- Most IPERS benefits are subject to federal income tax. IPERS withholds according to your Form W-4P and mails a Form 1099-R by January 31.Member Handbook (2025), p. 56, Taxation; IPERS web page Tax Information
- From tax year 2023, Iowa excludes retirement income, IPERS included, from state income tax if you are 55 or older on December 31, disabled, or a qualifying surviving spouse or survivor.Iowa Dept. of Revenue, Retirement Income Tax Guidance (Mar. 13, 2025); Member Handbook (2025), p. 56
- Your IPERS contributions come out before federal and Iowa income tax, so you don't pay income tax on that money until you receive it as benefits.Member Handbook (2025), p. 12, Pretax Contributions
- Nonresidents may ask IPERS to withhold Iowa tax from a refund. Every IPERS lump-sum application includes IPERS's Special Tax Notice Regarding Plan Payments.Member Handbook (2025), p. 56, Lump-Sum Distributions
- A spouse who receives a lump-sum death benefit faces the same federal and Iowa withholding rules as a member. Other beneficiaries may be able to exempt part of it from Iowa income tax.Member Handbook (2025), p. 56, Lump-Sum Distributions
- A spouse or former spouse can roll the taxable part of a lump-sum death benefit into a traditional IRA or an eligible retirement plan and keep it tax-deferred. Other beneficiaries can roll over only to an inherited IRA.Member Handbook (2025), p. 55, Rollovers
Iowa's retirement income exclusion
From tax year 2023, retirement income, expressly including IPERS, is excluded from Iowa taxable income for taxpayers 55 or older on Dec. 31 of the tax year, disabled, or a qualifying surviving spouse/survivor. Plan administrators need not withhold Iowa tax for qualifying recipients; for others the rate is 3.8% or the withholding tables. Iowa Dept. of Revenue, Retirement Income Tax Guidance (Mar. 13, 2025); Member Handbook (2025), p. 56 (benefits are excluded from Iowa income taxes under certain conditions)
IPERS does not withhold Iowa income tax for retirees who are not Iowa residents. Member Handbook (2025), p. 56, Monthly Benefits
Federal tax
Most IPERS benefits are subject to federal income tax; IPERS withholds per your Form W-4P and mails Form 1099-R by Jan. 31. Member Handbook (2025), p. 56, Taxation; IPERS web page Tax Information
Lump sums and refunds
Taxable lump sums not rolled over: 20% mandatory federal withholding; Iowa residents 3.8% Iowa withholding unless exempt. Member Handbook (2025), p. 28, Lump-Sum Distributions
Your contributions are pretax
Member contributions are tax-deferred for federal income tax (since Jan. 1, 1995) and Iowa income tax (since Jan. 1, 1999), but are subject to FICA. Member Handbook (2025), p. 12, Pretax Contributions
| IPERS's example | Amount |
|---|---|
| Covered wages | $45,000 |
| Your contribution (6.29%) | $2,830.50 |
| Your employer's (9.44%)not part of your pay | $4,248.00 |
| Wages for income tax | $42,169.50 |
IPERS shows $42,169.50 of taxable wages at the 6.29% rate. Member Handbook (2025), p. 12, Example: Pretax Contributions This is general information from IPERS and the Iowa Department of Revenue, not tax advice.
See also Social Security and Leaving: refund or wait?
Common questions
Is my IPERS pension taxed by Iowa?
From tax year 2023, Iowa excludes retirement income, IPERS included, if you're 55 or older on December 31, disabled, or a qualifying surviving spouse or survivor.
Is IPERS taxed by the federal government?
Most IPERS benefits are subject to federal income tax. IPERS withholds according to your Form W-4P and mails a Form 1099-R by January 31.
Source: IPERS Member Handbook, Updated July 2025, pp. 12, 28, 55, 56. Also: IPERS web pages; Iowa Dept. of Revenue, Retirement Income Tax Guidance (2025). Last reviewed .