000. Under the new provisions, any taxpayer with an Iowa net income of $25,000 or more will be eligible to claim 50 percent of the federal child and dependent care credit as a refundable credit against Iowa individual income tax, regardless of their federal tax liability. Specifically, the bill eliminates the lower percentage tiers for different income ranges and establishes a flat 50 percent credit for taxpayers with net income of $25,000 and above. The bill is designed to be retroactively applied to tax years beginning on or after January 1, 2025, which means taxpayers can benefit from these changes for the 2025 tax year and onwards.
Committee Categories
Budget and Finance
Sponsors (0)
No sponsors listed
Other Sponsors (1)
Ways and Means (House)
Last Action
Subcommittee: Rowley, Bisignano, and Dawson. S.J. 916. (on 04/28/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF1020 |
| Fiscal Note - Child and Dependent Care Tax Credit, Amount | https://www.legis.iowa.gov/docs/publications/FN/1526230.pdf |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/HF1020.html |
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