Eight years ago, Iowa began phasing out its tax on Social Security benefits.
In 2015, the phase-out will be complete and the Social Security checks of Iowans will no longer be taxed.
Reported by the Quad City Times:
No longer will Iowa seniors pay state taxes on their Social Security income.
For eight years the state has been gradually phasing out its tax on Social Security benefits. Starting in 2015, the tax is eliminated. Iowa seniors will see the effect when they file their taxes this year.
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The state Social Security income tax phase-out was signed into law in 2006 as part of a $118 million tax cut. It was negotiated by then-Gov. Tom Vilsack and a split-control Legislature.
“We have a responsibility to our seniors to ensure that they can live out their years with dignity and in economic security,” Vilsack said when the bill was signed into law. “By signing this legislation, we take further steps to continue our work on behalf of older Iowans and improve their independence and quality of life.”
Starting the ensuing year, the portion of Social Security income subject to state taxes gradually decreased until it hit zero in the 2014 tax year.
Rep. Tom Sands, R-Wapello, said at the eight-year phase-out seemed like a long time.
“But here it is now,” Sands said. “It was absolutely the right thing to do, because Iowa should not be taxing seniors for their Social Security income.”
State officials estimate that the elimination of the tax will save seniors between $200 and $700 annually.
