SF 432: Providing a deduction from the individual income tax for the amount of interest paid on a qualified education loan and including retroactive applicability provisions

Died when the session ended · The 2022 session adjourned on May 24, 2022, the General Assembly’s last regular session. Bills that didn’t pass both chambers died.

What it does

This bill relates to the deduction of student loan interest for purposes of the individual income tax. Under current law for federal income tax purposes and Iowa income tax purposes, an individual is allowed to deduct up to $2,500 of interest paid on a qualified education loan (section 221 of the Internal Revenue Code). However, this deduction is gradually phased out for individuals with income in excess of $70,000 ($140,000 for a married couple filing a joint return), and is completely phased out for individuals with income of $85,000 or more ($170,000 for a married couple filing a joint return).

Cost

Less revenue: up to $750,000

5 million per fiscal year, beginning FY 2022. Fiscal Note Fiscal Services Division 2 The expanded income tax exemption will also reduce the annual amount of revenue raised by the local option income surtax for schools by $750,000, beginning FY 2022.

Senate subcommittee · named February 24, 2021

Sen. Amy Sinclair (R) · amy.sinclair@legis.iowa.gov
Sen. Dan Dawson (R) · dan.dawson@legis.iowa.gov
Sen. William A. Dotzler Jr. (D) · bill.dotzler@legis.iowa.gov

Lobbying · 3 for, 0 against

For: Iowa Athletic Trainers Society; Iowa Dental Association; Iowa Veterinary Medical Association

In plain words

February 22, 2021Filed in the Senate and sent to the Ways and Means committee
February 24, 2021Senate subcommittee named: Sinclair, Dawson and Dotzler
March 11, 2021Subcommittee recommended passing it
March 17, 2021Cost estimate (fiscal note) posted