Key Tax Facts: Iowa
- Iowa filing deadline is April 30, not April 15
- Flat 3.8% rate in 2025, phasing down to 3.5% by 2026
- Retirement income (pension, 401k, IRA) is fully exempt starting 2023
- Social Security exempt for most filers
Estimate Your 2026 Federal and Iowa State Income Tax
Iowa State Income Tax Overview
Iowa has a flat income tax rate of 3.8% for 2025, down significantly from prior years as the state phases in tax cuts through 2026. Iowa previously used a complex graduated system with many brackets, but reforms signed in 2022 are simplifying the system considerably. Iowa exempts Social Security income from state income tax and offers retirement income exemptions for qualifying taxpayers 55 and older. Since moving to a flat tax in 2025, Iowa uses the federal standard deduction - $15,750 for single filers and $31,500 for married couples filing jointly for tax year 2025. Iowa also permits deductions for federal income taxes paid under certain circumstances.
What Is Different About Iowa's Income Tax
Deductions and exemptions
Iowa moved to a single 3.8% rate for 2025 and largely follows the federal standard deduction. Itemizers use federal Schedule A amounts with state tax paid removed. The state eliminated its old deduction for federal income taxes paid when it restructured rates.
Credits worth knowing
Iowa's earned income credit is 15% of the federal credit, and the child and dependent care credit is available on a sliding scale for households under $90,000. Other credits cover tuition and textbooks, volunteer firefighters and EMS personnel, and taxes paid to other states.
Retirement, capital gains, and other income
Since tax year 2023 Iowa exempts all retirement income for taxpayers 55 and older, including pensions, annuities, 401(k) and IRA distributions, and Social Security was already exempt. Military retirement pay is exempt at any age. Capital gains are taxed at the flat rate, with a deduction for gains on qualifying Iowa farm or business property held ten years or more.
Rules summarized from the Iowa Department of Revenue guidance for tax year 2026. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Iowa Income Tax Rate (2026) projected
Iowa uses a flat income tax rate -- the same percentage applies to all taxable income regardless of how much you earn.
Source: Iowa Department of Revenue
What a Iowa Resident Actually Pays: A Worked Example
| Taxable Income | $65,000.00 |
| Iowa Flat Rate | 3.8% |
| Estimated State Tax | $2470.00 |
| Effective Rate | 3.8% |
Where Iowa Stands Among the 50 States
Iowa's top rate of 3.8% ranks #35 of the 41 states that tax wages -- among the ten lowest of the states that levy the tax at all. The median top rate across those 41 states is 5.2%, so Iowa is below the middle of the pack. It is one of 14 states with a single flat rate, so every taxable dollar is taxed at 3.8% and the effective rate never climbs with income the way it does in the 27 graduated-rate states.
On sales tax the picture is similar: Iowa's combined state and average local rate of 6.94% ranks #28 of 50, against a national median of 7.00%.
Iowa State Tax at Five Income Levels (2026, single filer)
| Taxable income | Iowa tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $1,520 | 3.80% | 3.8% |
| $65,000 | $2,470 | 3.80% | 3.8% |
| $100,000 | $3,800 | 3.80% | 3.8% |
| $150,000 | $5,700 | 3.80% | 3.8% |
| $250,000 | $9,500 | 3.80% | 3.8% |
Brackets applied directly to the taxable-income figure shown, before Iowa-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Iowa vs. Its Neighbors on $75,000 of Taxable Income
A Iowa resident with $75,000 of taxable income pays about $2,850 in state income tax. Of Iowa's 6 neighboring states, 1 would tax that income less and 5 would tax it more.
| State | Structure | Tax on $75,000 | Top rate | Sales tax |
|---|---|---|---|---|
| Iowa (you) | Flat | $2,850 | 3.8% | 6.94% |
| South Dakota | No income tax | $0 | None | 6.11% |
| Missouri | Rate to 4.7% | $3,349 | 4.7% | 8.28% |
| Nebraska | Rate to 5.2% | $3,422 | 5.2% | 6.94% |
| Wisconsin | Rate to 7.65% | $3,579 | 7.65% | 5.43% |
| Illinois | Rate to 4.95% | $3,713 | 4.95% | 8.82% |
| Minnesota | Rate to 9.85% | $4,628 | 9.85% | 7.49% |
Frequently Asked Questions -- Iowa Income Tax
Does Iowa have a state income tax?
Yes. Iowa imposes a state income tax with a flat rate of 3.8%. This is separate from your federal income tax obligation.
What is the Iowa income tax rate for 2026?
Iowa uses a flat income tax rate of 3.8% on all taxable income, regardless of income level or filing status.
Do I have to file a Iowa state tax return?
Most full-year Iowa residents with income above the state filing threshold must file a state return. Check the Iowa Department of Revenue for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2026 brackets and standard deduction. The Iowa figure applies the 2026 single-filer rate schedule to the same taxable income; it does not model Iowa-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the Iowa Department of Revenue or a tax professional before filing.
How does Iowa compare with nearby states?
On $75,000 of taxable income, Iowa collects about $2,850. South Dakota collects $0, Missouri collects $3,349, Nebraska collects $3,422, Wisconsin collects $3,579, Illinois collects $3,713, Minnesota collects $4,628. See the comparison table above.
Where does Iowa rank on state income tax?
Iowa's top rate of 3.8% ranks #35 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 6.94% ranks #28 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2026 federal income tax using the official IRS 2026 brackets, then applies the Iowa rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official Iowa tax forms?
Official forms, instructions, and filing guidance are available at the Iowa Department of Revenue.
What is the sales tax rate in Iowa?
Iowa's combined state and average local sales tax rate is 6.94%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Iowa 2026 state taxes due?
2026 taxes are generally filed in 2027. The Iowa filing deadline is April 30, 2027 -- note this differs from the federal deadline of April 15, 2027, so mark both dates.
Understanding Your Iowa Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Iowa state tax owed to the Iowa Department of Revenue. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 30. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Iowa Bill
Pre-tax retirement contributions reduce your federal and Iowa taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Iowa-specific credits and deductions that don't exist at the federal level are listed at the Iowa Department of Revenue -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Iowa's combined state-plus-average-local sales tax rate is 6.94%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Iowa Department of Revenue or a qualified tax professional for guidance specific to your situation.