The state of Iowa imposes an income tax on residents and those who earn income from an Iowa-based source who live outside of the state. This means that you must determine if you need to file a state income tax return each year, which is a separate process from the preparation and filing of your federal income tax return due to the Internal Revenue Service (IRS).
An overview of state income tax based on laws enforced by the Iowa Department of Revenue follows. If you need information about federal income tax return preparation and filing, see our “Tax Relief” page.
Who is required to file a state income tax return in Iowa?
Whether you must file a state income tax return in Iowa depends largely on where you live and your net income during the tax year.
For residents of Iowa, you must file a state income tax return if any of the following are true:
- You are under the age of 65, your filing status is Single, and your net income is $9,000 or more
- You are under the age of 65, your filing status is something other than Single, and your net income is $13,500 or more
- You are 65 years old or older, your filing status is Single, and your net income is $24,000 or more
- You are 65 years old or older, your filing status is something other than Single, and your net income is $32,000 or more
Net income for a resident of Iowa includes taxable income from all sources, not just those based in Iowa.
For non-residents of Iowa, you must file an Iowa state income tax return if your net income from sources based in Iowa is $1,000 or more and one or more of the following is true:
- Your net income from all sources is $9,000 or more and your filing status is Single
- Your net income from all sources is $13,500 or more and your filing status is something other than Single
Income from a sourced based in Iowa includes the following:
- Wages earned in Iowa
- Income from Iowa property, including rental income and capital gains on the sale of rental property
- Self employment income earned while working in Iowa
- Iowa unemployment benefits
- Iowa gambling winnings
- Income from pass-through entities, such as partnerships and S-corporations
What is the tax rate imposed on net income for Iowa state income tax purposes?
Iowa uses a marginal tax rate, which means that tax rate increases with the increase in taxable income. Iowa tax rates follow the table below:
|Taxable Income||Tax Rate|
|Up to $1,469||.36%|
|Up to $2,938||.72%|
|Up to $5,876||2.43%|
|Up to $13,221||4.5%|
|Up to $22,035||6.12%|
|Up to $29,380||6.48%|
|Up to $44,070||6.80%|
|Up to $66,105||7.92%|
Am I allowed to file an extension if I cannot file my taxes on time?
State income tax returns are due on April 30. If April 30 falls on a weekend or a holiday, tax returns are due the following non-holiday business day.
If you cannot file your tax return by April 30, you need to pay 90% of your estimated tax liability, which will give you an automatic extension through October 31. If you do not pay 90% of your estimated tax liability by April 30, you will be assessed a penalty. You will also be charged interest on any unpaid tax liability until you have paid 100% of the balance due.
How Can I get help with my state income tax return for Iowa?
You should speak with a tax attorney. If you call the number at the top of this web site, you can speak with a tax attorney who is familiar with Iowa state income tax law, as well as federal income tax preparation. He can answers your questions and help you file one or both tax returns.
- Kentucky State Income Tax Overview (taxlawhome.com)
Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.