Senate Democrats have introduced legislation to help Iowa taxpayers by “coupling” Iowa’s tax code with recent federal changes for 2016, the taxes Iowans must pay this April. Thousands of Iowans want to use these provisions, which have been available to them in previous years, to lower their state taxes.
Senate File 428 will benefit nearly 24,000 farmers and small business owners by allowing them to take advantage of a provision called Section 179 expensing. Federal law allows these taxpayers to take a larger deduction on equipment they have purchased as an investment in their operations. If Iowa “couples” with the federal tax code, these folks also get to take a similar deduction on their state tax returns.
The Republican chair of the Senate’s tax-writing committee says he does not intend to support the legislation this year, but I am not giving up. Thousands of Iowans want to use these provisions, which have been available to them in previous years, to lower their state taxes.
Last year, tax coupling legislation helped:
- More than 39,000 Iowa teachers who purchase supplies for their classrooms with their own money.
- More than 43,000 Iowans who own their homes, by allowing them to deduct mortgage insurance premiums from their state taxes.
- More than 18,000 Iowans who are going to college or getting training to improve their skills and better their lives.
- More than 45,000 working Iowans who are married with three or more children, by expanding the Earned Income Tax Credit.