A bill for an act relating to individual income taxation by exempting certain amounts received from nonqualified deferred compensation plans and including retroactive applicability provisions.

SF 201 exempts up to $500,000 of income from nonqualified deferred compensation plans (employer retirement plans for select employees) from Iowa's individual income tax for eligible individuals. It directly affects disabled people, those aged 55 or older, and surviving spouses with an insurable interest in a qualifying deceased person. The bill allows these taxpayers to exclude both the plan amount and its earnings from taxable income, mirroring existing retirement income exclusion rules. This exemption applies retroactively to tax years beginning on or after January 1, 2025.