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.)
Summary
Senate File 379 creates a new individual income tax deduction for certain education-related expenses paid for career-focused programs at institutions of higher education and for participation in registered apprenticeship programs. The deduction covers tuition, fees, books, supplies, and equipment, and it also treats certain loan repayments as qualifying payments when they relate to covered higher-education instruction. The bill specifically applies to career-related programs that do not qualify for college credit, as well as apprenticeship programs registered with the Iowa Office of Apprenticeship.
The bill excludes payments made from the Iowa education savings plan or similar plans from qualifying for the deduction. It also directs the Iowa Department of Revenue to adopt rules to implement the new deduction. The measure is retroactive to January 1, 2025, meaning it applies to tax years beginning on or after that date.
Impact
SF 379 would amend Iowa Code section 422.7 by adding a new subtraction from individual income tax for eligible educational expenses and apprenticeship costs. This would reduce taxable income for qualifying taxpayers and could lower state income tax liability for individuals paying for noncredit career training or apprenticeship participation. The bill also affects the administration of the tax code by requiring rulemaking from the Department of Revenue and by defining key terms such as institution of higher education, expenses, apprenticeship program, and payment.
Sentiment
The available legislative history suggests generally favorable sentiment toward the bill. The Senate Workforce Report passed unanimously, 13-0, and the subcommittee recommended passage, indicating broad support at the committee level. No committee transcript is available here, but the voting record and procedural posture point to a positive reception for the proposal.
Contention
There is little visible opposition in the available record, but the bill’s main policy choices could be points of discussion. These include limiting the deduction to career-related programs that do not earn college credit, excluding payments made from education savings plans, and extending the benefit to loan repayments tied to covered instruction. Potential concerns would likely center on revenue loss, whether the deduction should be broader or narrower, and how to verify eligible expenses and apprenticeship participation. However, no specific objections are documented in the provided materials.
Related
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.)
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.)
A bill for an act relating to the adoption tax credit available against the individual income tax, and including effective date and retroactive applicability provisions.(Formerly HF 965.)
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Requires undergraduate students to file degree plan and requires institutions of higher education and certain propriety institutions to develop pathway systems to graduation.
Requires undergraduate students to file degree plan and requires institutions of higher education and certain proprietary institutions to develop pathway systems to graduation.
Establishes process for merger or consolidation of public institution of higher education with other institutions of higher education or certain proprietary institutions; requires executive and legislative approval of merger or consolidation.
Establishes process for merger or consolidation of public institution of higher education with other institutions of higher education or certain proprietary institutions; requires executive and legislative approval of merger or consolidation.
Relating to the issuance of a diploma to a student graduating from a public institution of higher education that has undergone a merger, acquisition, or name change.