The Iowa House unanimously passed a COVID-19 tax relief plan on Wednesday. But not before they amended it.
The amendment included similar language that Democrat Congresswoman Cindy Axne and Democrat Sen. Dick Durbin sponsored at the federal level.
Iowans on unemployment for 17 weeks received an additional $600 per week last year. That additional $600 per week will not be taxed by Iowa due to the amendment. (To be fair, this amended version of the bill still has to pass the Iowa Senate).
The pandemic unemployment insurance piece of the amendment will cost $86.2 million that will be paid for from the Taxpayer Trust Fund — a fund intended to be used to help lower taxes for all Iowans.
The amendment was adopted by a voice vote, so there is no record of that vote in the House.
While this amendment may seem “Iowa nice” on the surface because it attempts to help those on unemployment during COVID, it hurts Iowans who were working on the front lines throughout the pandemic.
According to the fiscal note, the changes “will modestly reduce the probability of achieving both revenue triggers; as a consequence, the bill could result in delayed implementation of the income tax reduction by one tax year.”
This means rather than provide tax relief for all Iowans, including those who worked throughout the pandemic, it will provide tax relief for Iowans who did not work during the pandemic.
Iowa Democrats celebrated the move.