House Study Bill 228 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act increasing the exclusion from the calculation of 1 net income for pensions and other retirement benefits, 2 increasing the eligible age for the exclusion, and including 3 retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2701YC (5) 84 tw/sc
H.F. _____ Section 1. Section 422.7, subsection 31, Code 2011, is 1 amended to read as follows: 2 31. For a person who is disabled, or is fifty-five 3 sixty-five years of age or older, or is the surviving spouse 4 of an individual or a survivor having an insurable interest 5 in an individual who would have qualified for the exemption 6 under this subsection for the tax year, subtract, to the extent 7 included, the total amount of a governmental or other pension 8 or retirement pay, including , but not limited to , defined 9 benefit or defined contribution plans, annuities, individual 10 retirement accounts, plans maintained or contributed to by an 11 employer, or maintained or contributed to by a self-employed 12 person as an employer, and deferred compensation plans or any 13 earnings attributable to the deferred compensation plans , up 14 to a maximum of six thousand dollars for a person, other than a 15 husband or wife, who files a separate state income tax return 16 and up to a maximum of twelve thousand dollars for a husband 17 and wife who file a joint state income tax return. However, a 18 surviving spouse who is not disabled or fifty-five years of age 19 or older can only exclude the amount of pension or retirement 20 pay received as a result of the death of the other spouse. A 21 husband and wife filing separate state income tax returns or 22 separately on a combined state return are allowed a combined 23 maximum exclusion under this subsection of up to twelve 24 thousand dollars. The twelve thousand dollar exclusion shall 25 be allocated to the husband or wife in the proportion that each 26 spouse’s respective pension and retirement pay received bears 27 to total combined pension and retirement pay received . 28 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 29 retroactively to January 1, 2011, for tax years beginning on 30 or after that date. 31 EXPLANATION 32 This bill increases the amount of the income exclusion for 33 governmental or other pension or retirement pay to the full 34 amount of such benefits includable in income for state tax 35 -1- LSB 2701YC (5) 84 tw/sc 1/ 2
H.F. _____ purposes and raises the age at which the exclusion is available 1 from 55 years of age to 65 years of age. 2 The bill applies retroactively to January 1, 2011, for tax 3 years beginning on or after that date. 4 -2- LSB 2701YC (5) 84 tw/sc 2/ 2