Bill Text: IA SF2259 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act relating to the Iowa educational savings plan trust by expanding the definition of qualified educational expenses and apprenticeship programs for purposes of withdrawals qualifying for an individual income tax exclusion, and including retroactive applicability provisions.(Formerly SSB 3128; See SF 2440.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2024-04-11 - Committee report approving bill, renumbered as SF 2440. S.J. 821. [SF2259 Detail]
Download: Iowa-2023-SF2259-Introduced.html
Senate
File
2259
-
Introduced
SENATE
FILE
2259
BY
COMMITTEE
ON
WORKFORCE
(SUCCESSOR
TO
SSB
3128)
A
BILL
FOR
An
Act
relating
to
the
Iowa
educational
savings
plan
trust
by
1
expanding
the
definition
of
qualified
educational
expenses
2
and
apprenticeship
programs
for
purposes
of
withdrawals
3
qualifying
for
an
individual
income
tax
exclusion,
and
4
including
retroactive
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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2259
Section
1.
Section
12D.1,
subsection
2,
Code
2024,
is
1
amended
by
adding
the
following
new
paragraph:
2
NEW
PARAGRAPH
.
0c.
“Apprenticeship
program”
means
a
program
3
registered
and
certified
with
the
United
States
secretary
of
4
labor
under
section
1
of
the
federal
National
Apprenticeship
5
Act,
29
U.S.C.
§50,
or
registered
with
the
Iowa
office
of
6
apprenticeship
under
chapter
84D.
7
Sec.
2.
Section
12D.1,
subsection
2,
paragraph
k,
Code
2024,
8
is
amended
to
read
as
follows:
9
k.
“Qualified
education
expenses”
means
the
same
as
10
“qualified
higher
education
expenses”
as
defined
in
section
11
529(e)(3)
of
the
Internal
Revenue
Code,
as
amended
by
Pub.
L.
12
No.
115-97,
and
shall
include
elementary
and
secondary
school
13
expenses
for
tuition
described
in
section
529(c)(7)
of
the
14
Internal
Revenue
Code,
subject
to
the
limitations
imposed
by
15
section
529(e)(3)(A)
of
the
Internal
Revenue
Code.
“Qualified
16
education
expenses”
includes
expenses
for
the
participation
17
in
an
apprenticeship
program
registered
and
certified
with
18
the
United
States
secretary
of
labor
under
section
1
of
the
19
National
Apprenticeship
Act
,
29
U.S.C.
§50
,
and
amounts
paid
as
20
principal
or
interest
on
any
qualified
education
loan
on
behalf
21
of
a
beneficiary
or
a
sibling
of
the
beneficiary,
subject
to
22
the
limitations
imposed
by
section
529(c)(9)(B)
and
(C)
of
the
23
Internal
Revenue
Code.
“Qualified
education
expenses”
includes
24
expenses
paid
to
an
institution
of
higher
education
for
25
career-related
programs
that
do
not
qualify
for
college
credit.
26
Sec.
3.
Section
422.7,
subsection
22,
paragraph
c,
27
subparagraph
(1),
Code
2024,
is
amended
by
adding
the
following
28
new
subparagraph
division:
29
NEW
SUBPARAGRAPH
DIVISION
.
(g)
The
payment
of
expenses
for
30
career-related
programs
that
do
not
qualify
for
college
credit
31
if
such
payments
are
qualified
education
expenses.
32
Sec.
4.
Section
422.7,
subsection
22,
paragraph
c,
33
subparagraph
(2),
subparagraph
division
(a),
Code
2024,
is
34
amended
to
read
as
follows:
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(a)
“Apprenticeship
program”
means
a
program
registered
1
and
certified
with
the
United
States
secretary
of
labor
under
2
section
1
of
the
National
Apprenticeship
Act
,
29
U.S.C.
§50
the
3
same
as
defined
in
section
12D.1
.
4
Sec.
5.
RETROACTIVE
APPLICABILITY.
This
Act
applies
5
retroactively
to
January
1,
2024,
for
tax
years
beginning
on
6
or
after
that
date.
7
EXPLANATION
8
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
9
the
explanation’s
substance
by
the
members
of
the
general
assembly.
10
This
bill
relates
to
the
Iowa
educational
savings
plan
11
trust
(529
plan)
by
expanding
the
definition
of
qualified
12
education
expenses
and
apprenticeship
programs
for
purposes
13
of
withdrawals
from
the
529
plan
qualifying
for
an
individual
14
income
tax
exclusion.
15
The
bill
specifies
that
“qualified
education
expenses”
16
include
expenses
paid
to
an
institution
of
higher
education
for
17
career-related
programs
that
do
not
qualify
for
college
credit.
18
As
a
result,
the
expenses
paid
to
the
institution
of
higher
19
education
for
career-related
programs
that
do
not
earn
college
20
credit
are
excluded
from
the
computation
of
net
income
for
the
21
individual
income
tax.
An
institution
of
higher
education
is
22
defined
in
Code
section
12D.1.
23
Under
current
law,
withdrawals
from
a
529
plan
for
24
expenses
related
to
an
apprenticeship
program
registered
and
25
certified
with
the
United
States
secretary
of
labor
under
26
the
federal
National
Apprenticeship
Act,
are
excluded
from
27
the
computation
of
net
income
for
the
individual
income
tax.
28
The
bill
expands
the
definition
of
“apprenticeship
program”
29
to
include
apprenticeships
registered
with
the
Iowa
office
30
of
apprenticeship
under
Code
chapter
84D,
and
as
a
result
31
the
withdrawals
from
a
529
plan
for
expenses
related
to
an
32
apprenticeship
program
registered
with
the
Iowa
office
of
33
apprenticeship
are
excluded
from
the
computation
of
net
income
34
for
the
individual
income
tax.
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S.F.
2259
The
federal
tax
treatment
of
the
type
of
withdrawal
1
described
in
the
bill
may
differ
from
the
state
tax
treatment
2
under
the
bill.
For
federal
tax
purposes,
if
a
withdrawal
is
3
considered
a
nonqualified
withdrawal,
the
earnings
portion
of
4
the
nonqualified
withdrawal
is
subject
to
federal
taxation
and
5
a
10
percent
withdrawal
penalty.
6
The
bill
applies
retroactively
to
January
1,
2024,
and
7
applies
to
tax
years
beginning
on
or
after
that
date.
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