What is the Disability Income Exclusion?
You may exclude from your Iowa tax a portion of the disability pay you received in 2020 if you meet ALL of the following conditions:
- You received disability pay.
- Your federal adjusted gross income (AGI) is below $20,200, or married taxpayers' combined AGI is below $25,400 when both spouses are retired, under 65, and disabled.
- You were not yet 65 when the tax year ended.
- You retired on disability and were totally and permanently disabled when you retired.
- On January 1, 2020, you had not yet reached the age when your employer's retirement program would have required you to retire.
- You took the exclusion in a prior year and you didn't elect to treat disability income as a pension for federal purposes.
- You were married at the end of the tax year and filed a joint federal income tax return for the year unless you didn't live with your spouse at any time during the year.
To determine the amount of disability to exclude, complete Form IA 2440
. Form IA 2440
includes a doctor's statement attesting to the taxpayer's complete and permanent disability that must be signed by a physician. If you e-file
your Iowa return, keep Form IA 2440
for your records. Form IA 2440
only needs to be sent to the Iowa Department of Revenue if they request it. If you are unable to successfully e-file your Iowa return, attach Form IA 2440
to your printed Iowa return and mail it to the Iowa Department of Revenue.