Bill Text: IA SSB3150 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act providing an individual income tax deduction for income resulting from the payment by an employer of principal or interest on a qualified educational loan of a taxpayer, and including applicability provisions.
Spectrum: Committee Bill
Status: (N/A - Dead) 2018-02-06 - Subcommittee: Feenstra, Behn, and Quirmbach. [SSB3150 Detail]
Download: Iowa-2017-SSB3150-Introduced.html
Senate
Study
Bill
3150
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WAYS
AND
MEANS
BILL
BY
CHAIRPERSON
FEENSTRA)
A
BILL
FOR
An
Act
providing
an
individual
income
tax
deduction
for
income
1
resulting
from
the
payment
by
an
employer
of
principal
or
2
interest
on
a
qualified
educational
loan
of
a
taxpayer,
and
3
including
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
Section
422.7,
Code
2018,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
6.
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
educational
loan
6
incurred
by
the
taxpayer.
7
b.
If
the
taxpayer
has
a
deduction
in
computing
federal
8
adjusted
gross
income
under
section
221
of
the
Internal
Revenue
9
Code
for
interest
on
a
qualified
educational
loan,
the
taxpayer
10
shall
recompute
for
purposes
of
this
subsection
the
amount
of
11
the
deduction
under
paragraph
“a”
by
not
subtracting
any
amount
12
of
income
resulting
from
the
employer’s
payment
of
interest
13
on
a
qualified
educational
loan
that
was
also
deducted
by
the
14
taxpayer
under
section
221
of
the
Internal
Revenue
Code.
15
c.
For
purposes
of
this
subsection,
“qualified
educational
16
loan”
means
the
same
as
defined
in
section
221
of
the
Internal
17
Revenue
Code.
18
Sec.
2.
APPLICABILITY.
This
Act
applies
to
tax
years
19
beginning
on
or
after
January
1,
2019.
20
EXPLANATION
21
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
22
the
explanation’s
substance
by
the
members
of
the
general
assembly.
23
Under
current
law,
for
federal
income
tax
purposes
and
24
Iowa
income
tax
purposes,
the
payment
by
an
employer
of
an
25
employee’s
principal
or
interest
on
a
qualified
educational
26
loan
may
result
in
taxable
income
to
the
employee.
27
This
bill
provides
a
deduction
from
the
computation
of
28
net
income
for
purposes
of
the
Iowa
individual
income
tax
29
for
any
income
of
an
employee
resulting
from
the
payment
by
30
an
employer,
whether
paid
to
the
employee
or
to
a
lender,
of
31
principal
or
interest
on
the
employee’s
qualified
educational
32
loan.
33
Federal
income
tax
law
does
provide
a
limited
deduction
for
a
34
taxpayer’s
payment
of
interest
on
qualified
educational
loans,
35
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and
the
bill
disallows
the
deduction
provided
in
the
bill
for
1
any
amount
of
income
that
represents
an
interest
payment
that
2
was
also
deducted
by
the
employee
in
computing
federal
adjusted
3
gross
income.
4
The
terms
“qualified
educational
loan”
is
defined
to
mean
5
the
same
as
it
does
under
the
Internal
Revenue
Code,
and
6
generally
includes
debt
incurred
on
behalf
of
a
taxpayer,
or
a
7
taxpayer’s
spouse
or
dependent,
to
pay
expenses
of
attending
8
institutions
of
higher
education
participating
in
the
federal
9
student
financial
aid
programs.
10
The
bill
applies
to
tax
years
beginning
on
or
after
January
11
1,
2019.
12
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