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Taxable Pensions and Annuities

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Line: 
9
Step: 
Step 5
Step Subject: 
Gross Income
Year: 
2016

The same amounts of pensions and annuities are taxable for Iowa as are taxable for federal, with the exception of military retirement pay. Retirement pay for military service in the United States Armed Forces, the Armed Forces Military Reserve, or the National Guard is eligible for exemption from Iowa income tax and is not included on line 9, without regard for age or disability. The Army, Navy, Air Force, Marine Corps, and Coast Guard make up the Armed Forces.  Only military retirement pay received from the Defense Finance and Accounting Service (DFAS), or a similar source, is eligible for the exemption.  Retirement pay received from other sources, including the Office of Personnel Management (OPM), does not qualify for the exemption. In particular, retirement pay resulting from participation in the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS) does not qualify for the exemption.

For more details, see Iowa Administrative Rule 701-40.80.

State or Local Government Employee

If you are a state or local government employee who retired after December 31, 1994, your taxable pensions and annuities on your Iowa return may be different than on your federal return. In these cases, see the 1099-R issued by Iowa Public Employees Retirement System (IPERS), for the taxable amount.

Railroad Retirement Benefits

Railroad Retirement benefits paid by the Railroad Retirement Board are not taxable on the Iowa return. These benefits should not be included on this line.

Pension / Retirement Income Exclusion

The pension / retirement income exclusion is not taken on this line. Qualified taxpayers will take the pension / retirement income exclusion on line 21 of the IA 1040.

Married Separate Filers:

The taxable portion of pensions and annuities is reported by the spouse who received the income.

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