Bill Text: IA HF434 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act exempting from the individual income tax the amount of income resulting from the discharge of certain student loan debt on account of death and including retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-01-31 - Subcommittee: Rizer, Gaskill and Nunn. H.J. 181. [HF434 Detail]
Download: Iowa-2017-HF434-Introduced.html
House File 434 - Introduced HOUSE FILE BY R. TAYLOR A BILL FOR 1 An Act exempting from the individual income tax the amount 2 of income resulting from the discharge of certain student 3 loan debt on account of death and including retroactive 4 applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 2403YH (2) 87 mm/rn/sc PAG LIN 1 1 Section 1. Section 422.7, Code 2017, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 18. Subtract, to the extent included, 1 4 the amount of income resulting from a discharge of qualified 1 5 student loan debt on account of the death of the student or 1 6 borrower. For purposes of this subsection, "qualified student 1 7 loan" means a student loan as defined in section 108(f)(2) 1 8 of the Internal Revenue Code or a private education loan as 1 9 defined in 15 U.S.C. {1650(a)(7). 1 10 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 1 11 retroactively to January 1, 2017, for tax years beginning on 1 12 or after that date. 1 13 EXPLANATION 1 14 The inclusion of this explanation does not constitute agreement with 1 15 the explanation's substance by the members of the general assembly. 1 16 Under current law for federal income tax purposes and Iowa 1 17 income tax purposes, a discharge (cancellation) of student 1 18 loan debt on account of death results in taxable income to 1 19 the debtor for the amount of the debt discharged. This bill 1 20 exempts, for Iowa individual income tax purposes, income 1 21 resulting from a discharge of qualified student loan debt on 1 22 account of the death of the student or borrower. 1 23 "Qualified student loan" is defined in the bill, but 1 24 generally includes postsecondary education student loans made 1 25 by the United States or a federal agency or instrumentality, a 1 26 state or political subdivision of a state, a tax=exempt public 1 27 benefit corporation controlling a hospital, certain educational 1 28 organizations, or private educational lenders. 1 29 The bill applies retroactively to January 1, 2017, for tax 1 30 years beginning on or after that date. LSB 2403YH (2) 87 mm/rn/sc
