New state income tax reforms kick in this year in Iowa

DES MOINES, Iowa (KCCI) – New state revenue tax reforms kick on this 12 months in Iowa.

The state is regularly transferring towards a flat tax fee everybody can pay by 2026.

This 12 months, Iowa’s high particular person revenue tax fee will drop from eight % to 6 %.

It will give a tax lower to Iowans who make $75,000 a 12 months or extra, after they file subsequent 12 months.

By 2026, the highest tax fee will fall to three.9 %, which would be the fee for all taxpayers.

AARP Iowa State Director Brad Anderson mentioned retired Iowans are additionally getting a tax break this 12 months. Retirement incomes like pensions, IRAs, and 401k’s will now be state-tax free.

“We’re type of optimistic that in 2023, older Iowans throughout the board could have a bit of little bit of cushion of their retirement revenue that may ease a few of the monetary pressure that we’ve seen over the past 12 months,” Anderson mentioned.

One other change this 12 months, Iowans can now not deduct federal revenue tax.

In case you have questions on how your tax revenue might change this 12 months, attain out to your monetary planner of the Iowa Division of Income.

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