Bill Text: IA SF214 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to the establishment of a new deduction for any income of an employee resulting from the payment by an employer on the employee's qualified education loan and including effective date and retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-02-25 - Fiscal note. [SF214 Detail]
Download: Iowa-2019-SF214-Introduced.html
Senate
File
214
-
Introduced
SENATE
FILE
214
BY
SCHNEIDER
A
BILL
FOR
An
Act
relating
to
the
establishment
of
a
new
deduction
for
1
any
income
of
an
employee
resulting
from
the
payment
by
an
2
employer
on
the
employee’s
qualified
education
loan
and
3
including
effective
date
and
retroactive
applicability
4
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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214
Section
1.
Section
422.7,
Code
2019,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
19.
a.
Subtract,
to
the
extent
included,
3
income
resulting
from
the
payment
by
an
employer
of
the
4
taxpayer,
whether
paid
to
the
taxpayer
or
to
a
lender,
of
5
principal
or
interest
on
any
qualified
education
loan
incurred
6
by
the
taxpayer,
if
such
qualified
education
loan
was
incurred
7
by
the
taxpayer.
8
b.
If
the
taxpayer
has
a
deduction
in
computing
federal
9
taxable
income
under
section
221
of
the
Internal
Revenue
Code
10
for
interest
on
a
qualified
education
loan,
the
taxpayer
shall
11
recompute
for
purposes
of
this
subsection
the
amount
of
the
12
deduction
under
paragraph
“a”
by
not
subtracting
any
amount
of
13
income
resulting
from
the
employer’s
payment
of
interest
on
a
14
qualified
education
loan
that
was
also
deducted
by
the
taxpayer
15
under
section
221
of
the
Internal
Revenue
Code.
16
c.
For
purposes
of
this
subsection,
“qualified
education
17
loan”
means
the
same
as
defined
in
section
221
of
the
Internal
18
Revenue
Code.
19
Sec.
2.
2018
Iowa
Acts,
chapter
1161,
section
112,
is
20
amended
by
striking
the
section
and
inserting
in
lieu
thereof
21
the
following:
22
SEC.
112.
Section
422.7,
Code
2018,
is
amended
by
adding
the
23
following
new
subsection:
24
NEW
SUBSECTION
.
18.
Add,
to
the
extent
deducted
for
federal
25
tax
purposes,
charitable
contributions
under
section
170
of
26
the
Internal
Revenue
Code
to
the
extent
such
contribution
was
27
made
to
an
organization
for
the
purpose
of
deposit
in
the
Iowa
28
education
savings
plan
trust
established
in
chapter
12D
,
and
29
the
taxpayer
designated
that
any
part
of
the
contribution
be
30
used
for
the
direct
benefit
of
any
dependent
of
the
taxpayer
or
31
any
other
single
beneficiary
designated
by
the
taxpayer.
32
Sec.
3.
EFFECTIVE
DATE.
The
following,
being
deemed
of
33
immediate
importance,
takes
effect
upon
enactment:
34
The
section
of
this
Act
enacting
section
422.7,
subsection
35
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19.
1
Sec.
4.
RETROACTIVE
APPLICABILITY.
The
following
applies
2
retroactively
to
January
1,
2019,
for
tax
years
beginning
on
or
3
after
that
date
for
payments
made
by
an
employer
of
principal
4
or
interest
on
a
qualified
education
loan:
5
The
section
of
this
Act
enacting
section
422.7,
subsection
6
19.
7
EXPLANATION
8
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
9
the
explanation’s
substance
by
the
members
of
the
general
assembly.
10
This
bill
changes
the
effective
date
for
a
new
deduction
11
for
any
income
of
an
employee
resulting
from
the
payment
by
12
an
employer,
whether
paid
to
the
employee
or
a
lender,
of
13
principal
or
interest
on
the
employee’s
qualified
education
14
loan.
Currently,
the
new
deduction
is
set
to
begin
in
tax
year
15
2023
or
in
a
later
tax
year,
contingent
upon
the
satisfaction
16
of
certain
net
general
fund
revenue
amount
and
growth
targets.
17
The
bill
moves
up
the
effective
date
for
this
new
deduction
18
to
tax
years
beginning
on
or
after
January
1,
2019.
In
order
19
to
move
up
the
effective
date
for
the
new
deduction,
the
bill
20
strikes
2018
Iowa
Acts,
chapter
1161,
section
112.
However,
21
there
is
an
unrelated
provision
to
the
new
deduction
in
2018
22
Iowa
Acts,
chapter
1161,
section
112,
thus
the
bill
reinserts
23
the
unrelated
provision
in
order
to
preserve
this
provision.
24
Federal
income
tax
law
does
provide
a
limited
deduction
for
25
a
taxpayer’s
payment
of
interest
on
qualified
education
loans,
26
and
the
bill
disallows
the
new
Iowa
deduction
for
any
amount
27
of
income
that
represents
an
interest
payment
that
was
also
28
deducted
by
the
employee
in
computing
federal
taxable
income.
29
The
bill
defines
“qualified
education
loan”
to
mean
the
same
30
as
defined
in
section
221
of
the
Internal
Revenue
Code.
31
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