Proyectos de ley › 89.ª Asamblea General
Relating to the earned income tax credit available against the individual income tax and including retroactive applicability provisions
Dónde está ahora
- Hecho: Presentado25 de enero de 2022
- Hecho: Subcomité27 de enero de 2022
- Se detuvo: Comité del SenadoMurió al terminar la Asamblea General
- Sigue: Lo aprueba el Senado
- Sigue: Comité de la Cámara
- Sigue: Lo aprueba la Cámara
- Sigue: A gobernador(a)
- Sigue: Firmado como ley
Murió al terminar la sesión La sesión de 2022 terminó el 24 de mayo de 2022, la última sesión ordinaria de la Asamblea General. Los proyectos que no pasaron por ambas cámaras murieron. ¿Qué es el embudo (funnel)?
Qué contiene
Resumen con IA Iowa would increase the amount of money people get back through the state earned income tax credit. The new amount depends on whether a person claims a dependent on their taxes. These changes would apply to tax years starting on or after January 1, 2022. (Todavía no está traducido al español.)1
Lea la explicación oficial (en inglés)
This bill relates to the earned income tax credit available against the individual income tax. Currently, the state earned income tax credit is a refundable tax credit equal to percent of the federal earned income tax credit. The bill increases the state earned income tax credit equal to the following percentage of the federal earned income tax credit: if the taxpayer does not claim a dependent, percent; if the taxpayer claims a dependent, percent. The bill applies retroactively to tax years beginning on or after January 1, 2022.
Senate subcommittee
Named January 27, 2022. It hasn’t reported yet.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Nota fiscal
Resumen con IA This bill increases the State Earned Income Tax Credit for taxpayers with no dependents to 20.0% and for those with one or more dependents to 25.0%. This change is estimated to reduce State General Fund revenue by $6.5 million for fiscal year 2022, $55.6 million for fiscal year 2023, and $47.0 million for fiscal year 2024. For fiscal years beyond fiscal year 2024, the revenue reductions are expected to increase at the rate of growth in Iowa personal income. (en inglés)3
Lea la nota fiscal (en inglés)
Description
Senate File 2104 increases the State Earned Income Tax Credit (EITC), currently equal to 15.0% of the federal credit amount for all taxpayers, to 20.0% for taxpayers with no dependents, and to 25.0% for taxpayers with one or more dependents. The change applies retroactively to tax year (TY) 2022.
Background
The Iowa EITC is a refundable credit based on the federal EITC. If a taxpayer qualifies for the federal credit, the taxpayer also qualifies for the Iowa credit. At the current 15.0% calculation, a taxpayer who qualifies for a $500 federal EITC would qualify for a $75 Iowa EITC. As a refundable credit, the EITC does not impact the calculation of the local option income surtax for schools, if applicable to the taxpayer.
Assumptions
The tax reduction estimate was completed by the Department of Revenue using the individual income tax micromodel developed by the Department. The micromodel is based on income tax returns filed for TY 2020 and is time-adjusted for previously enacted State and federal law changes, as well as personal income and population changes that are projected to occur after the 2020 base tax year.
The micromodel produces tax year results. Since the change is retroactive to the beginning of TY 2022, it is estimated that 15.0% of the TY 2022 impact will occur in FY 2022 and 85.0% will occur in FY 2023. Tax reductions for TY 2023 and after are assumed to occur 40.0% in the fiscal year in which the tax year starts and 60.0% in the following fiscal year.
Fiscal Impact
The increase in the EITC is projected to reduce net individual income tax liability and State General Fund revenue by $6.5 million for FY 2022, $55.6 million for FY 2023, and $47.0 million for FY 2024. For fiscal years beyond FY 2024, the projected net tax liability and State General Fund revenue reductions are expected to increase at the rate of growth in Iowa personal income.
Source
- Department of Revenue
- Earned Income Tax Credit · 17 de febrero de 2022