Bills › 89th General Assembly
Relating to the exclusion of retirement income from the computation of the individual income tax including providing an exclusion for the federal civil service retirement system, and phasing in an exclusion of other retirement income, and including retroactive applicability provisions
Where it is now
- Done: IntroducedJanuary 11, 2021
- Done: SubcommitteeJanuary 13, 2021
- Stopped: Senate committeeDied when the General Assembly ended
- Next: Passes the Senate
- Next: House committee
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2022 session adjourned on May 24, 2022, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
AI summary People receiving retirement income from the federal civil service system would no longer have to pay Iowa income tax on those funds. The law gradually removes the tax on all other types of retirement income over a five-year period until it is completely tax-free starting in 2025. This change also affects how the state calculates whether a person needs to file a tax return.1
Read the official explanation
This bill relates to the exclusion of retirement income from the computation of net income for purposes of the individual income tax. The bill excludes from the individual income tax all retirement income received by an individual from the federal civil service retirement system and survivor benefits received from such system. The bill phases in over a five-year period the complete exclusion from the individual income tax of a taxpayer’s retirement income remaining after the exclusions referenced above. The percentage of this retirement income that is excluded for tax years beginning in 2021, 2022, 2023, and 2024, is percent, percent, percent, and percent, respectively. For tax years beginning in 2025 or later, 100 percent of a taxpayer’s retirement income will be excluded from the individual income tax.5, and further provides that any retirement income excluded from the individual income tax will not be added back to these calculations for tax years beginning in 2025 or later. The bill defines “retirement income” for purposes of the exclusion. Under current law, a taxpayer may exclude all retirement pay, including certain survivor benefits, received from the federal government for military service performed in the armed forces, the armed forces military reserve, or national guard. In addition, a taxpayer who is disabled, who is at least years of age, or who is the surviving spouse or other specified survivor of that qualifying taxpayer, may exclude a maximum of $6,000 of other retirement income ($12,000 for married couples). The bill applies retroactively to January 1, 2021, for tax years beginning on or after that date.
Senate subcommittee
Named January 13, 2021. It hasn’t reported yet.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Iowa Code it changes
Lobbying
2 for · 1 against · 8 undecided · Who →
Family tree
Tried before
89th General Assembly
Earlier and later bills are matched by wording or an identical title.
Tried before
This idea has been filed in an earlier General Assembly. None got through a chamber.
- SF 308 Relating to the exclusion of retirement income from the computation of the individual inco…88th General Assembly · In committee · same titleCleared committee
- SF 40 Providing an exemption from the computation of the individual income tax of certain amount…88th General Assembly · In committee · very similarCleared committee
- SSB 1186 SSB 118688th General Assembly · Subcommittee recommends passage · very similarCleared committee
Similar bills this General Assembly
- SF 195 Relating to the exclusion of retirement income from the computation of the individual inco…89th General Assembly · In committeeNearly identical
- SF 95 Providing an exemption from the computation of the individual income tax of certain amount…89th General Assembly · In committeeVery similar
- HF 2026 Exempting all retirement income from the individual income tax including retroactive appli…89th General Assembly · In committeeSimilar
Matched by wording or an identical title.