Who is eligible for the pension exclusion?
If you or your spouse receive a pension, annuity, self-employed retirement plan, deferred compensation, IRA or other retirement plan benefits, you may be eligible to exclude from Iowa income tax a portion of the retirement income that is taxable on your Federal return. Distributions on Roth IRA’s are exempt from income tax. Social Security benefits are not included. For filing status 2, 3, or 4, the exclusion is the lesser of $12,000 or the taxable amount of the retirement income. For filing status 1, 5, or 6, each eligible taxpayer can claim as an exemption the lesser of $6,000 or the taxable amount of his or her retirement income. To take this exclusion you must meet one of the following conditions: • You must be 55 years of age or older on December 31, or • disabled, or • a surviving spouse of an individual who would have qualified for the exclusion during the year.
If you or your spouse receive a pension, annuity, self-employed retirement plan, deferred compensation, IRA, or other retirement plan benefits, you may be eligible to exclude from Iowa income tax a portion of the retirement income that is taxable on your federal return. Distributions on Roth IRAs are exempt from income tax. Social Security benefits are not included. The exclusion can be up to $6,000 for individuals who file status 1, 5, or 6 and up to $12,000 for married taxpayers who file status 2, 3, or 4. If, for example, an individual has $5,000 in pension/retirement income, the exclusion will be the actual $5,000, not the maximum of $6,000. To take this exclusion you or your spouse must meet one of the following conditions: • You must be 55 years of age or older on December 31, or • disabled, or • a surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion during the year.
