Iowa HF1020 modifies the child and dependent care credit for individual income tax, reducing income thresholds and removing the maximum income limit.

Iowa HF1020 modifies the child and dependent care credit available against the individual income tax. The bill reduces the number of income thresholds from seven to four and removes the maximum income threshold of $90,000 for eligibility. This change means that any taxpayer with an Iowa net income of $25,000 or more can use 50 percent of the federal child and dependent care credit as a refundable credit against the Iowa individual income tax, regardless of federal tax liability. The bill applies retroactively to tax years beginning on or after January 1, 2025.

Iowa HF1020 modifies the child and dependent care credit for individual income tax, reducing income thresholds and removing the maximum income limit.

Iowa HF1020 modifies the child and dependent care credit available against the individual income tax. The bill reduces the number of income thresholds from seven to four and removes the maximum income threshold of $90,000 for eligibility. This change means that any taxpayer with an Iowa net income of $25,000 or more can use 50 percent of the federal child and dependent care credit as a refundable credit against the Iowa individual income tax, regardless of federal tax liability. The bill applies retroactively to tax years beginning on or after January 1, 2025.