A bill for an act relating to the adoption tax credit available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 965 .)

House

File

1026

-

Introduced

HOUSE

FILE

1026

BY

COMMITTEE

ON

WAYS

AND

MEANS

(SUCCESSOR

TO

HF

965)

A

BILL

FOR

An

Act

relating

to

the

adoption

tax

credit

available

against

1

the

individual

income

tax,

and

including

effective

date

and

2

retroactive

applicability

provisions.

3

BE

IT

ENACTED

BY

THE

GENERAL

ASSEMBLY

OF

THE

STATE

OF

IOWA:

4

TLSB

1903HV

(1)

91

jm/jh

H.F.

1026

Section

1.

Section

422.12A,

subsection

2,

Code

2025,

is

1

amended

to

read

as

follows:

2

2.

The

taxes

imposed

under

this

subchapter

,

less

the

3

credits

allowed

under

section

422.12

,

shall

be

reduced

by

an

4

adoption

tax

credit

equal

to

the

amount

of

qualified

adoption

5

expenses

paid

or

incurred

by

the

taxpayer

in

connection

with

6

the

adoption

of

a

child

by

the

taxpayer,

not

to

exceed

five

7

twenty

thousand

dollars

per

adoption.

8

Sec.

2.

EFFECTIVE

DATE.

This

Act,

being

deemed

of

immediate

9

importance,

takes

effect

upon

enactment.

10

Sec.

3.

RETROACTIVE

APPLICABILITY.

This

Act

applies

11

retroactively

to

January

1,

2024,

for

tax

years

beginning

on

or

12

after

that

date

if

the

adoption

becomes

final

on

or

after

that

13

date.

14

EXPLANATION

15

The

inclusion

of

this

explanation

does

not

constitute

agreement

with

16

the

explanation’s

substance

by

the

members

of

the

general

assembly.

17

This

bill

relates

to

the

adoption

tax

credit

available

18

against

the

individual

income

tax.

19

Currently,

the

tax

credit

equals

up

to

$5,000

of

qualified

20

adoption

expenses

per

adoption.

The

bill

increases

the

tax

21

credit

to

equal

up

to

$20,000

of

qualified

adoption

expenses

22

per

adoption.

Any

credit

in

excess

of

the

tax

liability

is

23

refundable.

24

“Qualified

adoption

expenses”

means

unreimbursed

expenses

25

paid

or

incurred

in

connection

with

the

adoption

of

a

child,

26

including

medical

and

hospital

expenses

of

the

biological

27

mother

which

are

incident

to

the

child’s

birth,

welfare

agency

28

fees,

legal

fees,

and

all

other

fees

and

costs

which

relate

to

29

the

adoption

of

a

child.

30

“Child”

means

an

individual

under

18

years

of

age.

31

Current

law

in

Code

section

422.12A(4)

determines

the

tax

32

year

when

qualified

adoption

expenses

are

allowed.

33

The

bill

takes

effect

upon

enactment

and

applies

34

retroactively

to

tax

years

beginning

on

or

after

January

1,

35

-1-

LSB

1903HV

(1)

91

jm/jh

1/

2

H.F.

1026

2024,

for

adoptions

finalized

on

or

after

that

date.

1

-2-

LSB

1903HV

(1)

91

jm/jh

2/

2