This bill amends Iowa's Code section 425.15 to expand the eligibility for the disabled veteran homestead tax credit by introducing new categories based on the percentage of a veteran's permanent service-connected disability rating. Specifically, it establishes a phased approach where, starting from the fiscal year beginning July 1, 2026, veterans with a disability rating of 70% or higher, and later those with ratings of 40% and 10%, can qualify for a credit that is either the standard homestead credit or a percentage of the tax levied on their homestead, depending on their disability rating. Additionally, the bill allows the credit to continue to the estate of a deceased owner or to a surviving spouse and child, as long as the spouse remains unmarried.

Furthermore, the bill modifies the funding structure for the homestead credit fund, ensuring that the amount paid by the state to county treasurers for these credits does not exceed the established limits. It also clarifies that the provisions of Code section 25B.7, which mandates state funding for new property tax credits, do not apply to any amounts exceeding what the state pays. The bill is effective immediately upon enactment and applies retroactively to claims filed on or after January 1, 2025, for property taxes due in fiscal years starting July 1, 2026.

Statutes affected:
Introduced: 425.15, 425.1, 234.1