This bill modifies the child and dependent care credit available against the individual income tax in Iowa by amending Section 422.12C. It reduces the number of income thresholds from seven to four, simplifying the calculation of the credit. Specifically, it removes the previous income thresholds for taxpayers earning between $35,000 and $90,000, allowing any taxpayer with a net income of $25,000 or more to claim 50 percent of the federal child and dependent care credit as a refundable credit, regardless of whether their federal credit is limited by their federal tax liability.

Additionally, the bill includes a retroactive applicability provision, meaning it will take effect for tax years beginning on or after January 1, 2025. This change aims to make the child and dependent care credit more accessible to a broader range of taxpayers in Iowa, thereby providing greater financial support for families with dependent care expenses.

Statutes affected:
Introduced: 422.12C