NO STATE TAXES ON FEDERAL REBATE

Last week, the Iowa House acted on our priority to protect middle and low income Iowans. The House passed legislation to make sure that Iowans will not have to pay state income taxes on the rebate checks they will be getting from the federal government this year. The purpose of the federal rebate is to help these Iowans and encourage consumer spending. It makes no sense for the Iowa Legislature to thwart the goals set out by Congress.

The federal economic stimulus package, recently enacted in Washington, will provide rebates up to $600 for an individual tax filer or $1,200 on a joint return. In addition, parents will get an extra $300 rebate for each child eligible for the child care tax credit. (The per-child rebate is phased-out as household income gets higher).

According to Congressional action, the federal rebates will be reduced by five percent of the amount of income exceeding $75,000 for individuals and $150,000 for joint returns. In addition, those with little or no tax liability may qualify for the minimum $300 rebate ($600 for joint filers), if their tax return shows at least $3,000 in qualifying income.

Low-income persons earning enough qualifying income, who would normally not be required to file a tax return, will have to file a 2007 return to receive the minimum rebate. Rebate income will not cause a tax liability for low-income filers or negatively affect any income-based government benefits, such as Social Security, Veterans benefits, food stamps or other programs.

By exempting the federal rebate from state taxes, a total of $67 million will not come out of Iowans' pockets when they file their income taxes next year.

PROTECTING IOWANS' HEALTH

I continue to work on a health care reform bill based on the ideas that came out of the Health Care Commission that I co-chaired during the interim. The Governor has also added some suggestions for improving and protecting the health of Iowans. Those ideas are being incorporated into a bill being considered by a House subcommittee. Our goal is to expand health care coverage to more Iowans, especially the 44,000 children whose parents work but do not receive and cannot afford health care insurance.

The health care legislation we are working on will increase electronic medical record keeping to improve efficiency and quality of patient care and to create medical homes to better coordinate care and lower costs. Governor Culver is also encouraging us to cover young people up to age 25 under their parent’s insurance policies, and to cover pre-existing conditions when you switch from group to individual insurance.

I look forward to another very busy week working at the Capitol for my neighbors of House District 29. You can write me at the State Capitol, Des Moines, IA 50319; call me at 515/281-7328 or e-mail me at  ro.foege@legis.state.ia.us.

Ro

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