Senate File 166 - Introduced





                                       SENATE FILE       
                                       BY  BARTZ


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

                                      A BILL FOR

  1 An Act exempting from the income tax a portion of the retirement
  2    pay of certain military retirees and including a retroactive
  3    applicability date provision.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 1757XS 83
  6 tw/mg:sc/5

PAG LIN



  1  1    Section 1.  Section 422.7, subsection 31, Code 2009, is
  1  2 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 retired from service in the armed
  1  5 forces of the United States, the national guard, or the armed
  1  6 forces military reserve and is receiving a full pension for
  1  7 such service, or is the surviving spouse of an individual or a
  1  8 survivor having an insurable interest in an individual who
  1  9 would have qualified for the exemption under this subsection
  1 10 for the tax year, subtract, to the extent included, the total
  1 11 amount of a governmental or other pension or retirement pay,
  1 12 including, but not limited to, defined benefit or defined
  1 13 contribution plans, annuities, individual retirement accounts,
  1 14 plans maintained or contributed to by an employer, or
  1 15 maintained or contributed to by a self=employed person as an
  1 16 employer, and deferred compensation plans or any earnings
  1 17 attributable to the deferred compensation plans, up to a
  1 18 maximum of six thousand dollars for a person, other than a
  1 19 husband or wife, who files a separate state income tax return
  1 20 and up to a maximum of twelve thousand dollars for a husband
  1 21 and wife who file a joint state income tax return.  However, a
  1 22 surviving spouse who is not disabled or fifty=five years of
  1 23 age or older can or is not receiving a full military pension
  1 24 may only exclude the amount of pension or retirement pay
  1 25 received as a result of the death of the other spouse.  A
  1 26 husband and wife filing separate state income tax returns or
  1 27 separately on a combined state return are allowed a combined
  1 28 maximum exclusion under this subsection of up to twelve
  1 29 thousand dollars.  The twelve thousand dollar exclusion shall
  1 30 be allocated to the husband or wife in the proportion that
  1 31 each spouse's respective pension and retirement pay received
  1 32 bears to total combined pension and retirement pay received.
  1 33    Sec. 2.  RETROACTIVE APPLICABILITY DATE.  This Act applies
  1 34 retroactively to January 1, 2009, for tax years beginning on
  1 35 or after that date.
  2  1                           EXPLANATION
  2  2    This bill makes retirees from the armed forces, the
  2  3 national guard, and the armed forces military reserve eligible
  2  4 for an exemption from the individual income tax if they are
  2  5 receiving a full pension for their service.  The maximum
  2  6 amount of the exemption, which includes other pensions or
  2  7 retirement benefits received, is $6,000 for individuals and
  2  8 $12,000 for married couples.
  2  9    The bill applies retroactively to January 1, 2009, for tax
  2 10 years beginning on or after that date.
  2 11 LSB 1757XS 83
  2 12 tw/mg:sc/5