House Study Bill 224
BY (PROPOSED COMMITTEE ON
WAYS AND MEANS BILL BY
A BILL FOR
1 An Act exempting from the computation of net income for the
2 individual state income tax all governmental or other
3 pension or retirement pay, and including effective date and
4 retroactive applicability provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 1 Section 1. Section 422.7, subsection 31, Code 2013, is
1 2 amended to read as follows:
1 3 31.
For a person who is disabled, or is fifty=five years of
1 4 age or older, or is the surviving spouse of an individual or
1 5 a survivor having an insurable interest in an individual who
1 6 would have qualified for the exemption under this subsection
1 7 for the tax year, subtract Subtract, to the extent included,
1 8 the total amount of a governmental or other pension or
1 9 retirement pay, including , but not limited to , defined benefit
1 10 or defined contribution plans, annuities, individual retirement
1 11 accounts, plans maintained or contributed to by an employer,
1 12 or maintained or contributed to by a self=employed person as
1 13 an employer, and deferred compensation plans or any earnings
1 14 attributable to the deferred compensation plans , up to a
1 15 maximum of six thousand dollars for a person, other than a
1 16 husband or wife, who files a separate state income tax return
1 17 and up to a maximum of twelve thousand dollars for a husband
1 18 and wife who file a joint state income tax return. However, a
1 19 surviving spouse who is not disabled or fifty=five years of age
1 20 or older can only exclude the amount of pension or retirement
1 21 pay received as a result of the death of the other spouse. A
1 22 husband and wife filing separate state income tax returns or
1 23 separately on a combined state return are allowed a combined
1 24 maximum exclusion under this subsection of up to twelve
1 25 thousand dollars. The twelve thousand dollar exclusion shall
1 26 be allocated to the husband or wife in the proportion that each
1 27 spouse's respective pension and retirement pay received bears
1 28 to total combined pension and retirement pay received.
1 29 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
1 30 immediate importance, takes effect upon enactment.
1 31 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies
1 32 retroactively to January 1, 2013, for tax years beginning on
1 33 or after that date.
1 34 EXPLANATION
1 35 This bill exempts all governmental or other pension or
2 1 retirement pay from the individual income tax. "Governmental
2 2 or other pension or retirement pay" includes but is not limited
2 3 to defined benefit or defined contribution plans, annuities,
2 4 individual retirement accounts, plans maintained or contributed
2 5 to by an employer, or maintained or contributed to by a
2 6 self=employed person as an employer, and deferred compensation
2 7 plans or any earnings attributable to the deferred compensation
2 8 plans.
2 9 The bill takes effect upon enactment, and applies
2 10 retroactively to tax years beginning on or after January 1,
2 11 2013.
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