Senate File 303 S-5001 Amend Senate File 303 as follows: 1 1. Page 1, before line 1 by inserting: 2 < Section 1. Section 422.5, subsection 3, paragraph 3 a, Code 2014, is amended to read as follows: 4 a. The tax shall not be imposed on a resident or 5 nonresident whose net income, as defined in section 6 422.7 , is thirteen thousand five hundred dollars or 7 less in the case of married persons filing jointly 8 or filing separately on a combined return, heads of 9 household, and surviving spouses or nine thousand 10 dollars or less in the case of all other persons; 11 but in the event that the payment of tax under this 12 division would reduce the net income to less than 13 thirteen thousand five hundred dollars or nine thousand 14 dollars as applicable, then the tax shall be reduced to 15 that amount which would result in allowing the taxpayer 16 to retain a net income of thirteen thousand five 17 hundred dollars or nine thousand dollars as applicable. 18 The preceding sentence does not apply to estates or 19 trusts. For the purpose of this subsection , the entire 20 net income, including any part of the net income not 21 allocated to Iowa, shall be taken into account. For 22 purposes of this subsection , net income includes all 23 amounts of pensions or other retirement income , except 24 for military retirement pay excluded under section 25 422.7, subsection 31A, paragraph “a” , received from any 26 source which is not taxable under this division as a 27 result of the government pension exclusions in section 28 422.7 , or any other state law. If the combined net 29 income of a husband and wife exceeds thirteen thousand 30 five hundred dollars, neither of them shall receive 31 the benefit of this subsection , and it is immaterial 32 whether they file a joint return or separate returns. 33 However, if a husband and wife file separate returns 34 and have a combined net income of thirteen thousand 35 five hundred dollars or less, neither spouse shall 36 receive the benefit of this paragraph, if one spouse 37 has a net operating loss and elects to carry back or 38 carry forward the loss as provided in section 422.9, 39 subsection 3 . A person who is claimed as a dependent 40 by another person as defined in section 422.12 shall 41 not receive the benefit of this subsection if the 42 person claiming the dependent has net income exceeding 43 thirteen thousand five hundred dollars or nine thousand 44 dollars as applicable or the person claiming the 45 dependent and the person’s spouse have combined net 46 income exceeding thirteen thousand five hundred dollars 47 or nine thousand dollars as applicable. 48 Sec. ___. Section 422.5, subsection 3B, paragraph 49 a, Code 2014, is amended to read as follows: 50 -1- SF303.2401 (3) 85 mm/sc 1/ 3 #1.

a. The tax shall not be imposed on a resident or 1 nonresident who is at least sixty-five years old on 2 December 31 of the tax year and whose net income, 3 as defined in section 422.7 , is thirty-two thousand 4 dollars or less in the case of married persons 5 filing jointly or filing separately on a combined 6 return, heads of household, and surviving spouses or 7 twenty-four thousand dollars or less in the case of all 8 other persons; but in the event that the payment of 9 tax under this division would reduce the net income to 10 less than thirty-two thousand dollars or twenty-four 11 thousand dollars as applicable, then the tax shall be 12 reduced to that amount which would result in allowing 13 the taxpayer to retain a net income of thirty-two 14 thousand dollars or twenty-four thousand dollars as 15 applicable. The preceding sentence does not apply to 16 estates or trusts. For the purpose of this subsection , 17 the entire net income, including any part of the net 18 income not allocated to Iowa, shall be taken into 19 account. For purposes of this subsection , net income 20 includes all amounts of pensions or other retirement 21 income , except for military retirement pay excluded 22 under section 422.7, subsection 31A, paragraph “a” , 23 received from any source which is not taxable under 24 this division as a result of the government pension 25 exclusions in section 422.7 , or any other state law. 26 If the combined net income of a husband and wife 27 exceeds thirty-two thousand dollars, neither of them 28 shall receive the benefit of this subsection , and it 29 is immaterial whether they file a joint return or 30 separate returns. However, if a husband and wife file 31 separate returns and have a combined net income of 32 thirty-two thousand dollars or less, neither spouse 33 shall receive the benefit of this paragraph, if one 34 spouse has a net operating loss and elects to carry 35 back or carry forward the loss as provided in section 36 422.9, subsection 3 . A person who is claimed as a 37 dependent by another person as defined in section 38 422.12 shall not receive the benefit of this subsection 39 if the person claiming the dependent has net income 40 exceeding thirty-two thousand dollars or twenty-four 41 thousand dollars as applicable or the person claiming 42 the dependent and the person’s spouse have combined 43 net income exceeding thirty-two thousand dollars or 44 twenty-four thousand dollars as applicable. > 45 2. Page 1, line 1, by striking < 2013 > and inserting 46 < 2014 > 47 3. Page 1, line 4, by striking < resident > 48 4. Page 1, line 10, by striking < 2013 > and 49 inserting < 2014 > 50 -2- SF303.2401 (3) 85 mm/sc 2/ 3 #2. #3.