Iowa taxes and cost of living (2026)
Iowa has a flat 3.80% income tax. A $100,000 salary is worth about $77,974 a year in national buying power after every tax and Iowa's prices, #6 of 51 (the state average is $70,397). Retiring on $50,000 a year takes about $1.14M, #5 lowest.
- State income tax
- 3.80%
- Sales tax (avg. combined)
- 6.94%
- Property tax (effective)
- 1.29%
- Cost of living
- 87.8
- US = 100
- Social Security taxed?
- No
- Median home
- $227K
Take-home pay in Iowa
Single filer, 10% of salary to a pre-tax 401(k), standard deduction, renting. All taxes include estimated sales tax.
| Salary | Federal | FICA | State + local | All-in tax rate | Take-home | In US dollars |
|---|---|---|---|---|---|---|
| $50,000 | $3,220 | $3,825 | $1,148 | 17.4% | $36,807 | $41,939 |
| $75,000 | $6,020 | $5,738 | $2,048 | 19.4% | $53,694 | $61,182 |
| $100,000 | $10,970 | $7,650 | $2,948 | 22.5% | $68,432 | $77,974 |
| $150,000 | $21,134 | $11,475 | $4,748 | 25.9% | $97,643 | $111,259 |
| $250,000 | $43,304 | $15,514 | $8,348 | 27.8% | $157,834 | $179,843 |
What it takes to retire in Iowa
Married couple, age 60, withdrawals 60% from 401(k)/IRA, 20% Roth, 20% brokerage, no Social Security yet, renting. Spending at US-average prices.
| Spending | At IA prices | Income taxes | All taxes | FI number |
|---|---|---|---|---|
| $40,000 | $35,105 | $0 | $780 | $877.6K |
| $60,000 | $52,657 | $0 | $1,169 | $1.32M |
| $80,000 | $70,210 | $1,056 | $2,615 | $1.78M |
| $120,000 | $105,314 | $3,473 | $5,811 | $2.72M |
Iowa tax rules at a glance
- Income tax: Iowa has a flat 3.80% income tax. Flat 3.8% (SF 2442, in effect since tax year 2025). Iowa computation starts from federal taxable income, so the federal standard deduction applies (2026: $16,100 single / $32,200 MFJ under OBBBA; Iowa conforms to the IRC automatically, with exceptions). $40 personal exemption credit per person (and per dependent). Federal income tax is no longer deductible.
- Local income tax: School district income surtax, charged as a percentage of Iowa tax liability (district rates range 0% to ~20%; most 0-12%). Roughly 0.2% of taxable income at a typical ~6% surtax on 3.8% tax (estimate). Some counties (e.g. Appanoose, Wapello) also levy small EMS surtaxes.
- Social Security: Not taxed. Fully exempt.
- Retirement income: Retirement income (pensions, IRA, 401(k), annuities) fully excluded for taxpayers 55+, disabled, or surviving spouses.
- Capital gains: Taxed at 3.8%. Capital gain deduction for certain gains (e.g. real property used in a business held 10+ years, certain farm property, employer stock).
- Sales tax: 6.00% state rate, 6.94% average with local taxes; groceries exempt.
Compare Iowa with
Frequently asked questions
Does Iowa have a state income tax?
Iowa has a flat 3.80% income tax. Flat 3.8% (SF 2442, in effect since tax year 2025). Iowa computation starts from federal taxable income, so the federal standard deduction applies (2026: $16,100 single / $32,200 MFJ under OBBBA; Iowa conforms to the IRC automatically, with exceptions). $40 personal exemption credit per person (and per dependent). Federal income tax is no longer deductible.
How much is $100,000 after taxes in Iowa?
A single filer earning $100,000 who puts $10,000 in a 401(k) takes home about $68,432 after federal, state and local income taxes and payroll taxes, an all-in effective rate of 22.5% including estimated sales tax.
Does Iowa tax Social Security?
No. Iowa does not tax Social Security benefits. Fully exempt.
How much do you need to retire in Iowa?
To spend $50,000 a year (at US-average prices) with withdrawals mostly from a 401(k)/IRA, you'd need about $1.14M in Iowa using the 4% rule, after its cost of living and taxes.
Is Iowa expensive to live in?
Iowa's cost of living index is 87.8, where the US average is 100 (BEA Regional Price Parities, 2024). The median home is worth about $227,300 and median rent is $981 a month.
How this is calculated
- Income taxes use 2026 federal and state brackets, standard deductions and personal exemptions or credits. No itemized deductions or other credits. Local income taxes use a typical statewide rate (for example, Maryland's county taxes or New York City's); many places have none.
- Payroll taxes include Social Security (6.2% up to the wage base), Medicare, and employee-paid state programs such as California SDI or Washington's paid leave premium. A married household salary is treated as two equal earners for payroll-tax caps.
- Cost of living uses the Bureau of Economic Analysis's Regional Price Parities (2024), where the US average is 100. Spending you enter at national prices is scaled by each state's index.
- Sales tax is estimated as the average combined state and local rate on about a third of spending (more where groceries are taxed). It is shown for context but not added to costs, because the price parities already include it. Property tax applies the state's effective rate to its median home value (Census ACS 2024) if you own.
- Retirement solves for the withdrawal that covers your spending plus the taxes it triggers, using each state's treatment of Social Security, retirement-account withdrawals and capital gains, then multiplies by 25 (a 4% withdrawal rate).
- Years to FI starts from zero, adds what you save each year in that state, and grows it at a 5% real return until it reaches that state's FI number.
Estimates for comparison, not tax advice. Your actual taxes depend on deductions, credits, where in the state you live and more. Sources: BEA Regional Price Parities, Census ACS, state sales tax rates, IRS, state revenue departments (per state).