Hey everyone! It’s great to be back at the Capitol and the first week back was busy. I attended committee meetings and met with other Representatives and Senators. I also attended Governor Reynolds Condition of the State address in which she outlined some of her legislative priorities for the year. I am ready for a busy session and glad to be back in Des Moines to represent you all and all of Iowans.
– Tax Cuts for Retirees:
This week the governor made several tax-related recommendations in her annual State of the State address. The provisions reduce taxes on individual income, retirement income, and corporate income.
For individual income tax, the Governor recommends (beginning in tax year 2023) implementing four tax brackets ranging from 4.4 percent to 6.0 percent. After that, her plan eliminates the top rate annually until a 4 percent flat tax rate is achieved in tax year 2026.
Another change the Governor recommends is fully exempting retirement income. Her recommendation is that beginning in tax year 2023, Iowans age 55 and older would be exempt from state tax on retirement income earned from individual retirement account (IRA) distributions, taxable pensions, and annuities. Additionally, the Governor’s plan includes that beginning in tax year 2023, Iowa farmers 55 and older who farmed for at least 10 years but have retired from farming operations can elect an exemption of income from either cash rent or farm crop shares for all years the income is earned or elect one, lifetime election to exclude the net capital gains from the sale of farmland.
