Bill Text: IA SF2109 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act exempting all retirement income from the individual income tax and including retroactive applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-02-14 - Fiscal note. [SF2109 Detail]
Download: Iowa-2017-SF2109-Introduced.html
Senate File 2109 - Introduced SENATE FILE BY CHAPMAN A BILL FOR 1 An Act exempting all retirement income from the individual 2 income tax and including retroactive applicability 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5985XS (1) 87 mm/jh PAG LIN 1 1 Section 1. Section 422.7, subsection 31, Code 2018, is 1 2 amended to read as follows: 1 3 31.For a person who is disabled, or is fifty=five years of 1 4 age or older, or is the surviving spouse of an individual or 1 5 a survivor having an insurable interest in an individual who 1 6 would have qualified for the exemption under this subsection 1 7 for the tax year, subtract,Subtract, to the extent included, 1 8 the total amount of a governmental or other pension or 1 9 retirement pay, including,but not limited to,defined benefit 1 10 or defined contribution plans, annuities, individual retirement 1 11 accounts, plans maintained or contributed to by an employer, 1 12 or maintained or contributed to by a self=employed person as 1 13 an employer, and deferred compensation plans or any earnings 1 14 attributable to the deferred compensation plans, up to a 1 15 maximum of six thousand dollars for a person, other than a 1 16 husband or wife, who files a separate state income tax return 1 17 and up to a maximum of twelve thousand dollars for a husband 1 18 and wife who file a joint state income tax return. However, a 1 19 surviving spouse who is not disabled or fifty=five years of age 1 20 or older can only exclude the amount of pension or retirement 1 21 pay received as a result of the death of the other spouse. A 1 22 husband and wife filing separate state income tax returns or 1 23 separately on a combined state return are allowed a combined 1 24 maximum exclusion under this subsection of up to twelve 1 25 thousand dollars. The twelve thousand dollar exclusion shall 1 26 be allocated to the husband or wife in the proportion that each 1 27 spouse's respective pension and retirement pay received bears 1 28 to total combined pension and retirement pay received. 1 29 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies 1 30 retroactively to January 1, 2018, for tax years beginning on 1 31 or after that date. 1 32 EXPLANATION 1 33 The inclusion of this explanation does not constitute agreement with 1 34 the explanation's substance by the members of the general assembly. 1 35 This bill relates to the exemption of retirement income from 2 1 the individual income tax. 2 2 Under current law, a taxpayer may exclude from the 2 3 computation of the individual income tax all retirement pay, 2 4 including certain survivor benefits, received from the federal 2 5 government for military service performed in the armed forces, 2 6 the armed forces military reserve, or national guard. In 2 7 addition, a taxpayer who is disabled, who is at least 55 years 2 8 of age, or who is the surviving spouse or other specified 2 9 survivor of that qualifying taxpayer, may exclude from the 2 10 computation of the individual income tax a maximum of $6,000 of 2 11 other retirement income ($12,000 for married couples). 2 12 The bill exempts all retirement income from individual 2 13 income tax. 2 14 The bill applies retroactively to January 1, 2018, for tax 2 15 years beginning on or after that date. LSB 5985XS (1) 87 mm/jh
