Print
Senate File 96 - IntroducedA Bill ForAn Act 1relating to the exclusion of certain retirement
2income from the calculation of net income, and including
3retroactive applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 422.7, subsection 31, Code 2021, is
2amended to read as follows:
331. a. For a person who is disabled, or is fifty-five years
4of age or older, or is the surviving spouse of an individual
5or a survivor having an insurable interest in an individual
6who would have qualified for the exemption exclusion under
7this subsection for the tax year, subtract, to the extent
8included, the total amount of a governmental or other pension
9or retirement pay, including, but not limited to, defined
10benefit or defined contribution plans, annuities, individual
11retirement accounts, plans maintained or contributed to by an
12employer, or maintained or contributed to by a self-employed
13person as an employer, and deferred compensation plans or any
14earnings attributable to the deferred compensation plans, up
15to a the maximum of six thousand dollars amount provided in
16paragraph “b” for a person, other than a husband or wife married
17person, who files a separate state income tax return, and up
18to a the maximum of twelve thousand dollars amount provided in
19paragraph “c” for a husband and wife married persons who file
20a joint state income tax return. However, a surviving spouse
21who is not disabled or fifty-five years of age or older can
22only exclude the amount of pension or retirement pay received
23as a result of the death of the other spouse. A husband and
24wife Married persons filing separate state income tax returns
25or separately on a combined state return are allowed a combined
26maximum exclusion under this subsection of up to twelve
27thousand dollars the maximum amount under paragraph “c”. The
28twelve thousand dollar exclusion under paragraph “c” shall be
29allocated to the husband or wife either married person in the
30proportion that each spouse’s respective pension and retirement
31pay received bears to total combined pension and retirement pay
32received.
33b. (1) (a) For a single person, other than married persons
34who file separately, the maximum amount of the exclusion under
35paragraph “a” shall be as follows:
-1- 1(i) For tax years beginning in the 2021 calendar year, seven
2thousand two hundred dollars.
3(ii) For tax years beginning in the 2022 calendar year,
4eight thousand four hundred dollars.
5(iii) For tax years beginning in the 2023 calendar year,
6nine thousand six hundred dollars.
7(iv) For tax years beginning in the 2024 calendar year, ten
8thousand eight hundred dollars.
9(b) This subparagraph is repealed January 1, 2025.
10(2) For a single person, other than married persons who file
11separately, the maximum amount of the exclusion under paragraph
12“a” for tax years beginning on or after January 1, 2025, shall
13be twelve thousand dollars.
14c. (1) (a) For married persons who file a joint state tax
15return, the maximum amount of the exclusion under paragraph “a”
16 shall be as follows:
17(i) For tax years beginning in the 2021 calendar year,
18fourteen thousand four hundred dollars.
19(ii) For tax years beginning in the 2022 calendar year,
20sixteen thousand eight hundred dollars.
21(iii) For tax years beginning in the 2023 calendar year,
22nineteen thousand two hundred dollars.
23(iv) For tax years beginning in the 2024 calendar year,
24twenty-one thousand six hundred dollars.
25(b) This subparagraph is repealed January 1, 2025.
26(2) For married persons who file a joint state tax return,
27the maximum amount of the exclusion under paragraph “a” for
28tax years beginning on or after January 1, 2025, shall be
29twenty-four thousand dollars.
30 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
31retroactively to January 1, 2021, for tax years beginning on
32or after that date.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-2- 1This bill relates to the exclusion of certain retirement
2income from the calculation of net income.
3Currently, a taxpayer who is disabled, who is at least 55
4years of age, or who is the surviving spouse or other specified
5survivor of that qualifying taxpayer may exclude a maximum
6of $6,000 of other retirement income ($12,000 for married
7couples).
8The bill phases in over a five-year period an increase to
9the retirement income exclusion referenced above. The base
10retirement income exclusion amount for single filers ($6,000)
11and married filers ($12,000) increases for tax years beginning
12in 2021, 2022, 2023, and 2024 by 20 percent, 40 percent, 60
13percent, and 80 percent, respectively. For tax years beginning
14in 2025 or later, the retirement income exclusion is $12,000
15for single filers and $24,000 for married filers.
16The bill does not affect the current exclusion of military
17retirement income.
18The bill applies retroactively to January 1, 2021, for tax
19years beginning on or after that date.
-3-jm/jh
2income from the calculation of net income, and including
3retroactive applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 422.7, subsection 31, Code 2021, is
2amended to read as follows:
331. a. For a person who is disabled, or is fifty-five years
4of age or older, or is the surviving spouse of an individual
5or a survivor having an insurable interest in an individual
6who would have qualified for the exemption exclusion under
7this subsection for the tax year, subtract, to the extent
8included, the total amount of a governmental or other pension
9or retirement pay, including, but not limited to, defined
10benefit or defined contribution plans, annuities, individual
11retirement accounts, plans maintained or contributed to by an
12employer, or maintained or contributed to by a self-employed
13person as an employer, and deferred compensation plans or any
14earnings attributable to the deferred compensation plans, up
15to a the maximum of six thousand dollars amount provided in
16paragraph “b” for a person, other than a husband or wife married
17person, who files a separate state income tax return, and up
18to a the maximum of twelve thousand dollars amount provided in
19paragraph “c” for a husband and wife married persons who file
20a joint state income tax return. However, a surviving spouse
21who is not disabled or fifty-five years of age or older can
22only exclude the amount of pension or retirement pay received
23as a result of the death of the other spouse. A husband and
24wife Married persons filing separate state income tax returns
25or separately on a combined state return are allowed a combined
26maximum exclusion under this subsection of up to twelve
27thousand dollars the maximum amount under paragraph “c”. The
28twelve thousand dollar exclusion under paragraph “c” shall be
29allocated to the husband or wife either married person in the
30proportion that each spouse’s respective pension and retirement
31pay received bears to total combined pension and retirement pay
32received.
33b. (1) (a) For a single person, other than married persons
34who file separately, the maximum amount of the exclusion under
35paragraph “a” shall be as follows:
-1- 1(i) For tax years beginning in the 2021 calendar year, seven
2thousand two hundred dollars.
3(ii) For tax years beginning in the 2022 calendar year,
4eight thousand four hundred dollars.
5(iii) For tax years beginning in the 2023 calendar year,
6nine thousand six hundred dollars.
7(iv) For tax years beginning in the 2024 calendar year, ten
8thousand eight hundred dollars.
9(b) This subparagraph is repealed January 1, 2025.
10(2) For a single person, other than married persons who file
11separately, the maximum amount of the exclusion under paragraph
12“a” for tax years beginning on or after January 1, 2025, shall
13be twelve thousand dollars.
14c. (1) (a) For married persons who file a joint state tax
15return, the maximum amount of the exclusion under paragraph “a”
16 shall be as follows:
17(i) For tax years beginning in the 2021 calendar year,
18fourteen thousand four hundred dollars.
19(ii) For tax years beginning in the 2022 calendar year,
20sixteen thousand eight hundred dollars.
21(iii) For tax years beginning in the 2023 calendar year,
22nineteen thousand two hundred dollars.
23(iv) For tax years beginning in the 2024 calendar year,
24twenty-one thousand six hundred dollars.
25(b) This subparagraph is repealed January 1, 2025.
26(2) For married persons who file a joint state tax return,
27the maximum amount of the exclusion under paragraph “a” for
28tax years beginning on or after January 1, 2025, shall be
29twenty-four thousand dollars.
30 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
31retroactively to January 1, 2021, for tax years beginning on
32or after that date.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-2- 1This bill relates to the exclusion of certain retirement
2income from the calculation of net income.
3Currently, a taxpayer who is disabled, who is at least 55
4years of age, or who is the surviving spouse or other specified
5survivor of that qualifying taxpayer may exclude a maximum
6of $6,000 of other retirement income ($12,000 for married
7couples).
8The bill phases in over a five-year period an increase to
9the retirement income exclusion referenced above. The base
10retirement income exclusion amount for single filers ($6,000)
11and married filers ($12,000) increases for tax years beginning
12in 2021, 2022, 2023, and 2024 by 20 percent, 40 percent, 60
13percent, and 80 percent, respectively. For tax years beginning
14in 2025 or later, the retirement income exclusion is $12,000
15for single filers and $24,000 for married filers.
16The bill does not affect the current exclusion of military
17retirement income.
18The bill applies retroactively to January 1, 2021, for tax
19years beginning on or after that date.
-3-jm/jh