This tax guidance describes what retirement income is eligible for the exclusion, who is eligible for the exclusion, and the withholding requirements for Iowa purposes on retirement income. Additionally, on February 20, 2023, Governor Kim Reynolds signed Senate File 181. The guidance was updated to address withholding requirements for distributions of retirement income for tax years beginning on or after January 1, 2023. It describes what retirement income is subject to withholding and what plan administrators and taxpayers should do if Iowa income tax was erroneously withheld on their retirement income distributions.
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