Senate File 2388 - Introduced



                                       SENATE FILE       
                                       BY  BOETTGER


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act exempting pension income and retirement pay from the state
  2    individual income tax and including a retroactive
  3    applicability date provision.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 6024XS 82
  6 sc/nh/5

PAG LIN



  1  1    Section 1.  Section 422.7, subsection 31, Code Supplement
  1  2 2007, is amended to read as follows:
  1  3    31.  For a person who is disabled, or is fifty=five years
  1  4 of age or older, or is the surviving spouse of an individual
  1  5 or a survivor having an insurable interest in an individual
  1  6 who would have qualified for the exemption under this
  1  7 subsection for the tax year, subtract, to the extent included,
  1  8 the total amount of a governmental or other pension or
  1  9 retirement pay, including, but not limited to, defined benefit
  1 10 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 For a husband and wife filing separate state
  1 23 income tax returns or separately on a combined state return
  1 24 are allowed a combined maximum exclusion under this subsection
  1 25 of up to twelve thousand dollars.  The twelve thousand dollar,
  1 26 the 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    Sec. 2.  RETROACTIVE APPLICABILITY DATE.  This Act applies
  1 31 retroactively to January 1, 2008, for tax years beginning on
  1 32 or after that date.
  1 33                           EXPLANATION
  1 34    This bill exempts all pension and retirement income, except
  1 35 for social security income, from the state individual income
  2  1 tax.  Under current law, the exemption for such income is
  2  2 $6,000 for individuals and $12,000 for a husband and wife
  2  3 filing jointly.
  2  4    The bill applies retroactively to January 1, 2008, for tax
  2  5 years beginning on or after that date.
  2  6 LSB 6024XS 82
  2  7 sc/nh/5