In Iowa, go to prom, get a tax credit

By Paul Brennan | Iowa Watchdog

DES MONIES, Iowa — Some of that huge sum your kid shamed you into blowing on prom is eligible for a state tax credit, although nobody is quite sure just what you can claim.

If you look as carefully into the Iowa tax code as Joe Kristan, a certified public accountant and creator of the Tax Update Blog, you will find certain prom expenses qualify you for a break under the state’s Tuition and Textbook Credit.

Prom and “other school-related social activities” are counted among extracurricular school activities, a broad and vague subset of an even broader and more vague grouping of fees, books and materials under the simple heading, “textbooks,” meaning “books and other instructional materials used in teaching (those subjects legally and commonly taught in Iowa’s public elementary and secondary schools),” according to the Iowa Department of Revenue.

Prom isn’t just a dance, it’s a textbook-related activity.

Laura Welch, frequently tapped by the media as the state’s foremost expert on prom, told Iowa Watchdog she had no idea there was a prom-related tax credit. Welch is the general manager of Stacey’s Prom and Formal Wear in Urbandale, the largest prom shop in Iowa.

From the language of the law, it was impossible for Iowa Watchdog to explain to Welch what prom expenses could be claimed. The law is quite clear about what you cannot: the rental or purchase of your daughter’s elaborate dress or your son’s questionable tuxedo.

“Aside from excluding clothing, it’s kind of vague, isn’t it?” Welch said after being read the text of the tax credit. “Fees? Does that just cover tickets or does it cover transportation, too? I can see how this would be confusing.”

That confusion may be what makes the credit appropriate as an educational tax credit. One of the most important lessons anyone — student or parent — can learn is that taxes don’t have to make sense. They just have to be paid.

Contact Paul Brennan at pbrennan@watchdog.org