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SF 201

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.

2025-2026 Regular Session Introduced by Dave Rowley and 1 co-sponsor

Bill SF 201 exempts certain nonqualified deferred compensation from income tax for disabled individuals, seniors, and surviving spouses, easing their tax burden retroactively from 2025.

Subcommittee: Schultz, Bisignano, and Dawson.
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Bill Summary · SF 201

Summary of Bill SF 201

Overview

Bill Number: SF 201
Title: 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.
Introduced: February 04, 2025
Current Status: Subcommittee: Schultz, Bisignano, and Dawson

Purpose and Intent

The primary purpose of Bill SF 201 is to amend the state’s individual income tax regulations by providing an exemption for specific amounts received from nonqualified deferred compensation plans. This change aims to alleviate the tax burden on eligible individuals receiving such compensation, particularly in circumstances related to retirement or disability.

Key Provisions

  • Exemption Criteria:

    • The bill allows for an income exclusion from nonqualified deferred compensation plans for taxpayers who meet certain criteria:
    • Individuals who are disabled.
    • Individuals who are at least 55 years of age.
    • Surviving spouses of individuals who would have qualified for the income exclusion.
    • Survivors with an insurable interest in an individual who would have qualified.

  • Definition of Nonqualified Deferred Compensation Plans:

    • These plans are defined as compensation arrangements that do not have a federal legal deferral limit and are typically available to select employees. Taxes on these amounts are deferred until a later date.

  • Retroactive Applicability:

    • The provisions of this bill will apply retroactively to January 1, 2025, affecting tax years beginning on or after this date.

Impact

  • Who is Affected:

    • The bill primarily impacts individuals receiving nonqualified deferred compensation who meet the specified criteria, including disabled individuals, older taxpayers, and surviving spouses or dependents.

  • Tax Implications:

    • Eligible individuals may benefit from reduced taxable income, potentially leading to lower overall tax liabilities.

Legislative Timeline

  • February 4, 2025: Bill introduced and referred to the Ways and Means Committee.
  • February 11, 2025: Assigned to the subcommittee consisting of Senators Schultz, Bisignano, and Dawson for further consideration.

Conclusion

Bill SF 201 seeks to provide tax relief for certain individuals receiving nonqualified deferred compensation by establishing specific eligibility criteria for income exclusion. With retroactive applicability, it aims to support taxpayers who may face financial challenges due to disability or age. The bill is currently under review by a subcommittee, with further discussions anticipated in the legislative process.

Compiled from official sources — confirm details with the bill’s official record.

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