Senate File 325 - Introduced SENATE FILE BY HAMERLINCK Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act increasing the amount of pension income that is exempted 2 from the 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 2465XS 83 6 tw/mg:sc/8 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 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 ofsixtwelve thousand dollars for a person, 1 16 other than a husband or wife, who files a separate state 1 17 income tax return and up to a maximum oftwelvetwenty=four 1 18 thousand dollars for a husband and wife who file a joint state 1 19 income tax return. However, a surviving spouse who is not 1 20 disabled or fifty=five years of age or older can only exclude 1 21 the amount of pension or retirement pay received as a result 1 22 of the death of the other spouse. A husband and wife filing 1 23 separate state income tax returns or separately on a combined 1 24 state return are allowed a combined maximum exclusion under 1 25 this subsection of up totwelvetwenty=four thousand dollars. 1 26 Thetwelvetwenty=four thousand dollar exclusion shall be 1 27 allocated to the husband or wife in the proportion that each 1 28 spouse's respective pension and retirement pay received bears 1 29 to total combined pension and retirement pay received. 1 30 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 1 31 retroactively to January 1, 2009, for tax years beginning on 1 32 or after that date. 1 33 EXPLANATION 1 34 Current law provides an exclusion from the individual 1 35 income tax for certain pension income. The exclusion is 2 1 available on the first $6,000 of an individual's pension 2 2 income and $12,000 for joint filers. 2 3 This bill doubles the amount of the exclusion to $12,000 2 4 for an individual filer and $24,000 for joint filers. 2 5 The bill applies retroactively to January 1, 2009, for tax 2 6 years beginning on or after that date. 2 7 LSB 2465XS 83 2 8 tw/mg:sc/8