Iowa Paycheck Calculator 2026 — Flat 3.8% Rate +IL reciprocity

How much do I take home in Iowa? — short answer first

Iowa completed a sweeping tax reform under HF 2317 (2022) — phasing the previous 9-bracket progressive structure (0.33-8.53%) into a flat 3.8% rate effective tax year 2026. HF 2317 also scheduled the repeal of Iowa's federal-income-tax-deductible quirk (similar to Alabama's), making 2026 the first Iowa filing year without it. Standard deduction conforms to federal ($14,600 single / $29,200 joint, indexed). The result: Iowa now has one of the simplest and most competitive flat-tax structures in the Midwest, on par with Indiana (2.95%), Kentucky (3.5% projected), and Michigan (4.25%). Iowa has reciprocity with Illinois only.

How Iowa taxes payroll in 2026

Iowa levies a flat 3.8% individual income tax under Iowa Code §422.5, effective tax year 2026 — the final step of HF 2317's multi-year phase-down. The reform passed in 2022 and progressively collapsed Iowa's previous 9-bracket progressive structure: 8.53% top rate (2022) → 6.5% (2023) → 5.7% (2024) → 4.4% (2025) → 3.8% flat (2026). The phase-down was unconditional (not subject to revenue triggers), so the 2026 rate is locked at 3.8%. HF 2317 also scheduled the repeal of Iowa's federal-income-tax-deductible provision (a quirk that allowed federal tax liability to be deducted from Iowa taxable income, similar to Alabama). Repeal is effective tax year 2026, so 2026 returns are the first to NOT include the federal deduction. This makes 2026 a meaningful inflection year for high-income Iowans, who lose the federal-deduction benefit but gain the flat 3.8% rate (vs the pre-2022 8.53% top). Iowa's standard deduction now fully conforms to the federal Internal Revenue Code (IRC §63): $14,600 single / $29,200 joint (2024), projected to ~$15,000 / $30,000+ for 2026 with annual inflation indexing. Iowa has no local income tax — historically Iowa allowed school district surtaxes (separate from income tax, calculated as a percentage of state tax liability), but the surtax mechanism is being phased out under HF 2317. Des Moines, Cedar Rapids, Davenport, and Iowa City all fund local services through property tax (effective rate ~1.52% statewide — among the higher Midwest rates) and 6% state sales tax + 1% local. Iowa maintains reciprocity with Illinois only — narrow but useful for the Quad Cities (Davenport-Moline-Rock Island) commuter economy. IA-IL workers file solely in their state of residence; the working state does not withhold income tax.

Iowa state income tax brackets (single filer, 2026)

Standard deduction (single): $14,600 · top marginal rate 3.80%. Married filing jointly + head of household brackets follow the same shape with adjusted thresholds.

Iowa city callouts

• Des Moines — Property tax ~1.65% effective; combined sales tax 7%; insurance + finance anchor; cost of living near US average.
• Iowa City + Cedar Rapids — Property tax ~1.55-1.70% effective; combined sales tax 7%; University of Iowa + healthcare + tech industries.
• Davenport (Quad Cities) — Property tax ~1.85% effective; daily commuter ties to Moline + Rock Island IL; reciprocity makes IL income tax-frictionless.

Reciprocity + multi-state notes

Iowa has reciprocity with Illinois only — narrow but critical for the Quad Cities (Davenport-Moline-Rock Island) commuter economy. IA-IL cross-border workers file solely in their state of residence; the working state does not withhold.

How to use this calculator

1. Enter your annual gross salary. Pre-tax, what your employer pays before any deductions.
2. Pick filing status. Single, married filing jointly, married filing separately, or head of household. Drives both federal and Iowa brackets.
3. Add 401(k) and HSA contributions (optional). Both lower your federal taxable income; HSA also lowers FICA wages.
4. Read the verdict. Annual + monthly + bi-weekly take-home, federal + state + local breakdown, and effective tax rate.

Common mistakes

• Confusing gross with adjusted gross. The calculator wants your gross salary — what your employer pays before any pre-tax deductions or contributions. If you enter your W-2 Box 1 (already net of 401k), the math will under-count your tax.
• Forgetting that 401(k) is still subject to FICA. Traditional 401(k) reduces federal income tax but NOT Social Security + Medicare. Only HSA (through payroll) reduces both.
• Using the wrong filing status for state tax. Iowa uses the same filing status categories as the IRS, but bracket thresholds differ from federal. Pick the status that matches your actual tax filing — not just what gives the best number.
• Ignoring multi-state implications. If you work in Iowa but live elsewhere (or vice versa), you may owe taxes in both states with a credit between them. This calculator assumes you both live and work in Iowa.

Methodology & Sources

Federal income tax + FICA: IRS Pub 15-T 2026 projected brackets + Social Security Administration 2026 wage base ($181,000) + Medicare 1.45% (no cap) + Additional Medicare 0.9% above $200K/$250K thresholds. Iowa state income tax: Iowa Department of Revenue — flat 3.8% individual income tax (2026, post-HF 2317) — last verified 2026-05-13. Brackets refresh annually — most state DORs publish updates in Q4 preceding the tax year. Federal 2026 figures are projected from 2025 (Rev. Proc. 2024-40) with ~2.5% inflation adjustment; refresh against IRS October release.

Frequently asked questions

Want to compare Iowa take-home pay against another state? Use the national take-home pay calculator with a flat-rate state input. To see what you'd save by changing your 401(k) contribution, drop the gross salary into the salary-to-hourly calculator. For cost-of-living adjustments when comparing jobs across states, the cost of living calculator adjusts for housing + groceries + tax differences between metros.