Senate
File
104
-
Introduced
SENATE
FILE
104
BY
CHELGREN
A
BILL
FOR
An
Act
exempting
from
the
computation
of
net
income
for
the
1
individual
state
income
tax
all
social
security
benefits
2
and
governmental
or
other
pension
or
retirement
pay,
and
3
including
effective
date
and
retroactive
applicability
4
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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Section
1.
Section
422.7,
subsection
13,
Code
2013,
is
1
amended
by
striking
the
subsection
and
inserting
in
lieu
2
thereof
the
following:
3
13.
Subtract,
to
the
extent
included,
the
amount
of
social
4
security
benefits
taxable
under
section
86
of
the
Internal
5
Revenue
Code.
6
Sec.
2.
Section
422.7,
subsection
31,
Code
2013,
is
amended
7
to
read
as
follows:
8
31.
For
a
person
who
is
disabled,
or
is
fifty-five
years
of
9
age
or
older,
or
is
the
surviving
spouse
of
an
individual
or
10
a
survivor
having
an
insurable
interest
in
an
individual
who
11
would
have
qualified
for
the
exemption
under
this
subsection
12
for
the
tax
year,
subtract
Subtract
,
to
the
extent
included,
13
the
total
amount
of
a
governmental
or
other
pension
or
14
retirement
pay,
including
,
but
not
limited
to
,
defined
benefit
15
or
defined
contribution
plans,
annuities,
individual
retirement
16
accounts,
plans
maintained
or
contributed
to
by
an
employer,
17
or
maintained
or
contributed
to
by
a
self-employed
person
as
18
an
employer,
and
deferred
compensation
plans
or
any
earnings
19
attributable
to
the
deferred
compensation
plans
,
up
to
a
20
maximum
of
six
thousand
dollars
for
a
person,
other
than
a
21
husband
or
wife,
who
files
a
separate
state
income
tax
return
22
and
up
to
a
maximum
of
twelve
thousand
dollars
for
a
husband
23
and
wife
who
file
a
joint
state
income
tax
return.
However,
a
24
surviving
spouse
who
is
not
disabled
or
fifty-five
years
of
age
25
or
older
can
only
exclude
the
amount
of
pension
or
retirement
26
pay
received
as
a
result
of
the
death
of
the
other
spouse.
A
27
husband
and
wife
filing
separate
state
income
tax
returns
or
28
separately
on
a
combined
state
return
are
allowed
a
combined
29
maximum
exclusion
under
this
subsection
of
up
to
twelve
30
thousand
dollars.
The
twelve
thousand
dollar
exclusion
shall
31
be
allocated
to
the
husband
or
wife
in
the
proportion
that
each
32
spouse’s
respective
pension
and
retirement
pay
received
bears
33
to
total
combined
pension
and
retirement
pay
received
.
34
Sec.
3.
EFFECTIVE
UPON
ENACTMENT.
This
Act,
being
deemed
of
35
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104
immediate
importance,
takes
effect
upon
enactment.
1
Sec.
4.
RETROACTIVE
APPLICABILITY.
This
Act
applies
2
retroactively
to
January
1,
2013,
for
tax
years
beginning
on
3
or
after
that
date.
4
EXPLANATION
5
This
bill
exempts
all
social
security
benefits
and
6
governmental
or
other
pension
or
retirement
pay
from
the
7
individual
income
tax.
“Governmental
or
other
pension
or
8
retirement
pay”
includes
but
is
not
limited
to
defined
benefit
9
or
defined
contribution
plans,
annuities,
individual
retirement
10
accounts,
plans
maintained
or
contributed
to
by
an
employer,
11
or
maintained
or
contributed
to
by
a
self-employed
person
as
12
an
employer,
and
deferred
compensation
plans
or
any
earnings
13
attributable
to
the
deferred
compensation
plans.
14
Under
current
law,
77
percent
of
social
security
benefits
15
are
exempt
from
the
individual
income
tax,
which
exemption
16
amount
is
scheduled
to
rise
to
89
percent
in
2013
and
100
17
percent
in
2014
and
subsequent
years.
Also
under
current
law,
18
the
first
$6,000
for
individual
filers
and
$12,000
for
joint
19
filers
of
governmental
or
other
pension
or
retirement
pay
is
20
exempt
from
the
individual
income
tax
for
individuals
who
are
21
disabled,
55
years
of
age
or
older,
or
surviving
spouses
or
22
certain
other
survivors
of
those
individuals.
23
The
bill
takes
effect
upon
enactment,
and
applies
24
retroactively
to
tax
years
beginning
on
or
after
January
1,
25
2013.
26
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