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HF 31

A bill for an act creating the new resident and new graduate tax credits, available against the individual income tax, and including retroactive applicability provisions.

2025-2026 Regular Session Introduced by Brian Lohse

Bill HF 31 offers tax credits to new residents and recent graduates, promoting population growth and skilled workforce attraction while ensuring fiscal responsibility.

Subcommittee recommends passage.
#incometaxes #residence #taxcredits
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WeVote Research Nonpartisan
Bill Summary · HF 31

Summary of Bill HF 31

Bill Number: HF 31
Title: A bill for an act creating the new resident and new graduate tax credits, available against the individual income tax, and including retroactive applicability provisions.
Status: Subcommittee recommends passage.
Introduced: January 14, 2025
Classification: Bill
Subject: Income taxes, residence, tax credits

Purpose and Intent

Bill HF 31 aims to establish new tax credits for individuals who are either new residents or recent graduates. The intent is to incentivize population growth and attract skilled workers to the state by providing financial relief through individual income tax credits.

Key Provisions

  1. New Resident Tax Credit:

    • Available to individuals who have recently moved to the state.
    • Can be claimed for up to four consecutive tax years.

  2. New Graduate Tax Credit:

    • Available to individuals who have recently graduated.
    • Can be claimed one time in a lifetime for the tax year specified in the bill.
    • Allows for an exemption from withholding on the state W-4 form.
    • Non-refundable; any excess credit beyond tax liability cannot be refunded.

  3. Eligibility Restrictions:

    • Individuals receiving public assistance (defined as the Supplemental Nutrition Assistance Program, Medicaid, or the Family Investment Program) after the first tax year of claiming the credit are ineligible for the new graduate tax credit.

  4. Repeal Conditions:

    • The new resident and new graduate tax credits will be repealed on January 1 following three consecutive calendar years where the statewide average annual unemployment rate equals or exceeds 4%.
    • The Department of Workforce Development will notify the Code editor when this condition is met.

  5. Retroactive Applicability:

    • The provisions of the bill apply retroactively to tax years beginning on or after January 1, 2025.

Impact

  • Who is Affected:

    • New residents and recent graduates in the state who meet the eligibility criteria will benefit from the tax credits.
    • The bill may also impact state revenue depending on the number of individuals claiming the credits.

  • Procedural Aspects:

    • The bill was introduced and referred to the Ways and Means Committee on January 14, 2025.
    • A subcommittee meeting was held on January 29, 2025, where it was recommended for passage.

Conclusion

Bill HF 31 represents a strategic effort to enhance the state's attractiveness to new residents and graduates by providing significant tax incentives. With its retroactive applicability and defined conditions for repeal, the bill aims to create a favorable economic environment while also ensuring fiscal responsibility in the face of changing economic conditions.

Compiled from official sources — confirm details with the bill’s official record.

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