Gov. Reynolds signs bill cutting taxes, investing in mental health and child care
CEDAR RAPIDS, Iowa (KCRG) - Governor Reynolds on Wednesday signed a new law that cuts taxes and invests in mental health, child care and housing.
Senate File 619 drops the tax rate from 8.53 percent to 6.5 percent, reduces the number of tax brackets from nine to four, and eliminates Federal Deductibility.
“In Iowa we are cutting taxes and helping Iowans keep more of their hard earned money,” Reynolds said. “Not only does this legislation reduce income and property taxes, it completely phases out the state’s inheritance tax,” said Gov. Reynolds. “With this legislation, we also provide steady and reliable funding for our state’s mental health system while making significant investments in housing, workforce, and child care.”
Senate File 619 also does the following:
- Phases out the mental health levy over 2 years, saving property taxpayers over $100 million
- Phases out state inheritance tax over 4 years, saving taxpayers nearly $100 million
- Expands eligibility for the Beginning Farmers Tax Credit
- Food Bank sales tax exemption
- Dedicated, sustainable mental health funding from Iowa’s General Fund
- Includes a growth factor that allocates new money as revenue increases
- Increases eligibility for the Child Care Tax Credits from families making $45k - $90k
- Increases workforce housing tax credits to $40 million for FY22 ($35 million for years following)
- Extends Brownfield/Grayfield and increases funding from $10 million to $15 million
- Develops a Manufacturing 4.0 strategic roadmap for the future of manufacturing in the state of Iowa
Reynolds said she plans to propose additional income tax cuts next year to make Iowa a more attractive place to open a business, raise a family and start a career.
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