If you or your spouse receive a pension, annuity, self-employed retirement plan, deferred compensation, IRA distribution, or other retirement plan benefits, you may be eligible to exclude a portion of the taxable retirement income from Iowa income tax. Any taxable amounts transferred from an existing IRA to a Roth IRA must be included in net income and are eligible for this exclusion. Social Security benefits, railroad retirement benefits, and military retirement pay are not included.
For filing status Married Filing Jointly, Married Filing Separately on a Combined Return, or Married Filing Separately, the exclusion is the lesser of $12,000 or the taxable amount of the retirement income. For filing status Single, Head of Household, or Qualifying Widow(er), the exclusion is the lesser of $6,000 or the taxable amount of your retirement income.
To take this exclusion each spouse must determine their eligibility independent of the other and the pensioner or retirement income recipient must meet one of the following conditions: