HOUSE FILE 229

BY  CHAMBERS

A BILL FOR

An Act excluding from the computation of net income military retirement benefits of certain retired veterans and including retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 422.7, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  41.  Subtract, to the extent included, the amount of military retirement benefits received by a retired veteran. For purposes of this subsection, “retired veteran” means a person who has performed active duty military service in the United States armed forces, armed forces military reserve, or national guard and who performed such service for a period of twenty years or more.
   Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2011, for tax years beginning on or after that date.
EXPLANATION
   This bill provides an exclusion from the computation of net income (also known as an above-the-line deduction) for the military retirement benefits received by retired veterans. To qualify for the deduction, a taxpayer must have performed active duty military service in the United States armed forces, armed forces military reserve, or national guard and have performed such service for a period of twenty years or more.
   The bill applies retroactively to January 1, 2011, for tax years beginning on or after that date.