Tax cuts should focus first on helping Iowa families, farmers and small businesses. That approach is reflected in Senate File 106, which the Iowa Senate approved on February 4.
This legislation updates Iowa’s tax code in light of the recent changes at the federal level. The Iowa legislation I voted for will prevent a cut in the Iowa Earned Income Tax Credit through 2017. It also makes permanent the child and dependent care tax credits for expenses of up to $3,000 for one child and $6,000 for two or more. The student loan interest deduction is made permanent, and the deduction of up to $250 in out-of-pocket expenses by Iowa teachers is extended for an additional two years.
Another provision will provide a nearly $20 million boost to the Iowa economy. That will be the result of allowing small businesses and farmers to immediately write off up to $500,000 in new equipment rather than spreading that deduction over several years through depreciation.
It will help grow our economy at a time when Iowans need it. I am happy that the Iowa House followed the Senate’s lead by passing this bill, and I look forward to the Governor signing it.