House File 221 - Introduced HOUSE FILE 221 BY ALONS , HUSEMAN , J. SMITH , BRANDENBURG , and CHAMBERS A BILL FOR An Act excluding individual retirement account conversions from 1 the computation of net income and including retroactive 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1104YH (5) 84 tw/sc

H.F. 221 Section 1. Section 422.7, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 54. Subtract, to the extent included, the 3 income from a qualified rollover contribution. For purposes 4 of this subsection, “qualified rollover contribution” means 5 a distribution to which section 408A(d)(3) of the Internal 6 Revenue Code applies. 7 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 8 retroactively to January 1, 2011, for tax years beginning on 9 or after that date. 10 EXPLANATION 11 This bill excludes income from the conversion of certain 12 individual retirement plans from the individual income tax. 13 The federal Internal Revenue Code (IRC) provides certain 14 tax-advantaged retirement investment plans known as individual 15 retirement accounts (IRAs) and allows for the conversion from 16 one type of individual retirement account to another. The IRC 17 provides that such a conversion is includable in the taxpayer’s 18 gross income for purposes of the income tax. 19 The bill allows Iowa taxpayers to deduct such income for 20 purposes of the state individual income tax. 21 The bill applies retroactively to January 1, 2011, for tax 22 years beginning on or after that date. 23 -1- LSB 1104YH (5) 84 tw/sc 1/ 1