Text: HF00358 Text: HF00360 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Sec. 1. Section 422.7, Code 1995, is amended by adding the
1 2 following new subsection:
1 3 NEW SUBSECTION. 32. For a person who is disabled, or is
1 4 fifty-five years of age or older, or is the surviving spouse
1 5 of an individual or a survivor having an insurable interest in
1 6 an individual who would have qualified for the exemption under
1 7 this subsection for the tax year, subtract, to the extent
1 8 included, the total amount of a governmental or other pension,
1 9 retirement pay, annuity, or other similar periodic payment
1 10 made under a plan maintained or contributed to by an employer,
1 11 or maintained or contributed to by a self-employed person as
1 12 an employer, up to a maximum of three thousand dollars for a
1 13 person who files a separate state income tax return for a tax
1 14 year beginning in the 1996 calendar year, and up to a maximum
1 15 of six thousand dollars for a husband and wife who file a
1 16 joint state income tax return for a tax year beginning in the
1 17 1996 calendar year. For a tax year beginning in the 1997
1 18 calendar year, subtract, to the extent included, the total
1 19 amount for a person who files a separate state income tax
1 20 return, up to a maximum of six thousand dollars, and for a
1 21 husband and wife who file a joint state income tax return, up
1 22 to a maximum of twelve thousand dollars. For tax years
1 23 beginning on or after January 1, 1998, for a person who files
1 24 a separate state income tax return or for a husband and wife
1 25 who file a joint state income tax return, subtract, to the
1 26 extent included, the total amount of a governmental or other
1 27 pension, retirement pay, annuity, or other similar periodic
1 28 payment made under a plan maintained or contributed to by an
1 29 employer. However, a surviving spouse who is not disabled or
1 30 fifty-five years of age or older can only exclude the amount
1 31 of annuities or other similar periodic payments received as a
1 32 result of the death of the other spouse.
1 33 Sec. 2. Section 422.73, Code 1995, is amended by adding
1 34 the following new subsection:
1 35 NEW SUBSECTION. 3. Notwithstanding subsection 2, a claim
2 1 for credit or refund of individual income tax paid for any tax
2 2 year beginning on or after January 1, 1985, and before January
2 3 1, 1989, is considered timely if filed with the department on
2 4 or before April 30, 1996, if the taxpayer's claim is the
2 5 result of the unconstitutional taxation of federal pension
2 6 benefits based upon the decision in Davis v. Michigan
2 7 Department of Treasury, 489 U.S. 803, 109 S. Ct. 1500 (1989).
2 8 A taxpayer entitled to a credit or refund of tax paid under
2 9 this subsection shall receive an amount equal to ninety-five
2 10 percent of the credit or refund plus interest with interest
2 11 not accruing after January 12, 1994. The claim for credit or
2 12 refund shall be made on the income tax return for the tax year
2 13 beginning in the 1995 calendar year. If the taxpayer does not
2 14 owe tax or the credit is in excess of the tax computed, the
2 15 taxpayer may claim a refund of the excess or carry forward the
2 16 excess credit to the following tax year. A credit carried
2 17 forward shall be used or a refund of the remaining credit
2 18 given for the tax year beginning in the 1996 calendar year.
2 19 Sec. 3. APPLICABILITY. Section 1 of this Act applies to
2 20 tax years beginning on or after January 1, 1996.
2 21 EXPLANATION
2 22 This bill allows certain persons to deduct all types of
2 23 pension income in computing income for tax purposes. For a
2 24 tax year beginning in the 1996 calendar year, the bill allows
2 25 a deduction of pension income of up to a maximum of $3,000 for
2 26 a person who files a separate return and $6,000 for a husband
2 27 and wife who file a joint return. For a tax year beginning in
2 28 the 1997 calendar year, the bill allows a deduction of pension
2 29 income of up to a maximum of $6,000 for a person who files a
2 30 separate return and $12,000 for a husband and wife who file a
2 31 joint return. For tax years beginning on or after January 1,
2 32 1998, the total amount of pension income may be deducted for a
2 33 person who files a separate return or for a husband and wife
2 34 who file a joint return.
2 35 This exemption for pension income applies to tax years
3 1 beginning on or after January 1, 1996.
3 2 The bill also provides that a claim for refund of taxes
3 3 imposed on federal retirement pensions filed by April 30,
3 4 1996, is timely filed for taxes imposed for the 1985, 1986,
3 5 1987, and 1988 tax years. The taxpayer is entitled to 95
3 6 percent of the credit or refund plus interest with no interest
3 7 accruing after January 12, 1994. The credit and refund must
3 8 be used or refunded to the taxpayer for the tax years prior to
3 9 the 1997 tax year. A recent Iowa supreme court decision held
3 10 that retired federal employees could retroactively claim a
3 11 refund on state individual income taxes unlawfully imposed on
3 12 their pensions if the claim was timely filed.
3 13 LSB 2289HH 76
3 14 sc/sc/14
Text: HF00358 Text: HF00360 Text: HF00300 - HF00399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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