What Is the Income Tax Rate in Iowa?
Navigate Iowa's individual income tax landscape. Get clarity on tax obligations, how income is assessed, and the process of meeting state requirements.
Iowa’s income tax system collects revenue at the state level to fund various public services, including education, infrastructure, and public safety. This state-level taxation is separate from federal income taxes. Understanding Iowa’s specific rules and rates is important for residents and individuals earning income within the state.
Iowa Individual Income Tax Rates
Iowa’s individual income tax system is transitioning. For the 2024 tax year, which is filed in 2025, Iowa utilizes a progressive tax system with three tax brackets. These rates vary based on income level and filing status, ranging from 4.4% to 5.7%. For single filers in 2024, the 4.4% rate applies to income up to $6,210, with higher rates for income exceeding $31,050.
A change is coming for the 2025 tax year, filed in 2026. Beginning January 1, 2025, Iowa will implement a flat tax rate of 3.8% for all levels of individual taxable income.
Calculating Your Iowa Taxable Income
Calculating your Iowa taxable income begins with your federal adjusted gross income (AGI). From this starting point, certain Iowa-specific adjustments, deductions, and exemptions are applied to arrive at the amount subject to state tax. Iowa no longer has a state-specific standard or itemized deduction as of the 2023 tax year; instead, it incorporates the federal standard or itemized deduction. For instance, the 2024 federal standard deduction is $14,600 for single filers or married individuals filing separately, $21,900 for heads of household, and $29,200 for married couples filing jointly or surviving spouses.
Additional deductions may apply, such as contributions to certain retirement accounts like 401(k)s and IRAs. Exemptions for taxpayers and dependents, such as a spouse or children, are also subtracted from AGI. After these deductions and exemptions, the resulting figure is your Iowa taxable income. Some school districts in Iowa also levy an income surtax, which is a percentage of the Iowa taxes paid, ranging from 0% to 20%.
Who Needs to File an Iowa Return
An individual needs to file an Iowa income tax return if they were a resident or part-year resident of Iowa during the tax year and meet certain income thresholds. For 2024, a single filer under 65 must file if their Iowa taxable income is more than $9,000, or $24,000 if they are 65 or older. If claimed as a dependent on another person’s Iowa return, a filing requirement exists if Iowa taxable income is $5,000 or more.
For married individuals filing jointly, head of household, or qualifying surviving spouse, a return is required if their Iowa taxable income is more than $13,500, or $32,000 if either spouse was 65 or older. Nonresidents and part-year residents must file if their net income from Iowa sources is $1,000 or more, or if they were subject to Iowa lump-sum tax or alternative minimum tax. Even if no tax is owed, filing may be necessary to claim a refund of Iowa tax withheld or to claim certain credits like the Iowa Earned Income Tax Credit.
Filing Your Iowa Income Tax Return
The Iowa income tax return for the 2024 tax year is due by April 30, 2025. This deadline provides additional time compared to the federal April 15 deadline. Taxpayers can submit their Iowa returns electronically through approved software or directly with the Iowa Department of Revenue. Paper filing is also an option, with returns needing to be postmarked by the due date.
Iowa automatically grants a six-month extension for filing personal income taxes, moving the deadline to October 31. However, this extension applies only to filing, not to payment; at least 90% of your estimated Iowa tax liability must be paid by the original April 30 deadline to avoid penalties. After filing, the anticipated time frame for refund processing is approximately 30 days, and taxpayers can check their refund status online.