Minute with Mike, Week 17

From My Desk

Our last day for Per Diem was last Friday. Once that runs out it is supposed to be an incentive for us to get the heck out of Dodge, but I think we are a few days from being done at this point. There seems to be a significant gap between the Senate and the House in regards to taxes and the budget.

The Governor has decided to side with the Senate. (This past Saturday) is the first day back to work at the Capitol, although I have been more than busy back on the farm. I spent the first part of the week trying to get my beans planted and sprayed.

Little baby lambs continue to be born and take their first breath of fresh, spring, Iowa air—is there anything better? This morning, Joe and I tagged the 67th and 68th lambs born since April 23.

There may not be many news letters to follow because when we get done I do not do a newsletter during the interim. I want to thank all of you for taking the time to read it and send me your thoughts and comments.

The Iowa House’s Tax Policy Proposal

Iowa House Republicans are proposing this bill following extensive negotiations with the Iowa Senate and Governor’s office. Iowans elected us to our 59-seat majority in part because of the disciplined, responsible approach to the state budget that they have come to expect from our caucus.

We’ve proposed a plan that is fiscally sound, eases the tax burden on Iowans, and includes priorities of the House, Senate and Governor. We believe this is the path to ending session.

The tax changes in this bill include, among others…

• Removal of triggers from the 2018 tax reform bill which ensures income tax cuts go into effect Jan. 1, 2023.
• Phaseout the inheritance tax over 10 years.
• Return the Taxpayer Relief Fund ($450 million currently) to Iowans in the form of a credit on 2021 tax returns.
• Increase eligibility for the Child Care Tax Credits from families making $45,000 to $90,000.
• Increase the percentage and raise the cap for the School Tuition Organization tax credit.
• Exempt COVID-19 grant money and Paycheck Protection Plan loans from state income tax.
• Require payment parity for mental health services provided via telehealth and in-person.
• Increase workforce housing tax credits to $30 million.
• Increase Brownfield/Grayfield program to $15 million.
• Angel Investor Tax Credit HSB 193 and Rural Econ Development HF 112.
• Increase Volunteer Firefighter, EMS and Peace Officer Tax Credit to $250.
• Exempt food banks from Iowa Sales Tax.

Small Businesses Allowed a Tax Credit for Covid-Related Paid Leave—Including Leave for Vaccination

The American Rescue Plan Act of 2021 (ARP) contains a provision allowing small and midsize employers, and certain governmental employers, to claim refundable tax credits intended as reimbursement for providing paid sick and family leave to employees due to COVID-19, including leave related to vaccinations.

The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1 through Sept. 30. To be eligible, an employer, including a tax-exempt organization, must have fewer than 500 employees.

Employers can then claim tax credits for wages paid for leave taken by employees who are not able to work or telework due to reasons related to COVID-19, including not feeling well after vaccination. The tax credits under the ARP are against the employer's share of the Medicare tax.

They are refundable—meaning the employer could receive a refund if the credits exceed the amount of Medicare tax the employer owes. The tax credit amount equals the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100 percent of the employee's regular rate of pay.

The tax credit for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee's regular rate of pay. All applicable forms for the tax credit can be found on the IRS.gov website.

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