Does Iowa have a state income tax?

Yes. Iowa has a state income tax with a top rate of 3.8%.

How much is Iowa state tax on a $100,000 salary?

On a $100,000 salary in Iowa, state income tax is approximately $3,188. Your estimated total take-home pay is $75,992/year.

What other taxes does Iowa have?

Iowa has a 6% state sales tax with local surtaxes bringing the effective rate to around 6–7%. Property taxes are relatively high — averaging 1.4–1.6% of assessed value. Iowa exempts most Social Security benefits and some retirement income from state tax.

How does Iowa compare to other states for taxes?

Iowa's top rate of 3.8% compares favorably — below the national median for state income taxes.

What is Iowa's income tax rate in 2026?

Iowa landed at a flat 3.8% rate in tax year 2026 — the endpoint of HF 2317's multi-year phase-down from 9 brackets and an 8.53% top rate (2022). Among the lowest flat rates in the country, alongside North Carolina (3.99%) and Indiana (2.95%).

Did Iowa become a flat-tax state?

Yes. Iowa's 2022 tax reform law (HF 2317) collapsed 9 progressive brackets into a single flat 3.8% rate by tax year 2026. Plus the law fully exempts retirement income (pensions, IRA, 401(k) distributions) for filers 55+ — making Iowa increasingly retirement-friendly.

How does Iowa compare to Minnesota for taxes?

Minnesota has significantly higher income tax rates — top rate of 9.85% — compared to Iowa's flat 3.8%. For a $100k earner, Iowa saves $2,000–$3,500 in state income taxes versus Minnesota. The gap widened dramatically once Iowa's flat tax fully phased in for 2026.

State Tax Guide

Iowa State Income Tax Guide (2026)

Iowa landed at a flat 3.8% income tax in 2026 — the endpoint of HF 2317's multi-year phase-down from 9 brackets and an 8.53% top rate (2022).

Top State Rate

3.8%

$100k Take-Home

$75,992

/year (single)

State Tax on $100k

$3,188

single filer

Iowa Income Tax Brackets (2026)

Marginal Rate	Taxable Income (Single Filer)
3.8%	$0→All income (2026 — flat-rate endpoint of HF 2317)

Each rate applies only to income within that bracket. Your effective rate is the average across all brackets — meaningfully lower than your top marginal rate.

Brackets reflect the most recently published schedules. Some states inflation-index thresholds annually — specific 2026 amounts may shift slightly. Verify with your state's Department of Revenue before filing.

$100,000 Salary in Iowa — Full Tax Breakdown

Category	Annual	Monthly
Gross Salary	$100,000	$8,333
Federal Tax	−$13,170	−$1,098
FICA (SS + Medicare)	−$0.00	−$0.00
Iowa State Tax	−$3,188	−$266
Take-Home Pay	$75,992	$6,333

Assumes single filing status, standard deduction, no 401(k) or HSA contributions. 2026 tax year.

Run your numbers through the right calculator

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The 30-second version

1.Iowa is in the final year of HF 2317's multi-year flatten-and-cut. As enacted, tax year 2026 lands at a flat 3.8–3.9% rate — down from 8.53% (2022) and 9 brackets. One of the most aggressive tax overhauls in the country.
2.No state standard deduction. Iowa uses federal taxable income as the starting point with a handful of state-specific add-backs and subtractions.
3.Property tax is the catch — averaging ~1.50% effective, among the higher rates in the Midwest. Polk (Des Moines), Linn (Cedar Rapids), and Johnson (Iowa City) all run 1.5–1.7%.
4.Retirement income exclusion is generous — taxpayers 55+ get a FULL exemption on pensions, IRA, and 401(k) distributions (signed into law via HF 2317). Combined with SS exemption, IA is genuinely retirement-friendly post-2023.
5.Reciprocity with IL only. Major draw: Quad Cities-area workers (Davenport/Bettendorf in IA, Moline/Rock Island in IL) cross the river daily and file under reciprocity.

Why you can trust these numbers

Numbers reflect 2026 IRS federal brackets, FICA caps, and Iowa's HF 2317 phase-down landing at flat 3.8% for tax year 2026. The calculator at the top reflects this directly.

Sources: federal brackets + standard deduction from IRS Rev. Proc. 2025-32; state brackets verified against the Tax Foundation 2026 State Income Tax Rates compilation and the Iowa Department of Revenue's published 2026 schedule.

The phase-down — Iowa's quiet flat-tax revolution

Iowa's HF 2317 (signed 2022) is one of the most aggressive state tax overhauls in modern history. The schedule: 8.53% top with 9 brackets (2022) → 6% top with 4 brackets (2023) → 5.7% top with 3 brackets (2024) → 4.82% top with 2 brackets (2025) → flat 3.8–3.9% (2026). Final 2026 rate locked at 3.8% (per the 2024 acceleration) for most filers — making Iowa one of the lowest flat-rate states in the country.

Iowa starts with federal taxable income and applies a handful of state-specific adjustments — most notably the 2023 retirement income exclusion (full exemption for taxpayers 55+ on pensions, IRA, 401(k) withdrawals) and SS exemption. There's no separate Iowa standard deduction; the federal $15K single / $30K MFJ flows through.

Iowa has reciprocity with Illinois only — IA residents working in IL (and vice versa) owe tax only to their state of residence. This is essential to Quad Cities cross-river commuters and pockets of border activity.

What you'll actually pay — two real-life scenarios

Two scenarios to anchor the 2026 flat-rate math.

Illustrative — single filer unless noted, federal standard deduction, full-year IA residency, W-2 income. Numbers assume the 2026 flat 3.8% rate as enacted. Two-earner MFJ households pay more FICA than the calculator shows. Ballparks, not invoices.

Scenario 1: Des Moines insurance professional, $90,000

Federal income tax	~$11,400
Iowa state income tax (3.8% × $75K taxable)	~$2,850
FICA (Social Security + Medicare)	~$6,900
Total taxes	~$21,150
Annual take-home	~$68,850
Effective state rate	~3.2%

Des Moines insurance hub worker — Principal Financial, Wells Fargo, Nationwide, EMC, Athene. The post-HF-2317 flat rate is dramatically lower than legacy IA (which would have been ~$4,600 at this income at 2022 rates). Same role in MN: ~$5,500 state tax — IA saves $2,650/year. Same role in IL: ~$3,725 — IA saves $875. The Des Moines insurance corridor is genuinely competitive on after-tax comp now.

Scenario 2: Iowa City university-area professional, $130,000

Federal income tax	~$20,200
Iowa state income tax (3.8% × $115K taxable)	~$4,370
FICA	~$9,950
Total taxes	~$34,520
Annual take-home	~$95,480
Effective state rate	~3.4%

Iowa City University of Iowa Hospitals / Pearson / ACT / faculty / engineer. The 3.8% flat rate is competitive even with no-tax neighbors when you factor in Iowa City's relatively low cost of living (median home ~$280K, well below Twin Cities or Madison). Property tax is the catch — Johnson County effective rate runs ~1.55%, so a $300K home costs ~$4,650/year in property tax. The income-tax savings vs MN/WI partly offset by higher property tax.

Property tax + Iowa's school finance reality

IA property tax effective rates by county (approximate, primary residence): Polk (Des Moines) 1.45–1.65%, Linn (Cedar Rapids) 1.50–1.70%, Johnson (Iowa City) 1.50–1.65%, Scott (Davenport) 1.55–1.75%, Black Hawk (Waterloo) 1.60–1.80%, Dubuque 1.45–1.65%, Story (Ames) 1.40–1.60%. Statewide average ~1.50–1.55% — among the higher rates in the Midwest.

Iowa's high property tax is largely school finance — Iowa funds K-12 primarily through local property taxes vs sales/income tax in some peer states. The trade-off vs the new low income tax is real: a $300K home pays $4,500–5,000/year in property tax, partially offsetting the income-tax savings. Buy a smaller house, the math gets very competitive.

Things financially comfortable Iowans actually do

Max your 401(k) ($24,500 in 2026) — pre-tax for federal AND Iowa.
Max your HSA if eligible — pre-tax for federal AND IA.
Backdoor Roth IRA — fully legal.
Mega backdoor Roth if your employer's 401(k) plan allows.
College Savings Iowa 529 — IA offers a state-tax deduction up to $3,785 single / $7,570 MFJ per beneficiary annually (2026 amount; indexed). At IA's 3.8% bracket, that's ~$144 / $288 per kid in IA tax saved. Modest but real.
Retirement income exclusion (55+) — taxpayers 55 or older get a FULL exemption on pension, IRA, 401(k), and other qualified retirement income (HF 2317 provision, effective 2023). Combined with SS exemption, Iowa is genuinely retirement-friendly. For a 60-year-old retiree drawing $50K from IRA + $30K SS: zero IA state tax.
IL-IA reciprocity — Quad Cities residents working across the river file the appropriate non-residence form. IA residents working in IL (Moline, Rock Island, East Moline) owe only IA tax (3.8%) — better than IL's 4.95% flat. This is meaningful for Quad Cities-area Deere/Caterpillar/manufacturing workers.
Property tax rollback — Iowa applies an annual rollback factor (~54% for residential in 2026) reducing the assessed value used for property tax purposes. The published nominal assessed value is NOT what gets taxed — the rollback applies first. Your effective rate vs market value lands much lower than the published mill levy suggests.

Real questions people actually ask

Q: Is Iowa really at a flat 3.8% in 2026?

Yes — as enacted under HF 2317 (2022) and the 2024 acceleration. The phase-down schedule landed at flat 3.8% for tax year 2026 on. Down from 9 brackets and 8.53% top in 2022. Iowa is now one of the lowest flat-rate states in the country, alongside North Carolina (3.99% phasing to 3.99%) and Indiana (2.95%).

Q: Does Iowa tax retirement income?

For taxpayers under 55: yes, at the flat 3.8% rate. For taxpayers 55 and older: NO — Iowa exempts ALL pension, IRA, 401(k), and qualified retirement income for filers 55+ (HF 2317 provision, effective 2023). SS is also exempt at all ages. Combined effect: a 60-year-old retiree drawing $50K from IRA + $30K SS pays zero Iowa state income tax. This makes Iowa surprisingly retirement-friendly post-2023, especially compared to MN/WI/IL.

Q: I work in Moline IL but live in Davenport IA. What do I owe?

Under IL-IA reciprocity, you owe only Iowa tax on your IL wages. File IL Form W-5-NR with your IL employer to stop IL withholding; submit IA Schedule WD with your IA return showing the wages. You file ONE state return (Iowa) at 3.8% on your IL wages. This saves vs IL's 4.95% — roughly $700/year on $60K of IL wages. The Quad Cities is one of the few US metros where reciprocity is a daily fact of life.

Q: Why is Iowa property tax so high?

Iowa funds K-12 schools primarily through local property tax (vs many states using state sales/income tax). The result: ~1.5% effective rate, well above the ~1% national average. The state offsets this partially via the residential rollback (~54% for 2026, meaning only 54% of assessed value is taxed). Net effect: a $300K home shows up as ~$162K taxable, then taxed at the local mill rate — ending around $4,500–5,000/year. Be aware of this when comparing IA total tax burden to lower-property-tax states like IL/MN.

Our honest opinion (which is just an opinion)

Iowa post-HF-2317 is genuinely transformed. The flat 3.8% income tax + full retirement exclusion for 55+ + SS exemption is a quietly excellent setup, especially for retirees. The catch is property tax — meaningfully above national average, partly funded by the school-finance structure. Net total tax burden for typical professionals lands in the moderate-to-low range.

The case for Iowa:

Flat 3.8% state rate (2026) — among the lowest in the country
Full retirement income exclusion for filers 55+ (post-2023)
SS fully exempt at all ages
Cost of living significantly cheaper than MN, WI, IL on the housing front
Quad Cities reciprocity with IL (rare cross-state commuter benefit)
Diverse economy: insurance (Des Moines), agriculture, John Deere, Collins Aerospace, Pioneer/Corteva
No state estate or inheritance tax

The case against:

Property tax averages ~1.50% — meaningfully above national average
Modest College Savings Iowa 529 deduction
Reciprocity only with IL (no MN/WI/MO/NE — cross-border workers file two returns)
Public school funding varies by district despite the high property tax
Workers under 55 don't get the retirement exclusion (which is the headline benefit)

Honest take: Iowa post-2023 is one of the best-kept secrets in the Midwest tax landscape — especially for retirees 55+ where the income tax effectively goes to zero. For working professionals, the 3.8% flat rate is competitive with MN/WI/IL, but the high property tax claws back ~1–1.5% of typical compensation when factored across both. Cost of living offsets help significantly. Quad Cities IL→IA migration is a real phenomenon.

What now

Run your numbers in the calculator above. If you're 55+, confirm your retirement income is being treated as exempt at filing. If you live near the IL border and work across, file the IL-IA reciprocity certificate with your employer. Property tax is the bigger lever — verify your county's residential rollback and check your assessment annually.

Sources & further reading

A few honest notes

Not personal tax, legal, or financial advice. Verify with a licensed CPA, EA, or tax attorney before making meaningful decisions.
Tax law changes. This guide reflects 2026 IRS schedules and Iowa's HF 2317 phase-down schedule landing at flat 3.8% for tax year 2026.
The retirement income exclusion (55+) has specific qualified-income definitions — verify with the Iowa DOR or a CPA for your situation.
Property tax estimates vary by county and city — check your county assessor's website and the current rollback factor.
The numbers are illustrative — scenarios don't include every credit, deduction, or wrinkle that might apply to you.
No client relationship is created by reading this page.

Last updated April 2026 with 2026 IRS schedules and Iowa's HF 2317 phase-down schedule.