Iowa paycheck guide
Iowa's flat 3.8% tax and federal starting point
Iowa spent several years collapsing a multi-bracket income tax into a single rate, and 3.8% is where it landed for 2025 and 2026. Every dollar of Iowa taxable income is taxed at that rate, so the effective rate climbs only because the standard deduction covers a shrinking share of pay: 1.63% at $30,000, 2.93% at $75,000, and 3.54% at $250,000.
Iowa no longer has its own standard deduction or itemized deduction rules. The Iowa return now starts from your federal taxable income, so the federal standard deduction of $16,100 for a single filer, $24,150 for a head of household, or $32,200 for a married couple, carries straight through. Anything that lowers federal taxable income, such as traditional 401(k) deferrals, HSA contributions, or pre-tax health premiums, lowers Iowa tax by 3.8% of the same amount.
Iowa also keeps small exemption credits that come off the tax itself rather than off income: $40 for a single filer, with more for a spouse, dependents, and filers who are 65 or older or blind. Our figures include the single filer's $40 credit.
Worked example: a $75,000 paycheck in Iowa
Because Iowa borrows the federal deduction, the first steps of both calculations match. A single filer earning $75,000 subtracts $16,100 and has $58,900 of taxable income. Iowa taxes all of it at 3.8%, which comes to $2,238, then subtracts the $40 personal exemption credit. The Iowa bill is $2,198, an effective rate of 2.93%.
The federal government taxes the same $58,900 in layers: $12,400 at 10%, $38,000 at 12%, and $8,500 at 22%, for $7,670. Social Security takes $4,650 and Medicare $1,088. What is left is $59,394 a year, or $4,950 a month, before any school district surtax. The Iowa $75,000 salary page splits this out by pay period.
At $150,000 the same math gives $133,900 of taxable income and, after the $40 credit, $5,048 of Iowa tax, 3.37% of salary, with take-home pay of $108,743.
The school district surtax
Iowa has no city income tax, but many of its school districts levy an income surtax, and some counties add a surtax to fund emergency medical services. The surtax is a percentage of your Iowa income tax, not of your wages, and you calculate it on the IA 1040 using the district where you lived on December 31. You owe it whether or not you have children in public school.
In our city figures for a $75,000 single filer, Cedar Rapids residents pay a $110 surtax, while Des Moines and Davenport add nothing. Because it scales with state tax, the surtax stays modest next to Indiana's county taxes or Missouri's city earnings taxes. Look up your district on the Iowa Department of Revenue's address lookup before you assume it is zero.
Since the surtax is settled on your annual return, the easiest way to avoid a small balance due is to add a flat extra amount per paycheck on your IA W-4. The Cedar Rapids calculator includes it in take-home pay.
Withholding, the Illinois agreement, and border commutes
Iowa employers use the IA W-4, Iowa's own withholding certificate, rather than the federal W-4. File a new one after you marry, add a dependent, or start a second job, since Iowa's annualized withholding formula assumes each job is your only income.
Iowa's only reciprocity agreement is with Illinois. An Illinois resident working in Davenport or Bettendorf can give the Iowa employer a statement of nonresidence and pay income tax only to Illinois, and an Iowan working in Moline or Rock Island pays only Iowa. Commuters across the other borders file in both states: an Iowan working in Omaha pays Nebraska tax and claims a credit on the Iowa return for tax paid there.
How Iowa compares with its neighbors
At $75,000, a single Iowa worker's $59,394 take-home ranks 16th among the 50 states and DC, and Iowa beats every neighbor that taxes wages. Nebraska leaves $335 less, Missouri $336 less, Wisconsin $746 less, Illinois $1,370 less, and Minnesota $1,379 less. See Iowa vs Minnesota for the full side-by-side.
South Dakota is the exception. With no income tax, the same worker in Sioux Falls or North Sioux City takes home $61,592, which is $2,198 more than in Sioux City. For a Siouxland household choosing which side of the Big Sioux River to live on, that difference is the entire Iowa income tax bill.
What to expect at your income
Earning under $50,000
Under $50,000, the $16,100 standard deduction shields a large share of pay, so Iowa tax stays low. A single filer earning $30,000 owes $488 to Iowa, an effective rate of 1.63%, and at $50,000 the bill is $1,248, leaving $41,107 a year. Working full time at an hourly wage that grosses $31,200, you pay $534 to Iowa and keep $26,715. If you have a low income and a filing requirement, Iowa's alternate tax calculation on the IA 1040 may lower your bill further, and a school district surtax adds only a few dollars at this level.
Earning $50,000 to $150,000
Between $50,000 and $150,000, each extra dollar costs 3.8% in Iowa tax on top of the 22% or 24% federal bracket. A single filer earning $100,000 pays $3,148 to Iowa and takes home $76,032, or $6,336 a month. A married couple at the same income pays only $2,496, since their deduction doubles to $32,200. Traditional 401(k) contributions save Iowa tax at the full 3.8%, and contributions to Iowa's 529 plan are deductible up to a yearly limit per beneficiary.
Earning over $150,000
Above $150,000, Iowa's flat rate means no state bracket creep: the top dollar is taxed at 3.8% at every income. A single filer earning $250,000 pays $8,848 to Iowa, an effective rate of 3.54%, and takes home $174,334. The school district surtax grows with your state tax, so in districts that levy one it becomes a noticeable line at this income. Compared with Minnesota's brackets or Illinois's 4.95% flat rate, Iowa's advantage widens as pay rises.
Iowa paycheck tips
Find your school district before you file
The surtax depends on the district where you lived on December 31, which may differ from your city or mailing address. Use the Iowa Department of Revenue's address lookup.
Cover the surtax with extra withholding
Because the surtax is figured on the IA 1040, a small extra amount per pay period on your IA W-4 keeps it from showing up as a balance due in April.
Illinois commuters: stop Iowa withholding
Illinois residents working in the Quad Cities should file a statement of nonresidence with their Iowa employer so only Illinois tax is withheld.
Deduct College Savings Iowa contributions
Contributions to Iowa's 529 plan are deductible on the Iowa return up to an annual limit per beneficiary, which saves 3.8% of each dollar contributed.
Common mistakes
Assuming no local tax because Iowa has no city income tax
Many school districts levy an income surtax, and a few counties add one for emergency medical services. It is small, but it is real and it is not optional.
Keeping an IA W-4 from the bracket years
Iowa's rates fell sharply in recent years. Extra withholding you set under the old brackets may now overwithhold, so review the IA W-4 if you added a flat extra amount years ago.
Expecting a South Dakota address to cut Iowa tax on Iowa wages
Living in South Dakota removes Iowa tax on income earned elsewhere, but wages earned at an Iowa job are still taxed by Iowa as nonresident income.
Moving to or from Iowa
Moving to Iowa
Moving to Iowa from Minnesota or Illinois usually cuts your state income tax, since Iowa's flat 3.8% rate applies only after the $16,100 federal-style deduction. At $75,000 a single filer pays $2,198 to Iowa. Check the school district surtax for any address you are considering, because it varies by district. Retirees 55 and older also benefit from Iowa's exclusion of retirement income.
Leaving Iowa
Leaving Iowa for South Dakota saves the $2,198 a $75,000 earner pays to Iowa, plus any school district surtax. Moving to Minnesota, Illinois, Nebraska, or Wisconsin raises the state bill at that salary. You file an Iowa part-year resident return for the year you move, and the surtax applies only if you still lived in a surtax district on December 31.