- Statewide: 6.0%
- Counties can levy an additional sales tax of no more than 1.0%.
- Current average sales tax (with local taxes included): 6.94%
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: Exempt
- Gasoline Tax: 48.40 cents/gallon (Includes all state, local, and federal taxes)
- Diesel Fuel Tax: 56.90 cents/gallon (Includes all state, local, and federal taxes)
Personal Income Tax
- Personal Income Tax Rate Range: Nine brackets from .33% to 8.53% (on income over $78,435). Rates move to between 4.4% and 6.0% in 2023.
- Standard deduction, Single Filing Status: $2,210. Married Filing Jointly: $5,450
- Personal Exemption Allowance: $40. Dependent Exemption: $40 (taken as tax credit)
- Itemized Deductions Allowed? Yes, subject to limitations
- State allows city- and and county-level income tax.
- Retirement Income
- Social Security: Exempt
- IRAs: Taxable at ordinary income tax rates*
- 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
- Private pensions: Taxable at ordinary income tax rates*
- Public Pensions: Taxable at ordinary income tax rates*
- Taxpayers 55 and older, disabled, or a qualifying surviving spouse can exclude up to $6,000 of certain retirement income.
- Federal income tax deductible.
- Beginning in 2023, all retirement income is exempt if 55 or older.
- Military Pay
- Active Duty Pay: Exempt
- Military Retirement Pay: Exempt
- Military Disability Pay: Exempt
- VA Disability Dependency & Indemnity Compensation Benefits: Exempt
- SPB/SSPB/RCSBP: Exempt
- Local municipalities average 1.57% of the property's assessed value.
- Calculation of assessed value: 100% of fair market value, but can't increase more than 3% annually; assessed every odd-numbered year.
- Relief programs for:
- Owner-occupied: May be eligible for reduction of $4,850 of assessed value.
- Veterans: Exemption of up to $1,852 if meet certain requirements.
- 65 to 69 or Disabled: May be eligible for tax credit of up to $1,000 if income is less than $24,354. Relief also available for renters.
- 70 and over: Up to a $1,000 credit based on income requirements.
- Disabled Veterans: May be eligible for 100% exemption if 100% service-related disability.
- Personal Property Tax: Yes. Rates and exemptions vary.
Inheritance & Estate Taxes: An inheritance tax of 3% to 9% is imposed on estates over $25,000, but most family members are exempt. There is no estate tax.
Department of Revenue website: www.tax.iowa.gov