Iowa 2023-2024 Regular Session

Iowa House Bill HF2160

Introduced
1/25/24  
Introduced
1/25/24  

Caption

A bill for an act excluding from the individual income tax certain direct trustee-to-trustee transfers from educational savings plan trust accounts to Roth individual retirement accounts, and including retroactive applicability provisions.

Impact

By exempting these specific transfers from state income taxation, HF2160 is expected to influence state tax revenues, potentially reducing the funds available for state services depending on the volume of these transfers. The retroactive applicability of the bill to January 1, 2024, means that any transfers occurring after this date will benefit from the exemption. Proponents assert that this could enhance residents' financial flexibility, encouraging contributions to educational savings plans while also supporting long-term retirement savings through Roth IRAs.

Summary

House File 2160 aims to provide tax exemptions for certain financial transfers, specifically directing attention to trustee-to-trustee transfers from 529 educational savings plans to Roth individual retirement accounts (IRAs). This bill is framed within the context of the federal Consolidated Appropriations Act of 2023, which allows such transfers to be free from federal taxation, contingent on certain conditions being met. HF2160 mirrors this federal provision, extending the tax exemption to state-level income tax laws, thereby offering residents a financial incentive to use educational savings for retirement purposes.

Contention

While supporters herald this bill as a significant step toward financial autonomy for families saving for education and retirement, there could be points of contention, particularly regarding the potential loss of tax revenue for the state. Critics might argue that, while the bill provides immediate tax relief for individuals, it could jeopardize funding for public services that rely on income tax contributions. Overall, the discussion surrounding HF2160 reflects broader debates about fiscal policy, state support for education, and the responsibilities of state versus individual financial planning.

Companion Bills

No companion bills found.

Previously Filed As

IA HF2537

A bill for an act relating to the treasurer of state's duties, including Iowa educational savings plan trust and Iowa ABLE savings plan trust requirements and disposition of unclaimed property, and including retroactive applicability provisions.(Formerly HSB 626; See HF 2667.)

IA HF284

A bill for an act relating to the Iowa educational savings plan trust by excluding from the computation of net income for the individual income tax withdrawals for the payment of qualified education expenses for private instruction, and including retroactive applicability provisions.

IA HF2638

A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(Formerly HF 2105.)

IA HF2667

A bill for an act relating to the treasurer of state's duties, including Iowa educational savings plan trust and Iowa ABLE savings plan trust requirements and disposition of unclaimed property, and including retroactive applicability provisions. (Formerly HF 2537, HSB 626.) Effective date: 07/01/2024. Applicability date: 01/01/2024.

IA SF2236

A bill for an act relating to the treasurer of state's duties, including Iowa educational savings plan trust and Iowa ABLE savings plan trust requirements and disposition of unclaimed property, and including effective date and retroactive applicability provisions.(Formerly SSB 3116.)

IA SSB3116

A bill for an act relating to the treasurer of state's duties, including Iowa educational savings plan trust and Iowa ABLE savings plan trust requirements and disposition of unclaimed property, and including effective date and retroactive applicability provisions.(See SF 2236.)

IA HSB626

A bill for an act relating to the treasurer of state's duties, including Iowa educational savings plan trust and Iowa ABLE savings plan trust requirements and disposition of unclaimed property, and including effective date and retroactive applicability provisions.(See HF 2537, HF 2667.)

IA HF2105

A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(See HF 2638.)

IA SF552

A bill for an act relating to individual and corporate income taxes, the insurance premium tax, and including the contingent repeal of the individual income tax, and including retroactive applicability and effective date provisions.(Formerly SSB 1126.)

IA SF2259

A bill for an act relating to the Iowa educational savings plan trust by expanding the definition of qualified educational expenses and apprenticeship programs for purposes of withdrawals qualifying for an individual income tax exclusion, and including retroactive applicability provisions.(Formerly SSB 3128; See SF 2440.)

Similar Bills

No similar bills found.