How Iowa taxes wages
Flat 3.8% since 2025, calculated from federal taxable income. Retirement income is exempt.
At $65,000 of wages, that is the 7th-lowest estimated bill of the 42 jurisdictions (including DC) that tax wages.
Its 3.8% rate is the 7th-lowest of the 16 flat-tax states.
Example: $65,000 salary, single filer
| Wages | $65,000 |
|---|---|
| Income not taxed (approx. deduction, exemptions) | −$16,100 |
| Income taxed | $48,900 |
| Flat rate | × 3.8% |
| Estimated Iowa income tax | $1,858 |
That works out to about $155 a month, or an effective rate of 2.86% of wages.
Calculators for Iowa
- Paycheck calculator
Take-home pay after federal income tax, Social Security, Medicare, and Iowa income tax, with Iowa selected.
- Tips and overtime calculator
Your federal deduction for qualified tips and overtime, with Iowa selected and its state rules applied to the Iowa estimate.
- Senior deduction calculator
A federal deduction of up to $6,000 for each person 65 or older, after the income phase-out.
- Car loan interest calculator
A federal deduction for interest on a loan for a new, U.S.-assembled vehicle.
Does Iowa tax tips and overtime?
Iowa follows the federal tips and overtime deduction. Iowa starts from federal taxable income and conforms automatically: “Iowa will conform with … no tax on tips, no tax on overtime.”
The example on this page taxes full wages. The tips and overtime calculator subtracts the deduction for your tips and overtime before it estimates your Iowa tax.
Source: Iowa Department of Revenue: impact of the One Big Beautiful Bill Act. Checked . See how every state treats tips and overtime
To see your federal deduction and Iowa tax together, open the tips and overtime calculator with Iowa selected.
Local income taxes in Iowa
Some school districts add a surtax as a percentage of state tax.
These local taxes are not included in the estimate above.
Iowa vs. neighboring states
Workers in South Dakota would owe less on the same salary. Missouri, Nebraska, Wisconsin, Minnesota, and Illinois would charge more.
| State | Est. tax on $65,000 | vs. Iowa |
|---|---|---|
| South Dakota | $0 | −$1,858 |
| Missouri | $2,152 | +$293 |
| Nebraska | $2,252 | +$393 |
| Wisconsin | $2,563 | +$705 |
| Minnesota | $2,932 | +$1,074 |
| Illinois | $3,073 | +$1,215 |
Official source
For forms, exact brackets, and filing deadlines, go to the official Iowa tax agency website.