Individual Income Tax

Stay up to date with email updates

Iowa has nine individual income tax brackets that are indexed annually.

2017 individual income tax brackets:

Taxable Income
Over But Not Over Tax Rate
$0 $1,573 0.36%
$1,573 $3,146 0.72%
$3,146 $6,292 2.43%
$6,292 $14,157 4.50%
$14,157 $23,595 6.12%
$23,595 $31,460 6.48%
$31,460 $47,190 6.80%
$47,190 $70,785 7.92%
$70,785 —— 8.98%

Source: Iowa Department of Revenue

How do Iowa individual income tax rates compare with other Midwest states and when was the last time their rate changed?

 

  • Iowa has the 2ND HIGHEST top individual tax rate (8.98%) in the midwest.
  • 10 of 14 midwest states have cut tax rates since Iowa last cut taxes in 1998.
  • Two states, Kansas and Illinois, have increased tax rates and are still lower than Iowa’s rate.
StateTop Individual Income Tax RateLast Change to Tax Rate
Arkansas6.9%Cut in 2015
Illinois4.95%Increased in 2017
Indiana3.23%Cut in 2015
Iowa8.98%Cut in 1998
Kansas5.5%Increased in 2017
Michigan4.25%Cut in 2011
Minnesota9.85Cut in 1999
Missouri5.9%Cut in 2018
Nebraska6.84%Cut in 2014 (indexed for inflation)
Ohio4.997%Cut in 2015
Oklahoma5.0%Cut in 2015
North Dakota2.9%Cut in 2015
South Dakota0% - No State Income Tax
Wisconsin7.65%Cut in 2014

Source: Tax Foundation Facts & Figures 2017; ALEC. Some rates may come down, but only after certain triggers are met.

 

Iowa Individual Income Tax History

Tax Year Rates and Income Tax Brackets
1934 Graduated rates imposed ranging from 1.0% to 5.0% over 5 taxable income brackets with a top bracket of $4,000
1953 Rates lowered to range from 0.75% to 3.75% over 5 taxable income brackets with top bracket raised to $5,000
1955 Rates increased to range from 0.8% to 4.0% over 5 taxable income brackets with the top bracket lowered to $4,000
1957 Rates lowered to range from 0.75% to 3.75% over the same taxable income brackets
1965 Rate changed to range from 0.75% to 4.5% over 6 taxable income brackets with the top bracket of $9,000
1967 Additional bracket and new top 5.25% rate introduced.
1971 Rates increased on all brackets except lowest two, rates ranging from 0.75% to 7.0%
1975 Rates ranging from 0.5% to 13.0% over 13 taxable income brackets with the top bracket of $75,000
1979 One-time indexation of brackets, raising top bracket to $76,725
1987 Rates changed to 0.4% to 9.98% over 9 taxable income brackets with the top bracket of $45,000
1996 Annual indexation of brackets instituted
1998 All tax rates cut 10% reducing the 9 bracket rates to 0.36%- 8.98%. The top bracket of $45,000 was indexed to $51,660.

Source: Iowa Department of Revenue