Senate File 376 - Introduced
SENATE FILE
BY TINSMAN
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing an additional exclusion from pension or
2 retirement income for certain taxpayers for purposes of the
3 state and individual income tax and providing a retroactive
4 applicability date.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 1319XS 81
7 sc/pj/5
PAG LIN
1 1 Section 1. Section 422.7, subsection 31, Code 2005, is
1 2 amended to read as follows:
1 3 31. a. For a person who is disabled, or is fifty=five
1 4 years of age or older, or is the surviving spouse of an
1 5 individual or a survivor having an insurable interest in an
1 6 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 or retirement pay, including, but not limited to, defined
1 10 benefit or defined contribution plans, annuities, individual
1 11 retirement accounts, plans maintained or contributed to by an
1 12 employer, or maintained or contributed to by a self=employed
1 13 person as an employer, and deferred compensation plans or any
1 14 earnings attributable to the deferred compensation plans, up
1 15 to a maximum of six thousand dollars for a person, other than
1 16 a husband or wife, who files a separate state income tax
1 17 return and up to a maximum of twelve thousand dollars for a
1 18 husband and wife who file a joint state income tax return.
1 19 However, a surviving spouse who is not disabled or fifty=five
1 20 years of age or older can only exclude the amount of pension
1 21 or retirement pay received as a result of the death of the
1 22 other spouse. A husband and wife filing separate state income
1 23 tax returns or separately on a combined state return are
1 24 allowed a combined maximum exclusion under this subsection of
1 25 up to twelve thousand dollars. The twelve thousand dollar
1 26 exclusion shall be allocated to the husband or wife in the
1 27 proportion that each spouse's respective pension and
1 28 retirement pay received bears to total combined pension and
1 29 retirement pay received.
1 30 b. In addition to the exclusion in paragraph "a", for a
1 31 person described in paragraph "a" who claims for the tax year
1 32 a dependent who is younger than eighteen years of age,
1 33 subtract up to a maximum of four thousand dollars for a
1 34 person, other than a husband and wife, who files a separate
1 35 state income tax return and up to a maximum of eight thousand
2 1 dollars for a husband and wife who file a joint state income
2 2 tax return. A husband and wife filing separate state income
2 3 tax returns or separately on a combined state return shall
2 4 allocate to the husband and wife the additional exclusion
2 5 allowed in this paragraph in the proportion that each spouse's
2 6 respective pension and retirement pay received bears to total
2 7 combined pension and retirement pay received.
2 8 For purposes of this paragraph, "dependent" means a child,
2 9 adopted child, or stepchild of the taxpayer's child, adopted
2 10 child, or stepchild.
2 11 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
2 12 retroactively to January 1, 2005, for tax years beginning on
2 13 or after that date.
2 14 EXPLANATION
2 15 Current law allows a person who is disabled, or is 55 years
2 16 of age or older, or is the surviving spouse of such a person
2 17 to exclude up to $6,000 (single filer) or $12,000 (married
2 18 filers) of pension or retirement pay received in the tax year.
2 19 This bill allows an additional exclusion of pension or
2 20 retirement pay in the amount of $4,000 (single filer) or
2 21 $8,000 (married filers) if the person claims for a tax year a
2 22 dependent who is younger than 18 years of age.
2 23 The bill provides that "dependent" means a child, adopted
2 24 child, or stepchild of the taxpayer's child, adopted child, or
2 25 stepchild.
2 26 The bill applies retroactively to January 1, 2005, for tax
2 27 years beginning on or after that date.
2 28 LSB 1319XS 81
2 29 sc:rj/pj/5.1