This bill amends Iowa's corporate income tax law to create a deduction for net controlled foreign corporation tested income (NCTI). The current law, specifically Code section 422.35(12), references global intangible low-taxed income (GILTI) under section 951A of the Internal Revenue Code (IRC). However, recent federal legislation has replaced GILTI with NCTI, which encompasses a broader range of foreign income. To align state law with this federal change, the bill removes the specific references to GILTI from the state tax code, thereby allowing the deduction for NCTI under the same IRC section.

Additionally, the bill includes a retroactive applicability provision, meaning it will take effect for tax years beginning on or after January 1, 2026. This ensures that taxpayers can benefit from the deduction for NCTI as soon as the new law is in effect, reflecting the changes made at the federal level.

Statutes affected:
Introduced: 422.35