IOWA PAYCHECK CALCULATOR 2026
Iowa switched to a flat 3.8% income tax rate in 2026 — confirmed by the Iowa Department of Revenue on October 21, 2025. Every dollar of Iowa taxable income is taxed at the same 3.8% rate with no brackets. Iowa uses the federal standard deduction ($16,100 Single / $32,200 MFJ) and has no local income taxes anywhere in the state. Social Security and retirement income are fully exempt for taxpayers age 55+. Use the calculator below for your exact Iowa take-home pay.
CALCULATE YOUR IOWA NET PAY
Flat 3.8% Iowa state tax · Federal standard deduction applied · 2026 verified data
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EVERY DEDUCTION ON AN IOWA PAYCHECK IN 2026
Iowa paycheck deductions are four items — one of the shortest lists of any income-tax state in the country. No city or county in Iowa levies a local income tax, and Iowa has no state disability insurance or paid family leave withholding:
- Federal Income Tax — Progressive 10%–37% brackets applied after the 2026 federal standard deduction ($16,100 Single / $32,200 MFJ / $24,150 HOH).
- Social Security — 6.2% of gross wages up to the $176,100 annual wage base. Wages above this are Social Security-exempt for the rest of the calendar year.
- Medicare — 1.45% on all wages with no cap. An additional 0.9% Medicare surtax applies to individual wages above $200,000.
- Iowa State Income Tax — Flat 3.8% on Iowa taxable income. Iowa taxable income equals federal adjusted gross income minus the federal standard deduction (or federal itemized deductions if the taxpayer itemizes).
Example — Single, $70,000 gross wages (2026):
Iowa Taxable = $70,000 − $16,100 (federal std ded) = $53,900
Iowa State Tax: $53,900 × 3.8% = $2,048.20
Effective Iowa Rate = 2.93% of gross wages
HOW IOWA TAXABLE INCOME IS CALCULATED
Iowa eliminated its own state standard deduction and itemized deduction system starting with tax year 2023. Iowa now starts with the taxpayer's federal adjusted gross income (the same AGI figure used on the federal return), then applies the same deduction the taxpayer claimed on their federal return — standard or itemized. For most Iowa workers who take the standard deduction federally, Iowa taxable income is simply:
| Filing Status | Federal Standard Deduction (2026) | Iowa Taxable Income Formula |
|---|---|---|
| Single | $16,100 | Gross wages − $16,100 |
| Married Filing Jointly | $32,200 | Gross wages − $32,200 |
| Head of Household | $24,150 | Gross wages − $24,150 |
Iowa's elimination of its own state deduction system in 2023 simplified the filing process considerably — Iowa filers who use the standard deduction no longer need to calculate a separate state deduction figure. The federal deduction amount flows directly into the Iowa return. For taxpayers who itemize federally (mortgage interest, charitable contributions, etc.), those same itemized deductions apply on the Iowa return.
IOWA'S TAX REFORM HISTORY — FROM 8.98% TO 3.8%
Iowa's tax reform journey over the past eight years is one of the most dramatic state income tax transformations in U.S. history:
| Tax Year | Iowa Top Rate / Structure | Key Legislation |
|---|---|---|
| 2018 | 8.98% (9 progressive brackets) | Pre-reform baseline |
| 2019–2022 | 8.53% top rate, 9 brackets reducing | HF 2317 (2018) — phased reductions |
| 2023 | 4 brackets: 4.40% / 4.82% / 5.70% / 5.70% | HF 2552 (2022) — major simplification |
| 2024 | 4 brackets: 4.40% / 4.82% / 5.70% / 5.70% | Transition year |
| 2025 | Flat 3.8% (all brackets eliminated) | SF 2442 (May 2024) — flat tax enacted |
| 2026 | Flat 3.8% — confirmed | IDR press release Oct 21, 2025 |
| 2027+ | Potentially below 3.8% | SF 619 — revenue trigger mechanism |
The move to a flat 3.8% rate in 2025 — one year ahead of the original schedule that would have set the rate at 3.9% — was made possible when Iowa's strong fiscal position allowed legislators to accelerate the final cut. The result is a state where every Iowa taxpayer — from the lowest-income filer to the highest earner — pays the same 3.8% on every dollar of Iowa taxable income.
IOWA RETIREMENT INCOME EXEMPTIONS
| Income Type | Iowa Tax Treatment (2026) | Age Requirement |
|---|---|---|
| Social Security benefits | Fully exempt — $0 Iowa tax | Any age |
| Military retirement pay | Fully exempt — $0 Iowa tax | Any age |
| 401(k) / IRA distributions | Fully exempt | Age 55+ |
| Pension income | Fully exempt | Age 55+ |
| Annuity income | Fully exempt | Age 55+ |
| Retirement income under 55 | Subject to 3.8% flat rate | Under age 55 |
| Wages and salaries | 3.8% flat rate applies | All ages |
IOWA VS MIDWEST NEIGHBORS — $70,000 TAKE-HOME
| State | Tax Structure (2026) | State Tax on $70k (Single) | Est. Annual Net |
|---|---|---|---|
| Iowa | Flat 3.8% | ~$2,048 | ~$55,825 |
| South Dakota | No state income tax | $0 | ~$57,873 |
| Nebraska | Flat 4.55% | ~$2,606 | ~$55,267 |
| Missouri | Progressive 0%–4.7% | ~$2,353 | ~$55,478 |
| Illinois | Flat 4.95% | ~$3,195 | ~$54,678 |
| Indiana | 2.95% + county tax | ~$2,802–$3,429 | ~$54,444–$55,071 |
| Minnesota | Progressive 5.35%–9.85% | ~$3,237 | ~$54,636 |
| Wisconsin | Progressive up to 7.65% | ~$3,080 | ~$54,793 |
| Kansas | Progressive up to 5.7% | ~$3,100 | ~$54,773 |
Iowa's $2,048 state tax on $70,000 is among the lowest of any Midwest state with an income tax. Only Missouri ($2,353) comes close among neighboring states. Against no-income-tax South Dakota, Iowans pay about $2,048 more per year — roughly $171 per month. Iowa's competitive 3.8% rate has been cited by the Tax Foundation as a significant improvement in state business tax competitiveness, rising considerably in national rankings since 2018.
2026 FEDERAL TAX BRACKETS — SINGLE FILERS
| Federal Taxable Income (Single, 2026) | Federal Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,926 – $48,475 | 12% |
| $48,476 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,525 | 32% |
| $250,526 – $626,350 | 35% |
| Above $626,350 | 37% |
IOWA PAYCHECK CALCULATOR — FAQs
What is Iowa's income tax rate in 2026?
Iowa's income tax rate is a flat 3.8% for 2026, confirmed by the Iowa Department of Revenue's October 21, 2025 press release. Every dollar of Iowa taxable income is taxed at the same 3.8% rate — no brackets, no phase-outs. The flat rate was enacted by Iowa Senate File 2442 (May 2024).
Does Iowa have local income taxes?
No. Iowa does not permit cities, counties, or any local government to levy an income tax. There are zero local income taxes anywhere in Iowa. Every Iowa worker pays only the statewide 3.8% rate — whether in Des Moines, Cedar Rapids, Davenport, Sioux City, or a small rural county.
Does Iowa have a standard deduction?
Iowa eliminated its own standard deduction in 2023. Iowa now uses the federal standard deduction: $16,100 (Single), $32,200 (MFJ), $24,150 (HOH) in 2026. Iowa taxable income equals federal AGI minus the same standard deduction used on the federal return.
Is Social Security or retirement income taxed in Iowa?
Social Security benefits are fully exempt from Iowa state income tax. All retirement income — 401(k), IRA, pension, annuity — is fully exempt for taxpayers age 55 or older. Military retirement pay is fully exempt at any age. These exemptions took full effect in 2023.
What is the Iowa school district surtax?
Iowa school districts can levy a surtax of 0%–20% of a resident's Iowa income tax liability. This rate varies by district and is typically not withheld from paychecks — it is calculated and paid when filing the annual Iowa income tax return. If your district has a surtax, it is an additional cost to include in your annual budget. Check the Iowa Department of Revenue's school district surtax table for your specific district's rate.
How much will I take home on a $70,000 salary in Iowa?
Single, no surtax: Iowa taxable income is $53,900 ($70,000 − $16,100). Iowa state tax = $53,900 × 3.8% = $2,048.20. Combined with ~$6,772 federal tax and ~$5,355 FICA, estimated annual take-home is ~$55,825 (~$4,652/month).
Run your Iowa estimate again anytime: Iowa Paycheck Calculator 2026