Bill Text: IA SF432 | 2021-2022 | 89th 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) 2021-03-17 - Fiscal note. [SF432 Detail]
Download: Iowa-2021-SF432-Introduced.html
Senate
File
432
-
Introduced
SENATE
FILE
432
BY
ZAUN
A
BILL
FOR
An
Act
providing
a
deduction
from
the
individual
income
tax
for
1
the
amount
of
interest
paid
on
a
qualified
education
loan
2
and
including
retroactive
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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432
Section
1.
Section
422.7,
Code
2021,
is
amended
by
adding
1
the
following
new
subsection:
2
NEW
SUBSECTION
.
63.
Subtract,
to
the
extent
not
already
3
excluded,
the
amount
of
interest
paid
by
the
taxpayer
during
4
the
tax
year
on
a
qualified
education
loan,
as
defined
in
5
section
221
of
the
Internal
Revenue
Code.
6
Sec.
2.
RETROACTIVE
APPLICABILITY.
This
Act
applies
7
retroactively
to
January
1,
2021,
for
tax
years
beginning
on
8
or
after
that
date.
9
EXPLANATION
10
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
11
the
explanation’s
substance
by
the
members
of
the
general
assembly.
12
This
bill
relates
to
the
deduction
of
student
loan
interest
13
for
purposes
of
the
individual
income
tax.
14
Under
current
law
for
federal
income
tax
purposes
and
Iowa
15
income
tax
purposes,
an
individual
is
allowed
to
deduct
up
to
16
$2,500
of
interest
paid
on
a
qualified
education
loan
(section
17
221
of
the
Internal
Revenue
Code).
However,
this
deduction
is
18
gradually
phased
out
for
individuals
with
income
in
excess
of
19
$70,000
($140,000
for
a
married
couple
filing
a
joint
return),
20
and
is
completely
phased
out
for
individuals
with
income
of
21
$85,000
or
more
($170,000
for
a
married
couple
filing
a
joint
22
return).
These
income
phase-out
levels
are
adjusted
for
23
inflation
each
year
according
to
federal
law.
24
The
bill
allows
an
individual
to
deduct,
for
Iowa
income
tax
25
purposes,
the
total
amount
of
interest
paid
during
the
tax
year
26
on
a
qualified
education
loan.
27
The
bill
applies
retroactively
to
tax
years
beginning
on
or
28
after
January
1,
2021.
29
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