Iowa 2023-2024 Regular Session

Iowa Senate Bill SF2440

Introduced
4/11/24  
Engrossed
4/19/24  
Introduced
4/11/24  

Caption

A bill for an act relating to the Iowa educational savings plan trust by expanding the plan trust to include career-related programs approved by the Iowa office of apprenticeship for purposes of withdrawals qualifying for an individual income tax deduction, and including retroactive applicability provisions.(Formerly SF 2259, SSB 3128.)

Impact

The introduction of SF2440 marks a significant shift in the use of 529 plans in Iowa by broadening their applicability beyond traditional college education expenses. This change targets non-college educational pathways, including vocational and technical training, emphasizing career readiness and skills development. By enabling tax deductions for such programs, the bill aims to incentivize individuals to pursue practical training opportunities that cater to their career ambitions, potentially impacting workforce development positively in the state.

Summary

Senate File 2440 proposes an amendment to the Iowa educational savings plan trust (commonly known as a 529 plan) to include career-related programs approved by the Iowa office of apprenticeship. The bill allows for withdrawals from the 529 plan for expenses related to these career-related programs to qualify for state individual income tax deductions. Such career-related programs are defined as classes or series of classes that, while not credit-bearing, align with the beneficiaries' career aspirations and enable them to acquire skills for future employment opportunities.

Contention

Discussion surrounding SF2440 may focus on the implications of including these types of programs within the established 529 plan framework. Supporters argue that this expansion is essential for adapting Iowa's educational financial resources to contemporary labor market needs, thereby enhancing employability. However, there could be concerns regarding potential misuse of the funds or complications arising from the differentiation between career-related programs and traditional education. The bill includes retroactive applicability, effective from January 1, 2024, raising questions about its implications for individuals who have already made educational savings decisions under previous regulations.

Companion Bills

IA SSB3128

Related 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.(See SF 2259, SF 2440.)

IA SF2259

Similar To 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.)

Previously Filed As

IA SF379

A bill for an act creating a deduction available against the individual income tax for educational expenses at institutions of higher education for career-related programs and apprenticeship programs, and including retroactive applicability provisions.(Formerly SSB 1119.)

IA SSB1119

A bill for an act creating a deduction available against the individual income tax for educational expenses at institutions of higher education for career-related programs and apprenticeship programs, and including retroactive applicability provisions.(See SF 379.)

IA HF568

A bill for an act excluding interest income earned from banks and credit unions from the calculations of Iowa net income for purposes of the individual income tax, and including effective date and retroactive applicability provisions.

IA HF567

A bill for an act excluding the net capital gain from the sale of gold or silver from the calculations of Iowa net income for purposes of the individual income tax, and including effective date and retroactive applicability provisions.

IA HSB229

A bill for an act relating to deducting excess business losses for purposes of the individual income tax, and including retroactive applicability provisions.

IA HF961

A bill for an act relating to individual income taxation by exempting certain amounts received from nonqualified deferred compensation plans and including retroactive applicability provisions.(Formerly HF 94.)

IA HF624

A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 56.)

IA SF402

A bill for an act relating to the deduction of nursing facility expenses for purposes of the individual income tax, and including retroactive applicability provisions.

IA HF27

A bill for an act relating to the deduction of the purchase amount of nonathletic school uniforms for purposes of the individual income tax, and including retroactive applicability provisions.

IA SF2425

A bill for an act relating to education, including by modifying provisions related to charter schools, the Iowa public employees' retirement system, financing programs for charter schools and nonpublic schools administered by the Iowa finance authority, the statewide voluntary preschool program for four-year-old children, education savings accounts, independent accrediting agencies, teacher training and licensure, and making appropriations, and including applicability and retroactive applicability provisions.(Formerly SF 2175; See SF 2501.)

Similar Bills

No similar bills found.