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SF 402

A bill for an act relating to the deduction of nursing facility expenses for purposes of the individual income tax, and including retroactive applicability provisions.

2025-2026 Regular Session Introduced by Dave Sires

SF 402 allows Iowa residents to deduct nursing facility expenses from state income taxes with retroactive application to prior tax years.

Subcommittee: Rowley, Bisignano, and Dawson.
#expenditures #incometaxes #medicalcare #nursingfacilities #nursinghomes #taxexemptions
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WeVote Research Nonpartisan
Bill Summary · SF 402

Legislative bill overview

SF 402 would allow Iowa taxpayers to deduct nursing facility expenses from their state income taxes. The bill includes retroactive applicability provisions, meaning the tax deduction could apply to prior tax years beyond the current year.

Why is this important

Nursing care represents a substantial out-of-pocket expense for many Iowa families, often costing $80,000-$100,000+ annually. This deduction could reduce the tax burden on individuals or families paying for long-term care, though the real impact depends on deduction limits and income thresholds that aren't specified in available bill language.

Potential points of contention

  • Revenue impact: Retroactive applicability could significantly reduce state tax revenue by allowing refunds for multiple prior years; lawmakers may debate whether Iowa can afford this cost
  • Scope and equity questions: Unclear whether the deduction applies to all nursing facility costs, insurance premiums only, or certain income levels—potentially benefiting higher-income families more than lower-income families who struggle most with these costs
  • Administrative complexity: Retroactive tax provisions create implementation challenges and increase IRS/state auditing complexity, and may inadvertently create disputes over which prior years qualify

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

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