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House
File
31
-
Introduced
HOUSE
FILE
31
BY
LOHSE
A
BILL
FOR
An
Act
creating
the
new
resident
and
new
graduate
tax
credits,
1
available
against
the
individual
income
tax,
and
including
2
retroactive
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
NEW
SECTION
.
422.12Q
New
resident
tax
credit.
1
1.
a.
For
purposes
of
this
section,
“new
resident”
means
an
2
individual
who
became
a
resident
of
Iowa
upon
taking
full-time
3
employment
in
this
state,
who
remains
a
resident
of
and
4
employed
full-time
in
this
state
while
claiming
the
credit,
and
5
who
has
not
been
a
resident
of
this
state
at
any
time
during
the
6
previous
twelve-month
period
prior
to
establishing
residency
7
in
this
state.
8
b.
For
purposes
of
this
section,
“public
assistance”
means
9
the
supplemental
nutrition
assistance
program,
the
Medicaid
10
program,
or
the
family
investment
program.
11
2.
a.
The
taxes
imposed
under
this
division
less
the
12
credits
allowed
under
section
422.12
shall
be
reduced
by
a
new
13
resident
tax
credit
equal
to
one
hundred
percent
of
the
taxes
14
imposed
in
a
tax
year
for
up
to
four
consecutive
tax
years.
15
b.
An
individual
may
claim
the
credit
during
either
the
16
first
or
second
tax
year
of
residency,
and
shall
take
the
17
credit
consecutively
every
tax
year
thereafter
as
provided
in
18
paragraph
“a”
.
19
c.
An
individual
is
eligible
to
take
the
credit
one
time
in
20
the
individual’s
lifetime.
If
an
individual
is
unable
to
claim
21
the
credit
in
consecutive
tax
years,
the
individual
shall
be
22
ineligible
to
claim
the
credit
in
a
future
tax
year.
23
3.
Any
new
resident
tax
credit
in
excess
of
the
tax
24
liability
is
not
refundable.
25
4.
An
individual
claiming
the
credit
may
claim
an
exemption
26
from
withholding
on
the
state
W-4
form.
27
5.
Married
taxpayers
electing
to
file
separate
returns
may
28
avail
themselves
of
the
new
resident
tax
credit
by
allocating
29
the
new
resident
tax
credit
to
each
spouse
in
the
proportion
30
that
each
spouse’s
respective
earned
income
bears
to
the
total
31
combined
earned
income.
32
6.
An
individual
shall
not
be
eligible
to
claim
the
credit
33
if
the
person
is
receiving
public
assistance
after
the
first
34
tax
year
the
credit
is
claimed.
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Sec.
2.
NEW
SECTION
.
422.12R
New
graduate
tax
credit.
1
1.
a.
For
purposes
of
this
section,
“new
graduate”
means
2
an
individual
who
is
a
recent
graduate
from
an
Iowa-based
3
community
college,
college,
university,
or
an
apprenticeship
4
program
as
defined
in
section
84E.2,
who
is
a
resident
of
and
5
employed
in
this
state,
and
who
is
thirty
years
of
age
or
less
6
during
the
first
tax
year
when
claiming
the
tax
credit.
7
b.
For
purposes
of
this
section,
“public
assistance”
means
8
the
supplemental
nutrition
assistance
program,
the
Medicaid
9
program,
or
the
family
investment
program.
10
2.
a.
The
taxes
imposed
under
this
division
less
the
11
credits
allowed
under
section
422.12
shall
be
reduced
by
a
new
12
graduate
tax
credit
equal
to
one
hundred
percent
of
the
taxes
13
imposed
in
a
tax
year
for
up
to
four
consecutive
tax
years.
14
b.
An
individual
may
claim
the
tax
credit
during
either
the
15
first
or
second
tax
year
after
graduation,
and
shall
take
the
16
credit
consecutively
every
tax
year
thereafter
as
provided
in
17
paragraph
“a”
.
18
c.
An
individual
is
eligible
to
take
the
credit
one
time
in
19
the
individual’s
lifetime.
If
an
individual
is
unable
to
claim
20
the
credit
in
consecutive
tax
years,
the
individual
shall
be
21
ineligible
to
claim
the
credit
in
a
future
tax
year.
22
3.
Any
new
graduate
tax
credit
in
excess
of
the
tax
23
liability
is
not
refundable.
24
4.
An
individual
claiming
the
credit
may
claim
an
exemption
25
from
withholding
on
the
state
W-4
form.
26
5.
Married
taxpayers
electing
to
file
separate
returns
may
27
avail
themselves
of
the
new
graduate
tax
credit
by
allocating
28
the
new
graduate
tax
credit
to
each
spouse
in
the
proportion
29
that
each
spouse’s
respective
earned
income
bears
to
the
total
30
combined
earned
income.
31
6.
An
individual
shall
not
be
eligible
to
claim
the
credit
32
if
the
person
is
receiving
public
assistance
after
the
first
33
tax
year
the
credit
is
claimed.
34
Sec.
3.
CONTINGENT
FUTURE
REPEAL
——
CODE
EDITOR
DIRECTIVE
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——
APPLICABILITY
AFTER
REPEAL.
1
1.
Sections
422.12Q
and
422.12R
are
repealed
January
1
2
following
the
occurrence
of
the
statewide
average
annual
3
unemployment
rate
equaling
or
exceeding
four
percent
for
three
4
consecutive
calendar
years
as
calculated
by
the
United
States
5
department
of
labor,
bureau
of
labor
statistics,
beginning
6
with
calendar
year
2025.
The
director
of
the
department
of
7
workforce
development
or
the
director’s
designee
shall
notify
8
the
Code
editor
when
the
annual
statewide
unemployment
rate
9
exceeds
four
percent
for
three
consecutive
calendar
years
as
10
set
forth
in
this
subsection.
11
2.
If
the
Code
editor
is
notified
by
the
director
of
the
12
department
of
workforce
development
or
the
director’s
designee
13
that
the
condition
in
subsection
1
has
been
satisfied,
the
Code
14
editor
is
directed
to
remove
sections
422.12Q
and
422.12R
from
15
the
Code.
16
3.
A
taxpayer
claiming
the
tax
credit
in
section
422.12Q
or
17
422.12R
prior
to
repeal
pursuant
to
subsection
2
is
eligible
18
to
claim
the
credit
after
the
repeal
up
to
any
remaining
tax
19
years
the
taxpayer
would
have
been
eligible
to
claim
prior
to
20
the
repeal,
as
long
as
the
taxpayer
remains
eligible
to
claim
21
the
credit
under
the
law
prior
to
repeal.
22
Sec.
4.
RETROACTIVE
APPLICABILITY.
This
Act
applies
23
retroactively
to
January
1,
2025,
for
tax
years
beginning
on
24
or
after
that
date.
25
EXPLANATION
26
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
27
the
explanation’s
substance
by
the
members
of
the
general
assembly.
28
This
bill
creates
the
new
resident
and
new
graduate
tax
29
credits,
which
are
available
against
the
individual
income
tax.
30
The
bill
applies
to
tax
years
beginning
on
or
after
January
1,
31
2025.
32
NEW
RESIDENT
TAX
CREDIT.
The
bill
defines
“new
resident”
to
33
mean
an
individual
who
became
a
resident
of
Iowa
upon
taking
34
full-time
employment
in
this
state,
who
remains
a
resident
of
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and
employed
full-time
in
this
state
while
claiming
the
credit,
1
and
who
has
not
been
a
resident
of
this
state
at
any
time
during
2
the
previous
12-month
period
prior
to
establishing
residency.
3
The
new
resident
tax
credit
authorized
in
the
bill
is
4
available
to
a
new
resident
for
up
to
four
consecutive
tax
5
years
following
the
establishment
of
residency
in
this
state.
6
A
new
resident
may
begin
to
claim
the
credit
during
either
the
7
first
or
second
tax
year
of
residency.
8
The
amount
of
the
credit
is
equal
to
100
percent
of
the
9
income
tax
imposed
in
a
tax
year
for
up
to
four
consecutive
tax
10
years.
11
An
individual
is
eligible
to
claim
the
new
resident
tax
12
credit
one
time
in
the
individual’s
lifetime
for
the
tax
year
13
period
described
in
the
bill.
14
An
individual
claiming
the
new
resident
tax
credit
may
claim
15
an
exemption
from
withholding
on
the
state
W-4
form.
16
Any
new
resident
tax
credit
in
excess
of
tax
liability
is
not
17
refundable.
18
An
individual
is
not
eligible
to
claim
the
credit
if
the
19
person
is
receiving
public
assistance
after
the
first
tax
year
20
the
credit
is
claimed.
The
bill
defines
“public
assistance”
21
to
mean
the
supplemental
nutrition
assistance
program,
the
22
Medicaid
program,
or
the
family
investment
program.
23
NEW
GRADUATE
TAX
CREDIT.
The
bill
defines
“new
graduate”
to
24
mean
an
individual
who
is
a
recent
graduate
from
an
Iowa-based
25
community
college,
college,
university,
or
an
apprenticeship
26
program
as
defined
in
Code
section
84E.2,
who
is
a
resident
of
27
and
employed
in
this
state,
and
who
is
30
years
of
age
or
less
28
during
the
first
tax
year
when
claiming
the
tax
credit.
29
The
new
graduate
tax
credit
authorized
in
the
bill
is
30
available
to
a
new
graduate
for
up
to
four
consecutive
tax
31
years
following
graduation.
A
new
graduate
may
begin
to
claim
32
the
credit
during
either
the
first
or
second
tax
year
after
33
graduation.
34
The
amount
of
the
credit
is
equal
to
100
percent
of
the
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income
tax
imposed
in
a
tax
year
for
up
to
four
consecutive
tax
1
years.
2
An
individual
is
eligible
to
claim
the
new
graduate
tax
3
credit
one
time
in
the
individual’s
lifetime
for
the
tax
year
4
period
described
in
the
bill.
5
An
individual
claiming
the
new
graduate
tax
credit
may
claim
6
an
exemption
from
withholding
on
the
state
W-4
form.
7
Any
new
graduate
tax
credit
in
excess
of
tax
liability
is
not
8
refundable.
9
An
individual
is
not
eligible
to
claim
the
credit
if
the
10
person
is
receiving
public
assistance
after
the
first
tax
year
11
the
credit
is
claimed.
The
bill
defines
“public
assistance”
12
to
mean
the
supplemental
nutrition
assistance
program,
the
13
Medicaid
program,
or
the
family
investment
program.
14
CONTINGENT
FUTURE
REPEAL
——
CODE
EDITOR
DIRECTIVE
——
15
APPLICABILITY
AFTER
REPEAL.
The
bill
repeals
the
new
resident
16
tax
credit
and
the
new
graduate
tax
credit
January
1
following
17
the
occurrence
of
the
statewide
average
annual
unemployment
18
rate
equaling
or
exceeding
4
percent
for
three
consecutive
19
calendar
years
as
calculated
by
the
United
States
department
of
20
labor,
bureau
of
labor
statistics,
beginning
with
calendar
year
21
2025.
The
director
of
the
department
of
workforce
development
22
or
the
director’s
designee
shall
notify
the
Code
editor
when
23
the
annual
statewide
unemployment
rate
exceeds
4
percent
for
24
three
consecutive
calendar
years.
25
If
the
Code
editor
receives
notification
under
the
bill,
the
26
Code
editor
is
directed
to
remove
the
tax
credits.
27
A
taxpayer
claiming
a
tax
credit
prior
to
repeal
under
the
28
bill
is
eligible
to
claim
the
credit
after
the
repeal
up
to
29
any
remaining
tax
years
the
taxpayer
would
have
been
eligible
30
to
claim
prior
to
the
repeal,
as
long
as
the
taxpayer
remains
31
eligible
to
claim
the
credit
under
the
law
prior
to
repeal.
32
APPLICABILITY.
The
bill
applies
retroactively
to
tax
years
33
beginning
on
or
after
January
1,
2025.
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