How much is Iowa income tax?
Iowa income tax at 3 levels of Iowa taxable income — what is left after Iowa's own deductions and exemptions. Local income taxes are not included.
| Taxable income | Single | Married filing jointly |
|---|---|---|
| $50,000 | $1,9003.8% effective · 3.8% marginal | $1,9003.8% effective · 3.8% marginal |
| $100,000 | $3,8003.8% effective · 3.8% marginal | $3,8003.8% effective · 3.8% marginal |
| $250,000 | $9,5003.8% effective · 3.8% marginal | $9,5003.8% effective · 3.8% marginal |
What is Iowa's income tax rate for 2026?
| Taxable income | Rate |
|---|---|
| All taxable income | 3.8% |
Source: Iowa Code 2026 §422.5 · IDR 2026 rate release, checked September 11, 2026.
Can you deduct Iowa income tax on your federal return?
The federal deduction for state and local taxes (SALT) is capped at $40,400 for 2026 — $20,200 if married filing separately — and the cap shrinks toward $10,000 once modified AGI passes $505,000. A single filer with $250,000 of Iowa taxable income owes about $9,500 in Iowa income tax — 24% of that cap before any property tax.
SALT cap workaroundsDoes Iowa have a pass-through entity tax (PTET)?
Yes. A partnership or S corporation can elect to pay Iowa income tax at the entity level. The business deducts it federally, so that state tax is not limited by the SALT cap, and the owners claim an Iowa credit or exclusion for it. Deductsy's plan treats March 15 as the Iowa election or first-payment deadline; it is approximate, so confirm it with Iowa before relying on it.
PTET savings calculatorWhen are Iowa estimated tax payments due?
Iowa estimated tax is due April 30, June 30, September 30 and January 31 of the following year, in 4 equal instalments. Source: 2026 IA 1040ES, Iowa Individual Estimated Income Tax Instructions, 45-009a (08/29/2025).
Safe-harbor calculatorAre HSA contributions deductible in Iowa?
Yes. Iowa follows the federal treatment, so an HSA contribution — up to $4,400 with self-only coverage or $8,750 with family coverage for 2026 — lowers Iowa taxable income as well as federal.
Does Iowa give a tax break for 529 plan contributions?
Yes. Iowa lets you deduct up to $6,100 a year of contributions to Iowa's own 529 plan ($12,200 on a joint return). Income limits, per-beneficiary caps and carryforwards differ by state, so check the plan's rules.
529 plan tax savings calculatorWhich states have tax reciprocity with Iowa?
Iowa has mutual agreements with Illinois: neither state taxes the other's residents on wages earned there, so those wages are taxed only where you live. Give your employer the exemption certificate and the state you work in stops withholding.
What is the property tax rate in Iowa?
Iowa's average effective property tax rate is 1.39% — the 10th highest of 51 jurisdictions and 1.5 times the national average of 0.9%. That is about $1,390 a year for every $100,000 of home value; the rate varies widely by county and school district.
Itemize or take the standard deduction?How much does an LLC cost to keep in Iowa each year?
Deductsy budgets about $15 a year for an Iowa LLC — the annual report fee or minimum franchise tax, with a fee due every two years counted at half. Fees change, so confirm with Iowa's business filing office.
Iowa S-corp tax calculatorHow do Iowa taxes compare with neighboring states?
| State | Top income tax rate | Income tax on $100,000 (single) | Property tax (avg) |
|---|---|---|---|
| Iowa | 3.8% | $3,800 | 1.39% |
| Illinois | 4.95% | $4,950 | 2.01% |
| Minnesota | 9.85% | $6,317 | 1.02% |
| Missouri | 4.7% | $4,555 | 0.85% |
| Nebraska | 4.55% | $4,249 | 1.49% |
| South Dakota | None | $0 | 1.06% |
| Wisconsin | 7.65% | $4,696 | 1.42% |
On $100,000 of taxable income a single filer's Iowa income tax is $3,800 — more than in 1 of 6 neighboring states. The lowest is South Dakota at $0; the highest is Minnesota at $6,317. Iowa's average property tax rate is higher than in 3 of 6.
Income tax is each state's own tax on the same state taxable income; local income taxes are not included.
Tax moves that matter most for Iowa
If you own an S corporation, partnership or multi-member LLC, Iowa's PTET election moves the Iowa income tax on that profit to the business, where it is deductible federally and outside the SALT cap.
That is the 10th highest of 51 and 1.5 times the national average, so property tax does much of the work of filling the SALT cap. Bunching two years of property tax into one can push itemized deductions past the standard deduction in alternate years.
An S-corp election can cut self-employment tax once profit is large enough to pay yourself a reasonable salary and still cover payroll and filing costs. The Iowa calculator adds Iowa's own entity fees and taxes to that breakeven.
With 1099 income, a Solo 401(k) can take up to $72,000 a year (2026) — usually more than a SEP-IRA at the same income. Contributions lower both federal and Iowa income tax.
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