Iowa 2025-2026 Regular Session

Iowa House Bill HF962

Introduced
3/17/25  

Caption

A bill for an act modifying the child and dependent care credit available against the individual income tax, and including retroactive applicability provisions.(See HF 1020.)

Impact

This legislative change represents a significant shift in Iowa's tax policy concerning child and dependent care support. By lowering the barriers for income eligibility, the bill seeks to broaden access to tax relief for a more extensive range of households with dependents. The retroactive applicability clause means that these changes would take effect for tax years beginning January 1, 2025, potentially impacting tax planning and financial support for families earlier than initially expected.

Summary

House File 962, introduced in the Iowa General Assembly, aims to modify the existing child and dependent care credit available against individual income tax. The bill reduces the number of income thresholds utilized in calculating this credit from seven to four, simplifying the credit structure for taxpayers. Importantly, it also removes the maximum income threshold limit of $90,000 for eligibility, ensuring that taxpayers with an income starting at $25,000 can qualify for a refundable credit equivalent to 50% of the federal child and dependent care credit, regardless of their federal tax liability.

Contention

Proponents of the bill argue that these changes will provide much-needed support to working families, easing the financial burden associated with child care expenses. However, critics may raise concerns regarding the fiscal implications of expanding the credit in terms of state revenue. The debate surrounding child care support is often linked to larger discussions about economic equity, with differing opinions on how best to balance tax policy with support for families in need.

Companion Bills

IA HF1020

Similar To A bill for an act modifying the child and dependent care credit available against the individual income tax, and including retroactive applicability provisions.(Formerly HF 962.)

Similar Bills

LA SB143

Provides for the transfer, deposit, and use of monies among state funds. (7/1/18) (EG INCREASE GF RV See Note)

LA HB379

Provides for the transfer, deposit, and use of certain treasury funds (EG SEE FISC NOTE GF RV See Note)

NM SB48

Gen Appropriations And Auth Expenditures

NM SB1

Appropriations & Expenditures

NM SB192

Additional Appropriations & Confidentiality

CA AB1420

Cannabis: licensing fees.

MO SB3

Modifies provisions relating to taxation

CA AB1172

Escrow agents: asset and accounting requirements.