The Iowa Early Childhood Development Credit is available to taxpayers with Iowa taxable income of less than $90,000. Taxpayers may claim only one of either the child and dependent care credit or the early childhood development credit. This credit is designed to support expenses related to early childhood development, excluding services, materials, or activities for religious instruction or worship if the purpose is to instill religious tenets, doctrines, or worship.
Eligibility and Calculation
- Only taxpayers with Iowa taxable income of less than $90,000 are eligible.
- The credit is allowed for qualifying early childhood development expenses paid during the tax year for a qualifying dependent.
- Nonresidents and part-year residents must compute the credit using the IA 126 apportionment calculation provided in the Iowa IA 1040 instructions to determine the allowable Iowa credit.
- Married taxpayers filing separately: Only the parent claiming the qualifying dependent on the Iowa return may claim the credit.
Important Notes
- A taxpayer may claim either the Iowa Early Childhood Development Credit or the Iowa Child and Dependent Care Credit for the tax year, but not both.
- Expenses for religious instruction, worship, or activities whose primary purpose is to instill religious tenets, doctrines, or worship do not qualify for the credit.
Source:
Form IA 1040
Disclaimer: Always verify details with the official Iowa Department of Revenue forms and instructions. Tax rules may change, and individual circumstances may require professional advice from a CPA or tax attorney.