Text: HF00438 Text: HF00440 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. Section 422.7, Code 1995, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 32. a. Subtract, to the extent included,
1 4 the total amount of a governmental or other pension,
1 5 retirement pay, annuity, or other similar periodic payment
1 6 made under a plan maintained or contributed to by an employer,
1 7 or maintained or contributed to by a self-employed person as
1 8 an employer.
1 9 b. (1) Add back, of the amount subtracted in paragraph
1 10 "a", the lesser of the following:
1 11 (a) Fifty percent of the amount in paragraph "a".
1 12 (b) Fifty percent of the excess computed under
1 13 subparagraph (2).
1 14 (2) The excess for purposes of subparagraph (1) is the
1 15 amount by which the adjusted gross income plus interest and
1 16 dividends from securities which are exempt from federal income
1 17 tax less fifty percent of the amount in paragraph "a" exceed
1 18 the base amount. If there is no excess computed under this
1 19 subparagraph, this paragraph "b" does not apply to the
1 20 taxpayer.
1 21 c. For purposes of this subsection, "base amount" means
1 22 one of the following:
1 23 (1) Twenty-five thousand dollars, unless subparagraph (2)
1 24 or (3) applies.
1 25 (2) Thirty-two thousand dollars, in the case of a joint
1 26 return.
1 27 (3) Zero, if the taxpayer is married at the close of the
1 28 tax year, does not file a joint return, and does not live
1 29 apart from the spouse at all times during the tax year.
1 30 d. The amount in paragraph "a" not added back pursuant to
1 31 paragraph "b" shall be added back under this paragraph to the
1 32 extent of social security benefits received which are not
1 33 subject to state tax pursuant to calculations done under
1 34 subsection 13.
1 35 Sec. 2. This Act applies retroactively to January 1, 1995,
2 1 for tax years beginning on or after that date.
2 2 EXPLANATION
2 3 The bill exempts governmental and other pension benefits
2 4 made under a plan to which the employer or self-employed
2 5 person as an employer makes contributions from the state
2 6 individual income tax, except for an amount determined by a
2 7 formula similar to the formula used to determine the amount of
2 8 social security benefits included for state income tax
2 9 purposes. The formula is the lesser of 50 percent of the
2 10 pension benefits or 50 percent of the amount that the federal
2 11 adjusted gross income less 50 percent of the pension benefits
2 12 plus tax-exempt interest income exceeds a base amount. The
2 13 base amount is $25,000 unless it is a joint return where the
2 14 base amount is $32,000 or unless the taxpayer is married,
2 15 files a separate return, and does not live apart from the
2 16 spouse at all times, in which case the base amount is $0.
2 17 However, the amount computed is then reduced by the amount of
2 18 social security benefits received which have been excluded
2 19 from state income tax. The resulting amount is the amount of
2 20 the pension exclusion. The bill applies retroactively to
2 21 January 1, 1995, for tax years beginning on or after that
2 22 date.
2 23 LSB 2044HH 76
2 24 mg/sc/14
Text: HF00438 Text: HF00440 Text: HF00400 - HF00499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
Iowa General Assembly
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