40 Exemption of active-duty military pay of national guard personnel and armed

forces reserve personnel received for services related to operation desert shield. For tax years ending on or after August 2, 1990, military pay received by persons in the national guard and persons in the armed forces military reserve is exempt from state income tax to the extent the military pay is not otherwise excluded from taxation and the military pay is for active-duty military service on or after August 2, 1990, pursuant to military orders related to Operation Desert Shield. The exemption applies to individuals called to active duty in Iowa to replace other persons who were in military units who were called to serve on active duty outside Iowa provided the military orders specify that the active duty assignment in Iowa pertains to Operation Desert Shield. Persons filing original returns or amended returns on Form IA 1040X for tax years where the exempt income was received should print the notation, “Operation Desert Shield” at the top of the original return form or amended return form. A copy of the military orders showing the person was called to active duty and was called in support of Operation Desert Shield should be attached to the original return form or amended return form to support the exemption of the active duty military pay. This rule is intended to implement Iowa Code section 422.7. Revenue[701] Ch 302, p.32 IAC 2/5/25 [Editorial change: IAC Supplement 11/2/22]