Bill Text: IA HF2638 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act excluding nonqualified deferred compensation income from the individual income tax, and including retroactive applicability provisions.(Formerly HF 2105.)
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2024-04-02 - Subcommittee: Schultz, Dawson, and Dotzler. S.J. 727. [HF2638 Detail]
Download: Iowa-2023-HF2638-Introduced.html
House
File
2638
-
Introduced
HOUSE
FILE
2638
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
HF
2105)
A
BILL
FOR
An
Act
excluding
nonqualified
deferred
compensation
income
1
from
the
individual
income
tax,
and
including
retroactive
2
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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2638
Section
1.
Section
422.7,
subsection
19,
paragraph
a,
Code
1
2024,
is
amended
to
read
as
follows:
2
a.
(1)
Subtract,
to
the
extent
included,
the
total
amount
3
received
from
a
governmental
or
other
pension
or
retirement
4
plan,
including
defined
benefit
or
defined
contribution
plans,
5
annuities,
individual
retirement
accounts,
plans
maintained
or
6
contributed
to
by
an
employer,
or
maintained
or
contributed
7
to
by
a
self-employed
person
as
an
employer,
and
deferred
8
compensation
plans
or
any
earnings
attributable
to
the
deferred
9
compensation
plans
received
by
a
person
who
is
disabled,
or
is
10
fifty-five
years
of
age
or
older,
or
is
the
surviving
spouse
of
11
an
individual
or
is
a
survivor
having
an
insurable
interest
in
12
an
individual
who
would
have
qualified
for
the
exemption
under
13
this
subsection
subparagraph
for
the
tax
year.
14
(2)
Subtract,
to
the
extent
included,
up
to
five
hundred
15
thousand
dollars
of
a
nonqualified
deferred
compensation
plan
16
or
any
earnings
attributable
to
the
nonqualified
deferred
17
compensation
plan
received
by
a
person
who
is
disabled,
or
is
18
fifty-five
years
of
age
or
older,
or
is
the
surviving
spouse
of
19
an
individual
or
is
a
survivor
having
an
insurable
interest
in
20
an
individual
who
would
have
qualified
for
the
exemption
under
21
this
subparagraph
for
the
tax
year.
22
Sec.
2.
RETROACTIVE
APPLICABILITY.
This
Act
applies
23
retroactively
to
January
1,
2024,
for
tax
years
beginning
on
24
or
after
that
date.
25
EXPLANATION
26
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
27
the
explanation’s
substance
by
the
members
of
the
general
assembly.
28
Under
current
law,
a
taxpayer
may
exclude
retirement
29
income
from
the
computation
of
net
income
for
purposes
of
30
the
individual
income
tax.
In
order
to
be
eligible
for
31
the
retirement
income
exclusion,
a
person
must
be
disabled,
32
at
least
55
years
of
age,
or
be
the
surviving
spouse
of
an
33
individual
or
be
a
survivor
having
an
insurable
interest
in
an
34
individual
who
would
have
qualified
for
the
retirement
income
35
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exclusion.
1
This
bill
excludes
up
to
$500,000
of
nonqualified
deferred
2
compensation
plan
income
from
the
computation
of
net
income
3
for
purposes
of
the
individual
income
tax
under
similar
4
circumstances
as
the
retirement
income
exclusion.
In
order
to
5
be
eligible
for
the
nonqualified
deferred
compensation
plan
6
income
exclusion,
the
taxpayer
must
be
disabled,
at
least
55
7
years
of
age,
or
be
the
surviving
spouse
of
an
individual
or
be
8
a
survivor
having
an
insurable
interest
in
an
individual
who
9
would
have
qualified
for
the
income
exclusion.
10
A
nonqualified
deferred
compensation
plan
is
deferred
11
compensation
with
no
federal
legal
deferral
limit
that
is
12
subject
to
tax
at
a
later
date,
and
is
usually
made
available
13
to
select
employees.
14
The
bill
applies
retroactively
to
January
1,
2024,
for
tax
15
years
beginning
on
or
after
that
date.
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