Iowa Take-Home Pay Calculator (2026)

Iowa has been cutting its income tax aggressively in recent years. The top rate for 2026 is 5.7%, down from 8.53% in 2022. A 2022 law set Iowa on a path of annual rate reductions, with the goal of reaching a flat 3.9% by 2026. Whether the full reduction to 3.9% lands on schedule depends on state revenue projections, but the trend is clearly downward. Workers in Iowa are paying meaningfully less in state income tax than they were four years ago.

Iowa uses multiple brackets below the top rate. The structure for 2026 has lower rates for the first tiers of income and reaches 5.7% on higher earnings. For a worker earning $55,000, the effective Iowa rate is roughly 4.5% to 5%, depending on deductions. Iowa allows workers to deduct federal income taxes paid from Iowa taxable income, similar to Alabama, which reduces the state tax burden for anyone paying significant federal taxes.

Married couples in Iowa file separately on a combined return, which is an unusual requirement. This can affect withholding calculations and sometimes results in unexpected balances due or refunds at tax time. Workers who are newly married and filing jointly for the federal return need to understand that Iowa uses a different treatment.

Iowa has no local income taxes. Des Moines and other cities do not add a city-level wage tax on top of the state rate. Given that the state rate is declining, Iowa is becoming a more competitive state for workers on income tax grounds. A $70,000 earner currently saves approximately $700 to $1,000 per year in state income tax compared to 2022, and more savings are scheduled to follow.