What is the Iowa income tax rate in 2026?

Iowa has a flat 3.8% income tax rate effective 2026, replacing the previous 4-bracket progressive system (4.4%-5.7% in 2025). This is the final step of a multi-year tax reform signed by Governor Kim Reynolds in 2022. The standard deduction is $2,210 (single) or $5,450 (married filing jointly). No local income taxes apply, though some school districts levy an optional surtax.

How much is the Iowa school district surtax?

School district surtax rates in Iowa range from 0% to approximately 20% of your state income tax liability. The rates are set individually by each school district through voter approval. Most districts that levy the surtax have rates between 1% and 12%. The Des Moines Independent School District, for example, has no surtax, while some rural districts may levy rates near the maximum. You can find your district's rate on the Iowa Department of Revenue website.

How does Iowa compare to neighboring states for income tax?

Iowa's new 3.8% flat rate is competitive in the Midwest. Illinois has a flat 4.95%, Minnesota's top rate is 9.85%, Wisconsin's top rate is 7.65%, and Nebraska's top rate is 4.55%. Missouri's top rate is 4.8%. South Dakota has no income tax at all. On an $80K salary filing single, Iowa's approximately $2,956 state tax is lower than Illinois ($3,196), Minnesota ($4,265), and Wisconsin ($4,143), but higher than South Dakota ($0) and Missouri ($2,731).

Iowa Paycheck Calculator 2026

Q: What is the Iowa school district surtax?

Iowa allows individual school districts to levy a surtax on residents' state income tax liability. The surtax ranges from 0% to 20% and varies by school district. For example, if your Iowa state tax is $2,956 and your school district surtax rate is 5%, you owe an additional $148. Not all districts levy this surtax. Check with your local school district or the Iowa Department of Revenue for your specific rate.

Brand new 3.8% flat rate replaces 4-bracket progressive system. Calculate your take-home pay with Iowa's simplified tax.

Gross annual salary

Pay frequency

Filing status

Take-home per paycheck (biweekly)

$2,379.81

Gross pay (annual)$80,000

Deductions (annual)

Federal income tax−$9,049

IA state tax (3.8%)−$2,956

Social Security (6.2%)−$4,960

Medicare (1.45%)−$1,160

Summary

Annual take-home$61,875

Effective total tax rate22.7%

Effective IA state rate3.7%

You keep per dollar77 cents

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Iowa Paycheck Calculator 2026 · Updated April 2026

How to Use This Calculator

Tab "Take-Home Pay"

Enter your gross annual salary, pay frequency, and filing status. The calculator deducts federal income tax, Iowa's new 3.8% flat state tax, and FICA (Social Security + Medicare). Under "More options," add 401(k) contributions, health insurance premiums, and an optional school district surtax rate. You'll see your per-paycheck take-home and an annual summary with your effective tax rate.

Tab "Tax Breakdown"

A visual pie chart showing exactly where your money goes. You'll see slices for federal income tax, IA state tax, Social Security, and Medicare. If you entered a school district surtax, it appears as a separate slice. The chart highlights that Iowa's 3.8% flat rate is brand new for 2026 — replacing the previous 4-bracket progressive system.

Tab "Compare Filing Status"

See how your take-home pay changes across Single vs Married Filing Jointly vs Head of Household. The comparison shows federal tax, IA state tax, and total take-home for each status so you can see the exact dollar difference. Because Iowa now uses a flat rate, the state tax difference comes from the standard deduction ($2,210 single vs $5,450 MFJ).

The Formulas

Federal Income Tax (2026 brackets, progressive):
1. Start with gross annual salary
2. Subtract pre-tax deductions (401k, health insurance)
3. Subtract standard deduction ($15,750 Single / $31,500 MFJ / $23,500 HoH)
4. Apply progressive brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%

Iowa State Tax (flat rate, new for 2026):
IA taxable income = Gross salary - IA standard deduction ($2,210 Single / $5,450 MFJ)
IA tax = IA taxable income x 3.8%
School district surtax = IA tax x surtax rate (0%-20%, varies by district)
No local income taxes apply — only the optional school district surtax.

FICA (Federal Insurance Contributions Act):
Social Security = 6.2% x min(Gross wages, $184,500)
Medicare = 1.45% x Gross wages
Additional Medicare = 0.9% x max(0, Gross wages - $200,000)

Take-Home Pay:
Net = Gross salary - Federal tax - IA state tax - School surtax - Social Security - Medicare - Pre-tax deductions

All figures use 2026 IRS rates: SS wage base $184,500 (SSA), tax brackets from Rev. Proc. 2025-32, TCJA rates made permanent by OBBBA. Iowa 3.8% flat rate per SF 2417 (2022), final phase-in effective January 1, 2026. Iowa conforms to federal tips/overtime exemptions.

Example

Sarah — Marketing Manager in Des Moines, Iowa

Filing Single. $80,000/year salary. Paid biweekly (26 paychecks). No pre-tax deductions. No school district surtax.

Gross salary (annual)$80,000

Federal income tax-$9,049

IA state tax (3.8%)-$2,956

Social Security (6.2%)-$4,960

Medicare (1.45%)-$1,160

Annual take-home$61,875

Per paycheck (biweekly)$2,380

IA taxable income = $80,000 - $2,210 = $77,790. IA tax = $77,790 x 3.8% = $2,956. Sarah keeps 77.3% of her gross salary. Under the old 2025 system with 4 brackets (4.4%-5.7%), she would have owed roughly $3,740 in state tax — the reform saves her about $784/year. Compared to neighboring Illinois (flat 4.95%), Iowa's 3.8% rate saves $240 more annually on the same salary.

Frequently Asked Questions

How did Iowa go from progressive brackets to a flat tax?▼

In 2022, Governor Kim Reynolds signed SF 2417, a comprehensive tax reform that phased Iowa's individual income tax from a complex 9-bracket system down to a single flat rate over four years. The 2023 rate dropped to 4 brackets (4.4%-6.0%), 2024 saw further compression (4.4%-5.7%), and 2025 brought the brackets to 4.4%-4.82%. The final step in 2026 collapses everything into a single flat 3.8% rate. This makes Iowa one of the simplest state tax codes in the country — one rate, one deduction, minimal complexity. The reform was designed to attract workers and businesses to Iowa, especially from higher-tax Midwest neighbors like Minnesota and Wisconsin.

What is the school district surtax and do I have to pay it?▼

Iowa's school district surtax is a local tax that some (not all) school districts levy on residents' state income tax liability. It is not a tax on your income directly — it is a percentage of the Iowa state tax you already owe. Rates range from 0% to about 20%, set by voter-approved referendums in each district. For example, if your Iowa state tax is $2,956 and your school district surtax is 5%, you pay an additional $148. Major cities like Des Moines do not levy a surtax, but many suburban and rural districts do. You can look up your district's rate on the Iowa Department of Revenue website or on your county assessor's site.

Does Iowa have any local income taxes besides the school surtax?▼

No. Iowa does not have any city or county income taxes. The only local-level income-based tax is the optional school district surtax. This is simpler than states like Ohio (where many cities levy 1-3% municipal income taxes) or Maryland (which has mandatory county income taxes of 2.25%-3.20%). If your school district does not levy a surtax, your only income tax is the flat 3.8% state rate plus federal taxes.

Is the 3.8% flat rate better for everyone than the old system?▼

For most filers, yes. The old system's lowest bracket was 4.4% in 2025, so even low-income earners paid at least 4.4% on taxable income above the standard deduction. The new 3.8% rate is lower than every bracket in the old system. However, the 2022 reform also eliminated or reduced certain deductions and credits. Some taxpayers who previously claimed large state deductions (like federal tax paid deduction, which Iowa eliminated) may see a smaller net benefit. For the vast majority of W-2 employees, the flat rate means a straightforward tax cut.

How does Iowa compare to neighboring states?▼

Iowa's 3.8% flat rate is very competitive in the Midwest. Minnesota has a top rate of 9.85% — one of the highest in the nation. Wisconsin tops out at 7.65%. Nebraska's top rate is 4.55%. Illinois has a flat 4.95%. Missouri has a top rate of 4.8%. South Dakota has no income tax at all. On an $80K salary filing single, Iowa's $2,956 state tax bill is lower than Illinois ($3,196), significantly lower than Minnesota ($4,265) and Wisconsin ($4,143), and competitive with Missouri ($2,731). Only South Dakota ($0) beats Iowa in the immediate neighborhood. Combined with Iowa's low cost of living, the 3.8% rate makes the state increasingly attractive for remote workers choosing between Midwest locations.

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