Iowa Take-Home Pay Calculator
3.8% flat rateEstimate your net paycheck after federal taxes, FICA, and Iowa state income tax.
Last updated: April 2026
Iowa Income Tax
Iowa moved to a flat 3.8% income tax rate in 2026 as part of its multi-year tax reform plan.
Iowa State Income Tax: What You Need to Know
Iowa moved to a flat 3.8% income tax rate in 2026 as part of its multi-year tax reform plan.
Iowa completed a sweeping multi-year income tax overhaul under SF 2342 (2022), moving from a nine-bracket graduated system that once topped at 8.98% (as recently as 2018) to a flat 3.8% rate for 2026. Iowa's standard deduction conforms to the federal amount ($15,000 for single filers in 2026), meaningfully reducing taxable income before the state rate applies. Iowa has no local income taxes — Des Moines, Cedar Rapids, Iowa City, and all Iowa cities add no local wage withholding. Iowa fully exempts Social Security benefits from state income tax and exempts most retirement income (pensions, IRA and 401(k) distributions) for residents age 55 and older — making Iowa notably retiree-friendly. Iowa's legislation also sets a path to potentially drop the flat rate further in coming years if revenue conditions are met, with a target of 3.65% by 2027 and possible further reductions beyond that. The dramatic reduction from rates that once neared 9% to under 4% represents one of the larger state income tax cuts in recent US history.
On top of state taxes, all workers also pay federal income tax based on the 2026 progressive brackets, plus FICA taxes: Social Security (6.2% up to $176,100) and Medicare (1.45% on all wages).
Our calculator applies Iowa's 3.8% flat rate to your gross income as a simplified estimate. Actual state taxes may vary based on deductions, exemptions, and local taxes not captured in this estimate.
Iowa Take-Home Pay Examples (2026, Single Filer)
Estimates based on standard deduction, no pre-tax deductions. Last updated: April 2026.
| Salary | Federal Tax | State Tax | FICA | Take-Home |
|---|---|---|---|---|
| $40,000 | $3,167 | $1,520 | $3,060 | $32,253 |
| $60,000 | $6,617 | $2,280 | $4,590 | $46,513 |
| $80,000 | $10,817 | $3,040 | $6,120 | $60,023 |
| $100,000 | $15,617 | $3,800 | $7,650 | $72,933 |
Frequently Asked Questions: Iowa Taxes
What is Iowa's income tax rate for 2026?
Iowa's income tax rate for 2026 is a flat 3.8% on all taxable income. This is the result of a multi-year reform under SF 2342 (2022) that replaced Iowa's complex nine-bracket graduated system — which topped at 8.98% as recently as 2018 — with a progressively lower flat rate each year. Iowa's standard deduction conforms to the federal amount ($15,000 for single filers in 2026), so taxable income for most workers is meaningfully lower than gross wages before the 3.8% rate applies.
When did Iowa switch from graduated brackets to a flat tax?
Iowa's SF 2342 passed in March 2022 and phased in a flat rate over multiple years: 6% in 2023, 5.7% in 2024 (with a graduated simplification), and then a single flat rate trajectory reaching 3.8% in 2026. Before 2018, Iowa had a nine-bracket system with rates as high as 8.98% — one of the highest state income tax rates in the nation. Iowa's transformation from a near-9% top rate to a 3.8% flat rate in under a decade is one of the most dramatic state income tax reforms in recent history.
Does Iowa tax Social Security benefits?
No. Iowa fully exempts Social Security benefits from state income tax regardless of income level — a complete exemption that benefits all Iowa retirees. Iowa also exempts most retirement income from state tax for Iowans age 55 and older: pension payments, IRA and 401(k) distributions, and annuity income are all excluded from Iowa taxable income above that age threshold. For retirees in Iowa, the combination of Social Security exemption and retirement income exclusion often means paying little to no Iowa state income tax, even at significant total income levels.
Does Iowa have a local income tax?
No. Iowa cities and counties cannot impose a local income tax on wages. Des Moines, Cedar Rapids, Iowa City, Davenport, and all other Iowa localities add no additional income tax withholding. Iowa residents pay only state income tax at the sub-federal level — a clean, single-rate system with no local layer. This is simpler than neighboring states like Illinois (no local income tax either) and much simpler than Indiana where all 92 counties levy their own taxes.
How does Iowa's 3.8% flat rate compare to neighboring states?
Iowa's 3.8% flat rate is lower than Illinois (4.95% flat), Wisconsin (graduated, top 7.65%), and Minnesota (graduated, top 9.85%). It is slightly higher than Indiana's 3.15% state rate, though Indiana residents also pay county taxes (averaging 1.5–2%), so the combined Indiana rate often exceeds Iowa's. Nebraska has moved to a flat 3.99% rate, making it very close to Iowa. South Dakota and Wyoming have no income tax at all. Iowa has gone from one of the Midwest's highest-tax states to one of the most competitive for individual income taxes.
What is Iowa's minimum wage in 2026?
Iowa's minimum wage is $7.25/hour — the federal floor. Iowa has not raised its state minimum above the federal minimum and preempts cities and counties from setting higher local minimums. This means no Iowa locality can legally require wages above $7.25/hour by local ordinance. Iowa City, home to the University of Iowa, passed a local minimum wage ordinance that was preempted by state law in 2017 — a notable example of the state blocking local action. For context, neighboring Illinois mandates $15.00/hour statewide.