Tax Benefits


ATTENTION VETERANS/SPOUSES OF VETERANS

Military Property Tax Exemption

This benefit reduces a veteran’s assessed home value for property tax purposes by $1,852. In order to qualify, a service member must have served on active duty during a period of war or for a minimum of 18 months during peacetime. You only need to apply for this once on a property you own, and you can only apply this to one property not multiple.

Description: Reduces the taxable value of property for military veterans.

Eligibility: The amount of exemption varies. Must own the property on July 1 of each claim year.

Filing Requirements: A qualified veteran must file a claim with the local assessor by July 1. Subsequent claims need not be filed on the same property.  A DD214 must be included with your application or recorded in county recorders office.

Form:Application for military Exemption 54-146 (3/07/2017)

Its in the Iowa code Chapter 426 A : Husband and wife- In the event that husband and wife are both Honorably Discharged or honorably separated veterans and served during one of the prescribed time periods, They may BOTH apply their exemption to the property which they Jointly own, If the property is solely owned by one spouse the owner spouse may claim both exemptions.

Disabled Veteran’s Homestead Tax Credit

This recently-enacted legislation (2014) provides 100% exemption of property taxes for 100% disabled service-connected veterans and Dependency and Indemnity Compensation (DIC) recipients. On March 5, 2015 Governor Branstad signed in to law House File 166, an Act relating to the disabled veteran homestead tax credit.  The bill modifies eligibility criteria to include disabled veterans with permanent and total disability ratings based on individual un-employability paid at the 100% disability rate. You only need to apply for this once on a property you own, and you can only apply this to one property not multiple.

Description: Originally adopted to encourage home ownership for disabled veterans. The current credit is equal to 100% of the actual tax levy.

Eligibility: Veterans with 100% service-related disability status qualify for this credit.  Veterans also qualify who have a permanent and total disability rating based on individual un-employability paid at the 100% disability rate.  The veteran must own and occupy the property as a homestead on July 1 of each year, declare residency in Iowa for income tax purposes and occupy the property for at least six months each year. Persons in the military or nursing homes who do not occupy the home are also eligible.  A surviving spouse of a disabled veteran receiving DIC payments also qualifies. The surviving spouse as a beneficiary of the estate of a veteran who received the credit may continue to receive the credit as long as the spouse resides in the qualified homestead and does not remarry.

Filing Requirements: Claim must be filed on or before July 1. A current benefits paid letter, and a DD214 must be included with your application or recorded in county recorders office.

Form: Application for Disabled Veteran Homestead Tax 54-049a (5/11/2017)

                                                                   Iowa Homestead Tax Credit

Description: Originally adopted to encourage home ownership through property tax relief. The current credit is equal to the actual tax levy on the first $4,850 of actual value.

Eligibility: Must own and occupy the property as a homestead on July 1 of each year, declare residency in Iowa for income tax purposes and occupy the property for at least six months each year. Persons in the military or nursing homes who do not occupy the home are also eligible.

Filing Requirements: Claim must be filed on or before July 1. Claim is allowed for successive years without further filing as long as eligible.

Form: Homestead Tax Credit Application 54-028

CONTACT THE FLOYD COUNTY ASSESSOR’S OFFICE, OR THE FLOYD COUNTY VA OFFICE FOR FORMS OR ASSISTANCE.

 DD214'S NEED TO BE RECORDED IN THE COURTHOUSE OF THE COUNTY THE PROPERTY IS LOCATED. A RECENT LETTER FROM THE VA NEEDS TO STATE IF THE VETERAN IS 100% OR IF THE SPOUSE OF VET IS RECEIVING DIC.

 PLEASE DO NOT WAIT UNTIL THE LAST MINUTE TO SIGN UP IN CASE OTHER DOCUMENTATION NEEDS TO BE REQUESTED.

                                                                Military Retirement Tax Exemption

This recently-enacted legislation (2014) exempts federal retirement pay received for military service, and survivor benefits from state individual income tax.   

Military Retirement Benefits Exclusion from Iowa Income Tax

Legislation Enacted

Governor Branstad signed Senate File 303 on May 26, 2014, which provides for the exclusion of military retirement benefits from Iowa individual income tax retroactive to the tax year beginning on or after January 1, 2014. 

The exclusion also applies to military survivor benefits received under 10 U.S.C. 1447.  The exemption is available for both residents and nonresidents of Iowa. 

No Age Restriction for Military Retirement Benefits Exclusion 

The exemption is in addition to the general $6,000/$12,000 pension exclusion available for Iowa individual income tax for taxpayers 55 years of age or older.  

For example, if a married individual age 65 receives $20,000 in military retirement pay and $25,000 in pension income from John Deere, that individual will be able to exclude $32,000 ($20,000 plus $12,000) of pension income on their Iowa income tax return. 

Retroactive to January 1, 2014

Because the change is retroactive to January 1, 2014, individuals receiving military retirement benefits may immediately change or eliminate the amount of Iowa tax being withheld on their military pension. 

How to Change Military Pension Withholding

Contact DFAS at the following address:

Defense Finance and Accounting Service (DFAS)
US Military Retirement Pay
P.O. Box 7130
London, KY  40742-7130

DFAS can also be contacted toll free at 1-800-321-1080, and here is the link to the DFAS website http:www.dfas.mil

Filing Threshold and Alternative Tax Calculation

In addition, the military retirement pay, unlike other pension income, is not included in the calculation of the filing threshold to determine if a taxpayer has to file an Iowa income tax return, and it is not included in the calculation of the alternate tax for those taxpayers with income just above the filing threshold.  

The current filing threshold for Iowa individual income tax is $9,000 for single taxpayers under age 65, $13,500 for married taxpayers, head of households, or surviving spouses under age 65, $24,000 for single taxpayers age 65 or older, or $32,000 for married taxpayers, head of households, and surviving spouses age 65 or older.

                                        Iowa Elderly and Disabled Citizen's Rent Reimbursement

Description: Incorporated into the Homestead Tax Law to provide rent relief. Property that is tax-exempt does not qualify for rent reimbursement.

Eligibility: Must be 65 or older or total disabled, and meet annual household low-income requirements.

Filing Requirements: Renters must file with the Department of Revenue by June 1 to claim reimbursement for rent paid in the prior calendar year. The director or county treasurer may grant extensions of time to file.

Form: Iowa Rent Reimbursement Claim 54-130

IRS Form 1095-B Proof of Health Care Coverage

If youhave lost or need to request this form for tax purposes 

IRS Form1095-B “Health Coverage” (VA Healthcare)

Call1-877-222-VETS (8387) Monday through Friday from 8 a.m. until 8 p.m. Eastern.