Iowa · the numbers
Iowa figures at a glance, 2026
The Iowa numbers for the 2026 return in one place: the rate, the exemption credits, the low-income lines, the retirement and Social Security exclusions, the credits and their limits, the 529 deduction, the school surtax range, the estimated-payment threshold and the dates. Each with a line on what it means, and a short list of what changed from 2025. For anyone who files here, and for anyone checking a preparer’s work.
By Charles Trautman, EA, editor
Need to Know Tax · written from Iowa Department of Revenue sources, November 3, 2026; updated November 12, 2026 after the election · not yet reviewed by an Iowa practitioner
Iowa publishes fewer numbers than almost any state that taxes income, because since 2023 it borrows most of them from the federal return. There is no Iowa standard deduction, no personal exemption amount and no bracket table to index: the IA 1040 starts from federal taxable income and multiplies by 3.8%. What Iowa adds is a handful of fixed figures, $40 and $20 exemption credits, a low-income exemption at $9,000 and $13,500 that has not moved in years, a 15% earned income credit, a $500 tuition credit, and one indexed figure, the 529 deduction, which is $6,100 for 2026. The dates are Iowa’s own: April 30, not April 15.
Several 2026 figures below are the 2025 figures carried forward: the Department of Revenue had not published the 2026 IA 1040 instructions at this writing, and the items marked are not indexed, so they are expected to be unchanged.
The core figures
| Item | 2025 | 2026 | Note |
|---|---|---|---|
| Tax rate, all Iowa taxable income | 3.8% | 3.8% | Flat since 2025 (SF 2442); confirmed for 2026 by the Department on October 21, 2025. Wages, gains, dividends and interest alike. |
| Starting point | Federal taxable income | Federal taxable income | Form 1040 line 15, copied to IA 1040 line 2. Every federal deduction above or below the line already counts. |
| Iowa standard deduction | None | None | The federal one is the Iowa one: $16,100 single / $32,200 joint / $24,150 head of household for 2026, plus the federal additional amounts at 65 or blind. |
| Exemption credit, per taxpayer | $40 | $40 | Two on a joint or head of household return. A credit against tax, not a deduction; fixed in statute. |
| Exemption credit, per dependent | $40 | $40 | Federal dependents. Iowa’s only per-child item on the main form. |
| Additional credit, 65 or older or blind | $20 | $20 | Per person; 65 on or before January 1 following the tax year. |
| Low-income exemption, single | $9,000 | $9,000 | No Iowa tax when income is at or below the line. Not indexed; 2026 instructions to come. Measured with the standard deduction, senior deduction and QBI deduction added back. |
| Low-income exemption, joint / head of household / surviving spouse | $13,500 | $13,500 | Same test. Married filing separately uses $9,000 each and $13,500 combined. |
| Low-income exemption at 65 or older, single / joint | $24,000 / $32,000 | $24,000 / $32,000 | Either spouse 65 qualifies a joint return for the higher line. |
| Dependent’s own return, filing threshold | $5,000 | $5,000 | Iowa taxable income of a person claimed on someone else’s Iowa return. |
| Retirement income exclusion, age 55 or older, disabled, or survivor | 100%, no cap | 100%, no cap | Pensions, IRAs, 401(k)s, Roth conversions, on Schedule 1 line 7. Under 55 and not disabled: taxed at 3.8%. |
| Social Security | Not taxed | Not taxed | The federally taxable portion is subtracted on Schedule 1 line 5 at any age and income. |
| Military retirement and active duty pay | Not taxed | Not taxed | Schedule 1 lines 4 and 6, any age. |
| Health insurance premium deduction, 65 or older | Net income under $100,000 | Net income under $100,000 (verify) | Premiums not already deducted federally, Schedule 1 line 15. |
| Local income tax | School surtax 0%–20% of Iowa tax | 0%–20%; 2026 list to come | By the district where you lived on December 31; plus 1% EMS surtax in Appanoose, Cass, Pocahontas, Sac, Shelby and Winnebago counties (2025 list). IA 1040 line 19. |
The exemption credits are what Iowa has in place of a personal exemption: a married couple with two children gets $160 off the tax, and a retired couple both over 65 gets $120. They are not indexed and have not changed since the 2023 redesign.
The credits and deductions
| Item | Figure | Refundable? | Limit or note |
|---|---|---|---|
| Iowa earned income tax credit (IA 1040 line 25) | 15% of the federal EITC | Yes | Only for those who qualify federally; prorated for part-year and nonresidents by the IA 126 percentage. |
| Child and dependent care credit (line 24) | 75% of the federal credit below $10,000 of Iowa taxable income; 65% to $19,999; 55% to $24,999; 50% to $34,999; 40% to $39,999; 30% from $40,000 to $89,999 | Yes | Nothing at $90,000 or more; joint incomes combined. A percentage of federal Form 2441, so the larger 2026 federal credit enlarges it. |
| Early childhood development credit (line 24, instead of the credit above) | 25% of the first $1,000 of preschool-type expenses per child age 3 to 5; $250 maximum per child | Yes | Same $90,000 line. One or the other, not both. |
| Tuition and textbook credit, K-12 (line 9) | 25% of the first $2,000 per dependent; $500 maximum per child | No | Accredited nonprofit Iowa school or home instruction; tuition, books, required fees and supplies, some extracurricular fees. No income limit. |
| Volunteer firefighter, EMS and reserve peace officer credit (line 10) | $250 | No | Requires certification of service. |
| Nonresident / part-year resident credit (line 13, IA 126) | Tax times the share of income earned outside Iowa or before/after the move | No | Nonresidents file at $1,000 of Iowa-source net income. |
| Out-of-state tax credit (line 15, IA 130) | Lesser of the other state’s tax or the Iowa tax on the same income | No | Residents only. Not for Illinois wages, which are covered by reciprocity. |
| Composite and PTET credit (line 27, Schedule CC) | The owner’s share of Iowa tax the partnership or S corporation paid | Yes | Election under HF 352 (2023). |
| ISave 529 / IAdvisor 529 deduction (Schedule 1 line 14) | $6,100 per beneficiary per taxpayer | Deduction | Up from $5,800 for 2025; indexed. Treasurer’s plan-site figure; the Department’s 2026 page to come. Contributions through April 30, 2027 may count for 2026. |
| Iowa capital gain deduction (Schedule 1 line 16, IA 100 series) | Farm real property held 10 years with material participation or sold to a relative; retired farmers’ livestock (IA 100G, lifetime election); employee-owner stock; pre-2023 installment sales | Deduction | Everything else is taxed at 3.8%. No general gains deduction since 2023. |
| Retired farmer lease income exclusion (Schedule 1 line 18, IA 125) | Net income from a qualifying farm lease | Deduction | Lifetime election; cannot be combined with the IA 100G election; either forfeits the beginning farmer credit. |
Worked example: a family that touches most of the numbers
Married, both under 65, two children ages 7 and 10. Wages of $95,000 in 2026, federal standard deduction. One parent put $6,000 into each child’s ISave 529 account. School fees and required supplies of $1,200 for one child, $400 for the other. Child care of $6,000 for the younger child, producing a federal credit of 35%, $2,100. They live in a district with an 8% surtax.
| Federal AGI | $95,000 |
| Federal standard deduction | −$32,200 |
| Federal taxable income (IA 1040 line 2) | $62,800 |
| ISave 529 deduction: 2 × $6,000, each under the $6,100 cap (Schedule 1 line 14) | −$12,000 |
| Iowa taxable income (line 4) | $50,800 |
| Iowa tax at 3.8% (line 5) | $1,930 |
| Exemption credits: 4 × $40 (line 8) | −$160 |
| Tuition and textbook credit: 25% of $1,200 + 25% of $400 (line 9) | −$400 |
| Balance (line 18) | $1,370 |
| School district surtax, 8% of line 18 (line 19) | $110 |
| Child and dependent care credit: 30% of $2,100, Iowa taxable income in the $40,000–$89,999 band (line 24) | −$630 |
| Iowa tax and surtax after credits | $850 |
The $32,200 federal standard deduction is doing more for this family than any Iowa figure: it saves $1,224 of Iowa tax. The 529 deduction saves $456 and the two Iowa credits $1,030. Had the family’s Iowa taxable income reached $90,000, the $630 child care credit would have been $0.
Filing and payment figures
| Item | 2025 return | 2026 return | Note |
|---|---|---|---|
| Return due | April 30, 2026 | April 30, 2027 | Iowa’s own date, 15 days after the federal one. |
| Automatic extension to file | November 2, 2026 | November 1, 2027 | Six months, no form, only if 90% of the tax is paid by April 30. October 31, 2027 is a Sunday. A federal extension does not count. |
| Estimated payments required when expected Iowa tax on unwithheld income is | $200 or more | $1,000 or more | The 2026 change. Dates: April 30, June 30, September 30, January 31. |
| Underpayment safe harbor | 90% of this year or 100% of last year | Same | No 110% tier for high earners. Penalty figured on IA 2210. |
| Farmers and fishers (two-thirds of income) | One payment by Jan. 15, or file and pay by Mar. 1 | Jan. 15, 2027 / Mar. 1, 2027 | IA 2210F if filing by March 1. |
| Interest on unpaid tax | 10% a year | 10% a year for 2026; 9% a year for 2027 (0.8% a month) | Set each fall at average prime, rounded, plus 2 points; the 2026 rate was announced October 21, 2025. |
| Nonresident filing threshold, Iowa-source net income | $1,000 | $1,000 | IA 126 line 27. |
| Expected refund time, e-filed | 30 days | 30 days | Department’s stated processing window; paper takes longer. |
Beyond the income tax
| Item | 2026 |
|---|---|
| Inheritance tax | None for deaths on or after January 1, 2025 (SF 619, 2021). No estate tax, no gift tax. |
| Homestead exemption (property tax) | 10% of taxable value, minimum $5,500, maximum $20,000, from assessment year 2026 under SF 2472; first on bills payable September 2027. Replaces the credit on $4,850 of value. |
| Homestead exemption, owner 65 or older | $6,500 of taxable value; apply once by July 1 with the county assessor, form 54-028 |
| Elderly and disabled property tax credit | Age 65+ or totally disabled, 2025 household income under $26,895; maximum $1,000, rising to $1,500 under SF 2472 (verify first year); claim with the county treasurer by June 1 |
| State sales tax | 6%, plus a 1% local option tax nearly everywhere |
| Reciprocal state for wages | Illinois only. Forms IA 44-016 and IL-W-5-NR. |
What changed from 2025
- Estimated-payment threshold: $200 to $1,000 of expected Iowa tax on income without withholding, for tax years beginning on or after January 1, 2026.
- 529 deduction: $5,800 to $6,100 per beneficiary per taxpayer.
- Interest: 10% a year for 2026, announced October 21, 2025.
- Federal figures inside line 2: the standard deduction, the tips, overtime, senior and car-loan deductions, the $40,000 SALT cap and 100% bonus depreciation all reach the Iowa return through rolling conformity.
- Sports wagering withholding: Iowa tax withheld whenever federal tax is, from January 1, 2026 (SF 605).
- Homestead credit to exemption (SF 2472, May 18, 2026), retroactive to assessment year 2026, visible on bills from September 2027.
- Unchanged: the rate, the credits, the low-income lines, the retirement exclusion from 55, and the April 30 due date. The full story is in What’s new in Iowa for 2026.
Behind the scenes: why so little is indexed
Before 2023 Iowa indexed its brackets and its standard deduction every year. House File 2317 of 2022 removed the need: with the return starting at federal taxable income, the federal inflation adjustments to the standard deduction, the senior amounts and the EITC do Iowa’s indexing for it. What Iowa kept as its own, the $40 and $20 credits and the $9,000 and $13,500 low-income lines, was left as fixed dollars, so those figures erode a little each year. The 529 cap is the exception, indexed in the statute. Each October the Department now announces only two numbers: the rate, fixed at 3.8% unless the legislature acts, and the interest rate, which follows prime.
What to bring
- Last year’s IA 1040, so the figures can be compared line by line
- Dates of birth for everyone on the return; 65 adds $20 and raises the low-income line
- ISave 529 or IAdvisor 529 contribution statements, by beneficiary and contributor
- K-12 tuition, fee and supply receipts, by child and school
- Child care provider statements and federal Form 2441 figures
- Your school district number for your address on December 31, 2026
- 2026 Iowa estimated payments made, with dates
- For retirees: 1099-Rs and the SSA-1099, so the Schedule 1 subtractions are complete
Questions people ask
What is the Iowa income tax rate for 2026?
3.8% on all Iowa taxable income, the same as 2025. The Department of Revenue confirmed the rate on October 21, 2025.
What is the Iowa standard deduction for 2026?
Iowa does not have one. The return starts from federal taxable income, so the federal standard deduction, $16,100 single and $32,200 joint for 2026, or your federal itemized deductions, are already out before Iowa’s 3.8% applies.
Is there a personal exemption?
Not as a deduction. Iowa gives credits against the tax: $40 for each taxpayer, $40 for each dependent, and $20 more for each person 65 or older or blind.
Below what income do I owe no Iowa tax?
$9,000 single or $13,500 joint, head of household or surviving spouse, measured as Iowa taxable income with the standard deduction, senior deduction and QBI deduction added back; $24,000 and $32,000 if you or your spouse is 65 or older. These are the 2025 lines, which are not indexed and are expected to hold for 2026 until the Department publishes the 2026 instructions.
How much can I deduct for 529 contributions?
$6,100 per beneficiary per taxpayer for 2026, up from $5,800, according to the ISave 529 plan site. Both spouses can each deduct $6,100 for the same child, and contributions made by April 30, 2027 can be counted for 2026.
When are Iowa estimated payments required?
When the Iowa tax you expect on income without withholding is $1,000 or more. The threshold was $200 through 2025. Payments are due April 30, June 30, September 30 and January 31.
One rate, a few fixed credits, and the federal return doing the rest
Check line 2 against your federal return, add the Schedule 1 subtractions and the 529 deduction, and the Iowa numbers are done.
Written by Charles Trautman, EA, editor · Need to Know Tax, Lone Tree, Colorado
Questions about this article in Iowa are answered by [your practice name] · [your phone] · [your email address]. We’re looking for an EA or CPA in each Iowa city to hold that city’s seat and take this spot — is that you?
An invitation to Iowa EAs and CPAs
These Iowa pages were written by the editor from the Iowa Department of Revenue’s own publications, and they need an Iowa practitioner’s eye. One enrolled agent or CPA in each Iowa city holds that city’s seat: reads these pages before the filing season and is credited as a reviewer, is named on every page of their city’s edition, and answers its readers’ questions. $1,000 for the 2026 season, the charter price. Take your city’s seat (a two-minute form and a card), tell us you’re interested, write to editor@needtoknowtax.com, or read how it works.
Forms and official pages named in this article
- 2025 IA 1040, Iowa Individual Income Tax Return (41-001) and Schedule 1
- 2025 IA 126, Nonresident and Part-Year Resident Credit Schedule
- Iowa counties, school district numbers and surtax rates, 2025
- IA 1040 instructions: exemption credits
- IA 1040 instructions: Iowa taxable income and the low-income exemption
- IA 1040 instructions: who must file
- IA 1040 instructions: Iowa earned income tax credit
- IA 1040 instructions: child and dependent care credit and early childhood development credit
- IA 1040 instructions: tuition and textbook credit
- IA 1040 instructions: estimated payments and underpayment penalty
- Homestead Tax Credit and Exemption (form 54-028)
Sources and where to check
- IDR Announces 2026 Individual Income Tax and Interest Rates (October 21, 2025)
- IA 1040 expanded instructions: What’s New
- IDR: Tax Year 2025 Form Changes
- IDR: Individual taxes (due date, refund timing)
- ISave 529 (Iowa Treasurer of State): tax benefits, 2026 deduction
- Iowa Admin. Code 701-301.2: extension of time to file (the 90% rule)
- Iowa Code chapter 422 (2026)
- IDR: Iowa and Illinois reciprocal agreement
- IDR: 2023 Changes to Iowa Individual Income Tax