Effective January 1, 2023, Iowa taxpayers will catch a break on the state taxes paid on “retirement income”. The new law exempts Iowa taxation on all “retirement income” for those who are disabled or 55 years of age or older. It also exempts retirement income received by a surviving spouses.
Retirement income includes, but not limited, to:
- 401(k), 403(b) and Individual 401(k) Plan Distributions
- IRA Distributions
- Deferred Compensation Plans
- Pensions (Government and Private)
Client Note: For those of you that currently request withholding Iowa taxes from your IRA distributions there will be several conversations that will need to take place prior to year-end. First, you will want to share a discussion with your accountant to determine how this change will impact your tax return. Second, we will want to chat with you to confirm the discontinuation of state withholding from your IRA distribution in 2023 and beyond. If you would like to discuss additional details regarding how this change impacts you please give Cody, or any member of our Investment Management Group, a call to discuss.
Questions? Contact Cody at 563.388.2622.