This bill amends Section 422.7 of the Iowa Code to expand the eligibility for the farm tenancy net income exclusion against individual income tax. It allows net income from farm tenancy agreements earned by entities such as disregarded entities, partnerships, S corporations, trusts, or estates to qualify for the exclusion. This change means that eligible individuals can receive the exclusion for net income derived from these entities in the same way they would if the income were received directly from the farm tenant. Additionally, the bill stipulates that net income accruing to a grantor trust or a disregarded entity is considered distributed to its sole owner if the owner has the right to withdraw or compel distribution of that income.

The bill takes effect immediately upon enactment and has retroactive applicability to tax years beginning on or after January 1, 2024. This retroactive provision ensures that individuals can benefit from the expanded exclusion for the current tax year, aligning the law with the new eligibility criteria for farm tenancy income.

Statutes affected:
Introduced: 422.7