Bill Text: IA HF2117 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act providing a deduction from the individual income tax for the amount of interest paid on a qualified education loan and including retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-04-08 - Fiscal note. HCS. [HF2117 Detail]
Download: Iowa-2015-HF2117-Introduced.html
House File 2117 - Introduced HOUSE FILE BY R. TAYLOR A BILL FOR 1 An Act providing a deduction from the individual income tax for 2 the amount of interest paid on a qualified education loan 3 and including retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5656YH (2) 86 mm/sc PAG LIN 1 1 Section 1. Section 422.7, Code 2016, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 18. Subtract, to the extent not already 1 4 excluded, the amount of interest paid by the taxpayer during 1 5 the tax year on a qualified education loan, as defined in 1 6 section 221 of the Internal Revenue Code. 1 7 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 1 8 retroactively to January 1, 2016, for tax years beginning on 1 9 or after that date. 1 10 EXPLANATION 1 11 The inclusion of this explanation does not constitute agreement with 1 12 the explanation's substance by the members of the general assembly. 1 13 This bill relates to the deduction of student loan interest 1 14 for purposes of the individual income tax. 1 15 Under current law for federal income tax purposes and Iowa 1 16 income tax purposes, an individual is allowed to deduct up 1 17 to $2,500 of interest paid on a qualified education loan. 1 18 However, this deduction is gradually phased out for individuals 1 19 with income in excess of $65,000 ($130,000 for a married 1 20 couple filing a joint return), and is completely phased out 1 21 for individuals with income of $80,000 or more ($160,000 for a 1 22 married couple filing a joint return). These income phase=out 1 23 levels are adjusted for inflation each year according to 1 24 federal law. 1 25 The bill allows an individual to deduct, for Iowa income tax 1 26 purposes, the total amount of interest paid during the tax year 1 27 on a qualified education loan. 1 28 The bill applies retroactively to tax years beginning on or 1 29 after January 1, 2016. LSB 5656YH (2) 86 mm/sc