Iowa Tax Guide
3.8%top marginal rate
Iowa transitioned to a flat income tax of 3.8% in 2026, down from a progressive system. The state has been aggressively cutting taxes to remain competitive with neighboring states. Property taxes are above the national average.
Iowa Tax at a Glance
Income Tax
3.8%
Flat rate
Sales Tax
6%
State-level rate
Property Tax
1.57%
43% above the national average
Estate Tax
No
No state estate tax
How Iowa Compares to the National Average
Notable Tax Facts
- Phasing to a flat 3.8% income tax rate by 2026 — down from a top rate of 8.53% in 2021
- Eliminated its inheritance tax completely as of 2025
- Property taxes are notably higher than the national average
- The state has been on an aggressive tax reform path
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Iowa Tax FAQ
What is Iowa's income tax rate?
Iowa is transitioning to a flat income tax rate of 3.8% by 2026, a dramatic reduction from its previous top rate of 8.53%. The state has been phasing in reductions over several years.
Does Iowa have an inheritance tax?
No. Iowa phased out its inheritance tax completely as of January 1, 2025. This was a significant change as the tax had been in place for over a century.
Are Iowa property taxes high?
Yes. Iowa's effective property tax rate of about 1.57% is above the national average. However, rollback adjustments and homestead credits help reduce the burden.
Does Iowa tax Social Security?
Iowa does not tax Social Security benefits.
Compare With Other States
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Educational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.