Bills › 91st General Assembly
Relating to individual income taxation by exempting certain amounts received from nonqualified deferred compensation plans and including retroactive applicability provisions
Sponsored by Sen. David D. Rowley (R), Sen. Annette Sweeney (R)
Topics:Taxes
Where it is now
- Done: IntroducedJanuary 21, 2025
- Done: SubcommitteeFebruary 11, 2025
- Done: Senate committeeMarch 13, 2025
- Stopped: Passes the SenateDied when the General Assembly ended
- Next: House committeeFunnel: by March 20, 2026
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Died when the session ended The General Assembly adjourned on October 2, 2026. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
Under current law, a taxpayer may exclude retirement income from the computation of net income for purposes of the individual income tax. In order to be eligible for the retirement income exclusion, a person must be disabled, at least years of age, or be the surviving spouse of an individual or be a survivor having an insurable interest in an individual who would have qualified for the retirement income exclusion. This bill excludes up to $500,000 of nonqualified deferred compensation plan income from the computation of net income for purposes of the individual income tax under similar circumstances as the retirement income exclusion.
Read the full explanation
In order to be eligible for the nonqualified deferred compensation plan income exclusion, the taxpayer must be disabled, at least years of age, or be the surviving spouse of an individual or be a survivor having an insurable interest in an individual who would have qualified for the income exclusion. A nonqualified deferred compensation plan is deferred compensation with no federal legal deferral limit that is subject to tax at a later date, and is usually made available to select employees. The bill applies retroactively to January 1, 2025, for tax years beginning on or after that date.
From the explanation printed with the bill as introduced, written by the Legislative Services Agency. Amendments adopted later aren’t reflected. Full bill text
Senate subcommittee
Named February 11, 2025. 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
Fiscal note
The exemption in House File 961 is estimated to decrease revenue to the General Fund by the following amounts: • FY 2026 = $3.1 million • FY 2027 = $3.2 million • FY 2028 = $3.3 million • FY 2029 = $3.3 million • FY 2030 = $3.4 million • FY 2031 = $3.5 million The decrease in tax liability is also estimated to decrease the statewide local option income surtax for schools by the following amounts: • FY 2026 = $78,000 • FY 2027 = $80,000 • FY 2028 = $81,000 • FY 2029 = $83,000 • FY 2030 = $85,000 • FY 2031 = $87,000 3
- Nonqualified Deferred Compensation Plans, Income Tax Exclusion · March 21, 2025
Nonpartisan cost estimates from the Legislative Services Agency’s Fiscal Services Division. The newest is first. Reading a fiscal note
Iowa Code it changes
Amends§422.7
Read from the bill as introduced. Each links to every bill touching that chapter of the Iowa Code. How the Code works
Lobbying
2 for · 0 against · 6 undecided · Who →
Family tree
Where this legislation came from and where it went: earlier tries, the versions it moved through this Assembly, and later bills built on it.
Tried before
Earlier and later bills are matched by wording or an identical title; check the text to be sure it’s the same idea.
Tried before
This idea has been filed in an earlier General Assembly. None became law, though one got through a chamber.
- HF 2638 Excluding nonqualified deferred compensation income from the individual income tax, and in…90th General Assembly · Passed House · very similarPassed a chamber
Matched by the wording of each bill’s explanation, or an identical title. Companion bills and renumbered versions of this bill aren’t listed; they’re the same bill.