This bill establishes a new graduate nonresident tuition tax credit applicable against the individual income tax in Iowa. It defines key terms such as "institution," "new graduate," "health care professional," "teacher," "licensed veterinarian," and "professional engineer." A "new graduate" is defined as an individual who has graduated from an institution within three years of claiming the credit, has been a resident and employed in Iowa since graduation, and works in one of the specified professions. The credit is set at 100% of the difference between the base tuition paid by the new graduate as a nonresident student and the base tuition paid by a resident student at the same institution for the same academic year.

Additionally, the bill mandates that the board of regents post the base tuition amounts for both nonresident and resident students for at least the previous ten years on its website. The credit is non-refundable and can be carried forward for up to five tax years if it exceeds the tax liability. However, it cannot be applied to future tax liabilities for new graduates who become nonresidents. The provisions of this bill are retroactively applicable to tax years beginning on or after January 1, 2026.