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