HB 1221: Tax Expenditure Adjustments

Official summary

Abstract published by the legislature (via Open States). Text as published by the legislature; reproduced verbatim.

The bill adjusts 3 2 existing tax expenditures.      Section 2 of the bill limits the alternative minimum tax credit to income tax years commencing prior to January 1, 2026; Section 4 3 requires a corporation, for purposes of determining their state taxable income for state income tax years commencing on or after January 1, 2027, to add to their federal taxable income the amount, if any, that the taxpayer claimed as a deduction on the taxpayer's federal tax return pursuant to the employee remuneration deduction allowed pursuant to section 162 (m) of the internal revenue code; and Section 5 4 limits the period of time that net operating losses generated in income tax years commencing on or after January 1, 2027, can be carried forward from 20 years to 10 years and limits the amount of losses that may be claimed to 70% rather than 80%.      Section 3 2 creates a new tax credit. The new tax credit allows taxpayers to claim a refundable tax credit, in addition to the child tax credit and the family affordability tax credit, in an amount determined by the amount and age of the taxpayer's children and the taxpayer's income. The total amount of the new tax credit is adjusted annually based on legislative council staff projections, such that the total amount of the new tax credit claimed in an income tax year is projected to be the same as the amount of revenue raised in sections 2, 4, 3 and 5 4 .(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Sponsors

Sponsors by party (alphabetical): Democratic 15

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. May 11, 2026Senate Committee on Finance Postpone Indefinitely
2. May 4, 2026House Third Reading Passed - No Amendments
3. May 4, 2026Introduced In Senate - Assigned to Finance
4. May 1, 2026House Second Reading Special Order - Passed with Amendments - Committee, Floor
5. April 30, 2026House Second Reading Laid Over Daily - No Amendments
6. April 28, 2026House Committee on Appropriations Refer Unamended to House Committee of the Whole
7. March 9, 2026House Committee on Finance Refer Amended to Appropriations
8. February 17, 2026Introduced In House - Assigned to Finance