Updated October 19, 2026. Quick answer: Line 7 of Iowa’s Schedule 1 is where IRA, pension and railroad retirement income is excluded from Iowa income. The expanded instructions say who qualifies by age, disability or survivor status and list the plans that count and the ones that do not. The amount goes in the subtractions column of Schedule 1 and flows into Iowa taxable income.
What this form does
Schedule 1 of the IA 1040 reports changes to federal income. The expanded instructions say “Schedule 1 is used to report Iowa modifications to federal taxable income.” Line 7 carries the retirement exclusion, under the heading “Line 7: IRA/Pension/Railroad Retirement Income”.
The instructions open the line with “If you or your spouse receive federal taxable income from a governmental or other pension or retirement plan you may be eligible to exclude that amount from your Iowa income.” For how the state treats retirees overall, see Iowa retirement taxes and whether Iowa taxes pensions.
Who it applies to
The instructions say “To take this exclusion, the income recipient must meet one of the following conditions:” The first is “55 years of age or older on December 31, 2025, or”, the second is “Disabled, or” and the third is “A surviving spouse or a survivor having an insurable interest in an individual who would have qualified for the exclusion in 2025 on the basis of age or disability.”
The fourth condition is for protection occupations: “A surviving spouse who receives amounts from a deceased spouse’s pension, regardless if the deceased spouse was 55 years of age or older or disabled, if the pension was from employment in a protection occupation, or as a sheriff, deputy sheriff, firefighter, or police officer.”
The lines, one by one
| Line | What the form says |
|---|---|
| Line 7 heading | “Line 7: IRA/Pension/Railroad Retirement Income” |
| Line 7, the rule | “If you or your spouse receive federal taxable income from a governmental or other pension or retirement plan you may be eligible to exclude that amount from your Iowa income.” |
| Line 7, IRA | “Distributions from individual retirement plans (IRA) authorized under section 408 of the Internal Revenue Code (IRC)” |
| Line 7, SEP, SIMPLE, Keogh | “Distributions from a simplified employee pension (SEP) plan”; “Distributions from a savings incentive match plan for employees (SIMPLE) retirement plan”; “Distributions from a Keogh plan” |
| Line 7, pension plans | “Distributions from qualified pension plans as described in Treasury Regulation” “including IPERS” |
| Line 7, Roth conversion | “Roth conversion income” |
| Line 7, 401(k), 403(b), 457(b) | “Distributions from qualified deferred compensation plans governed by the Employee Retirement Income Securities Act (ERISA) including a 401(k), 403(b), and 457(b) plan” |
| Line 7, annuities | “Annuity distributions pursuant to IRC section 402(a).” |
| Line 7, railroad retirement | “Include in this deduction the total amount of railroad retirement income that is included in federal taxable income regardless of age or disability status.” |
| Line 7, not eligible | “Distributions from the following plans are not eligible for the retirement income exclusion:” “Nonqualified deferred compensation plans”; “Nonqualified annuities” |
The IA 1040 form itself is not reproduced here, so these rows are the instruction text for line 7. For a 401(k) or IRA distribution reported on Form 1040 lines 4a and 4b or Form 1040 lines 5a and 5b, Iowa treatment of 401(k) and IRA withdrawals has more detail.
Where the result goes next
The instructions explain the columns on Schedule 1: “Column A should be used to report additions to federal taxable income and Column B should be used to report subtractions from federal taxable income.” “Report all amounts as a positive number.”
The net of Schedule 1 then goes to the main return. The instructions for line 3 say “Enter amount from IA 1040, Schedule 1, line 21.” and for line 4 “Add lines 2 and 3.”
Edition and line numbers
This page reads the 2025 IA 1040 Expanded Instructions for tax year 2025, the current file the Iowa Department of Revenue served on 2026-10-19. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Excluding a nonqualified annuity. The instructions list it as not eligible: “Nonqualified annuities”.
- Excluding amounts that never reached federal income. The rule applies to “federal taxable income from a governmental or other pension or retirement plan”.
- Putting a subtraction in column A. The instructions say “Column B should be used to report subtractions from federal taxable income.”
Related: Iowa retirement taxes, whether Iowa taxes pensions, Iowa treatment of 401(k) and IRA withdrawals, Form 1040 lines 4a and 4b, and Form 1040 lines 5a and 5b.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about retirement tax planning
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with Iowa retirement income taxes
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 IA 1040 Expanded Instructions, Iowa Department of Revenue: revenue.iowa.gov
- Related official page (not quoted): Iowa Department of Revenue, Retirement Income Tax Guidance: revenue.iowa.gov
Read from the state revenue documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.