Iowa
How does Iowa’s state income tax rates compare to other states?
DES MOINES, Iowa (Gray TV Iowa State Capitol Bureau) – Iowa is joining a growing number of states to use a flat state income tax rate. That means that everyone who pays taxes would pay the same rate rather than a percentage based on their income.
These are the current state personal income tax brackets in Iowa for 2024 as provided by the Iowa Department of Revenue.
The newest tax cuts will reduce rates to a 3.8% flat tax that begins January 1, 2025. The legislature had previously passed a plan to institute a 3.9% flat tax that would have begun one year later.
By instituting a flax tax, Iowa joins 13 other states: Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Mississippi, North Carolina, Pennsylvania and Utah.
Here’s how Iowa’s 3.8% compares to neighboring states’ highest tax rates:
Illinois: 4.95% (flat tax)
Minnesota: 4.8%
Missouri: 4.8%
Nebraska: 5.84%
South Dakota: no state income tax
Wisconsin: 7.65%
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