Creating a private instruction organization tax credit available against the individual and corporate income taxes, and including effective date and retroactive applicability provisions

This bill provides an individual and corporate income tax credit equal to a maximum percent of the voluntary contributions made to a private instruction organization that is exempt from federal income tax. At least percent of total contributions must be used by the private instruction organization to provide grants to students who are members of households that have total annual income that does not exceed four times the most recently published federal poverty guidelines. The contribution may not be deducted as a charitable deduction for state tax purposes or be designated for the direct benefit of a dependent or any other student designated by the taxpayer. The private instruction organization must limit the grants to students who reside in Iowa, must provide grants without limiting the type of private instruction received, and only provide grants to students in a certain geographic area. The tax credit is claimed by attaching a tax credit certificate to the taxpayer’s tax return. A private instruction organization is authorized to issue a tax credit certificate in an amount determined by the department. The amount available for each private instruction organization is determined by multiplying the maximum total value of tax credits available for the calendar year with the ratio of the number of households submitting a participation form to the department of revenue for a particular private instruction organization to the total participation forms submitted. Each household that receives funds from a private instruction organization must submit a participation form to the department of revenue.11S, except for calendar year 2021, the maximum amount available shall be one-half of the amount available for school tuition organizations. The private instruction organization must report to the department of revenue by January of each calendar year the members of the governing board, the total dollar value of contributions received and the total dollar value of tax credits approved, a list of donors, the total number of students receiving grants for the school year, the name and address of each household utilizing the grants, and the name of the person providing private instruction and the number of eligible students receiving private instruction by the person. The bill takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2021.