Iowa discusses military retirement benefits

The Iowa Department of Revenue reminds personal income taxpayers that, beginning with 2014 taxes, military retirement benefits are excluded from Iowa income tax. If a taxpayer included military retirement pay in their federal adjusted gross income, it can be deducted from Iowa income for state income tax purposes. The exclusion also applies to military survivor benefits received under U.S.C. 1448 and the deduction is available for both residents and nonresidents of Iowa. Taxpayers should review their 2014 tax return and documentation to determine if they incorrectly included exempt military pay in their 2014 taxable Iowa income, if the taxpayer did they should file an amended 2014 Iowa income tax return as soon as possible using form IA 1040X. More tax information for veterans and those serving in the military and their spouses is available on the department’s website at (News, Iowa Department of Revenue, January 13, 2016.)

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