Iowa HF961 exempts up to $500,000 from nonqualified deferred compensation plans from state income tax for certain individuals.

Iowa HF961 amends the state income tax code to exempt up to $500,000 of nonqualified deferred compensation plan income from the computation of net income. This exemption applies to individuals who are disabled, at least 55 years of age, or the surviving spouse of an individual who would have qualified for the retirement income exclusion. The bill also includes retroactive applicability provisions, making it effective for tax years beginning on or after January 1, 2025.

Iowa HF961 exempts up to $500,000 from nonqualified deferred compensation plans from state income tax for certain individuals.

Iowa HF961 amends the state income tax code to exempt up to $500,000 of nonqualified deferred compensation plan income from the computation of net income. This exemption applies to individuals who are disabled, at least 55 years of age, or the surviving spouse of an individual who would have qualified for the retirement income exclusion. The bill also includes retroactive applicability provisions, making it effective for tax years beginning on or after January 1, 2025.