3. Iowa: Complete Elimination of Retirement Income Taxes
Iowa transformed its retirement landscape by fully exempting pension income, 401(k) distributions, and IRA withdrawals. This statutory exemption applies to all residents aged 55 and older.
The state previously taxed retirement income at high marginal rates. Removing this tax entirely positions Iowa as one of the most competitive Midwestern destinations for seniors.
You do not need to meet complex income limits to claim this relief. If you meet the age criteria, your pension distributions are entirely exempt from Iowa state income tax.
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