Bill Text: IA SF485 | 2017-2018 | 87th General Assembly | Introduced

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Bill Title: A bill for an act increasing the amount of retirement income of certain taxpayers that is exempt from the individual income tax and including retroactive applicability provisions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-03-08 - Subcommittee: Feenstra, Dotzler, and Smith. S.J. 538. [SF485 Detail]

Download: Iowa-2017-SF485-Introduced.html

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Senate File 485 - Introduced




                                 SENATE FILE       
                                 BY  SMITH

                                      A BILL FOR

  1 An Act increasing the amount of retirement income of certain
  2    taxpayers that is exempt from the individual income tax and
  3    including retroactive applicability provisions.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN



  1  1    Section 1.  Section 422.7, subsection 31, Code 2017, 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, to the extent included, the
  1  8 total amount of a governmental or other pension or retirement
  1  9 pay, including, but not limited to, defined benefit or
  1 10 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 twelve thousand dollars for a person, other than
  1 16 a husband or wife, who files a separate state income tax return
  1 17 and up to a maximum of twelve twenty=four thousand dollars for
  1 18 a husband and wife who file a joint state income tax return.
  1 19 However, a surviving spouse who is not disabled or fifty=five
  1 20 years of age or older can only exclude the amount of pension or
  1 21 retirement pay received as a result of the death of the other
  1 22 spouse. A husband and wife filing separate state income tax
  1 23 returns or separately on a combined state return are allowed
  1 24 a combined maximum exclusion under this subsection of up to
  1 25 twelve twenty=four thousand dollars. The twelve twenty=four
  1 26  thousand dollar exclusion shall be allocated to the husband or
  1 27 wife in the proportion that each spouse's respective pension
  1 28 and retirement pay received bears to total combined pension and
  1 29 retirement pay received.
  1 30    Sec. 2.  RETROACTIVE APPLICABILITY.  This Act applies
  1 31 retroactively to January 1, 2017, for tax years beginning on
  1 32 or after that date.
  1 33                           EXPLANATION
  1 34 The inclusion of this explanation does not constitute agreement with
  1 35 the explanation's substance by the members of the general assembly.
  2  1 Under current law, a maximum of $6,000 of retirement income
  2  2 ($12,000 for married couples) is exempt from the individual
  2  3 income tax for a taxpayer who is disabled, who is at least 55
  2  4 years of age, or who is the surviving spouse or other specified
  2  5 survivor of that taxpayer.  This bill increases that exempt
  2  6 amount of retirement income to $12,000 ($24,000 for married
  2  7 couples).
  2  8    The bill applies retroactively to January 1, 2017, for tax
  2  9 years beginning on or after that date.
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