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HF 722 – Workforce Development, Programs and Duties (LSB1442HV)
Staff Contact: Evan Johnson (515.281.6301) evan.johnson@legis.iowa.gov
Fiscal Note Version – New
Description
House File 722 has two divisions.
Division I eliminates and modifies various programs and duties under Iowa Workforce
Development (IWD). The Division also transfers certain responsibilities from IWD to the
Department of Education.
Division II modifies the definition of “taxable wages” for purposes of unemployment insurance
taxes on employers to exclude wages paid by Iowa employers to employees who work in
another state if the other state extends reciprocity to Iowa for employment purposes. This
eliminates the taxable wage credit.
Background
Under current law, taxable wages include the wages paid by an Iowa employer to an employee
who works in Iowa and to an employee who works in another state that extends reciprocity to
Iowa for employment purposes. In Iowa, the taxable wage credit applies the wages earned in
another state by an employee to the taxable wage base for that employee in a given year.
Assumptions
• 2.5% of employers in Iowa use the taxable wage credit.
• Federal funding related to unemployment insurance programs will not change.
• The full-time equivalent (FTE) positions associated with the taxable wage credit may be
reassigned to other unemployment insurance activities.
Fiscal Impact
Division I is not anticipated to have a fiscal impact.
Division II is estimated to increase revenue to the Unemployment Compensation Trust Fund by
$394,000 annually due to the elimination of the taxable wage credit. There are 3.0 FTE
positions at an annual cost of $195,000 that administer the taxable wage credit and are paid
from federal funds.
Source
Iowa Workforce Development
/s/ Jennifer Acton
March 17, 2025
Doc ID 1524149
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
www.legis.iowa.gov
Fiscal Note
Fiscal Services Division