House Study Bill 224 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON SANDS) A BILL FOR An Act exempting from the computation of net income for the 1 individual state income tax all governmental or other 2 pension or retirement pay, and including effective date and 3 retroactive applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2481YC (2) 85 mm/sc

H.F. _____ Section 1. Section 422.7, subsection 31, Code 2013, is 1 amended to read as follows: 2 31. For a person who is disabled, or is fifty-five years of 3 age or older, or is the surviving spouse of an individual or 4 a survivor having an insurable interest in an individual who 5 would have qualified for the exemption under this subsection 6 for the tax year, subtract Subtract , to the extent included, 7 the total amount of a governmental or other pension or 8 retirement pay, including , but not limited to , defined benefit 9 or defined contribution plans, annuities, individual retirement 10 accounts, plans maintained or contributed to by an employer, 11 or maintained or contributed to by a self-employed person as 12 an employer, and deferred compensation plans or any earnings 13 attributable to the deferred compensation plans , up to a 14 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. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 29 immediate importance, takes effect upon enactment. 30 Sec. 3. RETROACTIVE APPLICABILITY. This Act applies 31 retroactively to January 1, 2013, for tax years beginning on 32 or after that date. 33 EXPLANATION 34 This bill exempts all governmental or other pension or 35 -1- LSB 2481YC (2) 85 mm/sc 1/ 2

H.F. _____ retirement pay from the individual income tax. “Governmental 1 or other pension or retirement pay” includes but is not limited 2 to defined benefit or defined contribution plans, annuities, 3 individual retirement accounts, plans maintained or contributed 4 to by an employer, or maintained or contributed to by a 5 self-employed person as an employer, and deferred compensation 6 plans or any earnings attributable to the deferred compensation 7 plans. 8 The bill takes effect upon enactment, and applies 9 retroactively to tax years beginning on or after January 1, 10 2013. 11 -2- LSB 2481YC (2) 85 mm/sc 2/ 2