Updated October 30, 2026. Quick answer: Yes, once you are 55 or disabled. Iowa Code 422.7 lets you subtract “total amount received from a governmental or other pension or retirement plan” if you are disabled or “Fifty-five years of age or older”. The statute does not name CSRS or FERS, so a federal annuity falls under the general governmental pension wording.
What Iowa does with a FERS or CSRS annuity
| Question | What the Iowa documents say |
|---|---|
| What the source says | Iowa Code 422.7 subsection 19 lets a taxpayer subtract the total received from a governmental or other pension or retirement plan if the person is disabled or at least 55, with no carve-out for federal civil service plans, so CSRS and FERS annuities fall within the general governmental pension language. |
| Amount or limit | The total amount received from a governmental or other pension or retirement plan, subtracted to the extent included in income, for a taxpayer who is disabled, at least fifty-five, or a qualifying surviving spouse or survivor. |
| Age or other test | Disabled, or fifty-five years of age or older, or the surviving spouse or a survivor with an insurable interest of a person who would have qualified. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Iowa documents’ own words
- “individual retirement accounts, plans maintained or contributed to by an employer” (Iowa Code 422.7 (2026), net income computation)
- “55 years of age or older on December 31” (Retirement Income Tax Guidance)
- “Qualified deferred compensation plans including those authorized under section 401(k)” (Retirement Income Tax Guidance)
How this differs from other pensions in Iowa
The statute does not single out federal civil service pensions; they are treated like other governmental and private pension or retirement plan income under the same subtraction. Federal military retirement pay gets a separate additional subtraction under subsection 20. See also Does Iowa tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The Department of Revenue guidance lists qualified deferred compensation plans, including 401(k) plans, and defined benefit plans among the distributions that qualify, but it does not name the Thrift Savings Plan. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the Iowa return
The subtraction sits in section 422.7 of the Iowa Code, the section that defines Iowa taxable income. The statute reads as a subtraction from federal income, to the extent the pension was included in it. The Department of Revenue guidance adds that the exclusion applies for tax years beginning on or after January 1, 2023, and that distributions from qualified 401(k) and defined benefit plans qualify.
Checks before you rely on this answer
- Check your age or disability status first, because the subtraction is written for a taxpayer who is disabled or at least 55. The Department of Revenue guidance counts age as of December 31 of the tax year.
- Subtract only the part of the annuity that is included in your federal income, as the statute says.
- If you and your spouse file separate Iowa returns, read how the statute splits the exclusion between you.
What the Iowa documents leave open
The Iowa IA 1040 instructions and the retirement income exclusion page at tax.iowa.gov returned errors, so no Iowa form line is given. Neither the Iowa Code nor the Department of Revenue guidance names CSRS, FERS or the Thrift Savings Plan, Iowa’s income tax rate was not read, and no 2026 return booklet exists yet.
Common mistakes
- Assuming a federal annuity is treated worse than a state pension. The statute covers a governmental or other pension and does not single out federal plans.
- Claiming the subtraction before the age or disability test is met. The statute applies to a person who is disabled or 55 or older, or to a qualifying survivor.
Related: Does Iowa tax pensions?, Iowa military retirement pay, Iowa retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- Iowa Code 422.7 (2026), net income computation: https://www.legis.iowa.gov/docs/code/422.7.pdf
- Retirement Income Tax Guidance: https://revenue.iowa.gov/taxes/tax-guidance/individual-income-tax/retirement-income-tax-guidance
Read from the state documents linked above on October 30, 2026. General information, not tax advice.