House File 2529 - Introduced HOUSE FILE BY COMMITTEE ON VETERANS AFFAIRS (SUCCESSOR TO HF 133) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act exempting from the individual income tax federal 2 retirement pay received for military service and including a 3 retroactive applicability date provision. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6579HV 82 6 mg/sc/14 PAG LIN 1 1 Section 1. Section 422.7, Code Supplement 2007, is amended 1 2 by adding the following new subsection: 1 3 NEW SUBSECTION. 31A. a. Subject to paragraph "b", for a 1 4 taxpayer forty years of age or older, subtract, to the extent 1 5 included, retirement pay received from the federal government 1 6 for military service performed in the armed forces, armed 1 7 forces military reserve, or national guard. 1 8 b. The amount subtracted pursuant to paragraph "a" is 1 9 limited to the following: 1 10 (1) Five thousand dollars for the first tax year the 1 11 taxpayer claims the exclusion under this subsection. 1 12 (2) Ten thousand dollars for the second tax year the 1 13 taxpayer claims the exclusion under this subsection. 1 14 (3) Fifteen thousand dollars for the third tax year the 1 15 taxpayer claims the exclusion under this subsection. 1 16 (4) Twenty thousand dollars for the fourth tax year and 1 17 subsequent tax years the taxpayer claims the exclusion under 1 18 this subsection. 1 19 c. The exclusion of retirement benefits under this 1 20 subsection is in addition to any exclusion provided under 1 21 subsection 31. 1 22 Sec. 2. RETROACTIVE APPLICABILITY DATE. This Act applies 1 23 retroactively to January 1, 2008, for tax years beginning on 1 24 or after that date. 1 25 EXPLANATION 1 26 This bill provides for the exclusion of $20,000 of 1 27 retirement benefits from federal military service in the armed 1 28 forces, military reserve, or national guard, phased in over 1 29 four years. A taxpayer must be at least 40 years of age 1 30 before claiming the exclusion. 1 31 The bill applies retroactively to January 1, 2008, for tax 1 32 years beginning on or after that date. 1 33 LSB 6579HV 82 1 34 mg/sc/14