State Tax in Iowa

According to Iowa taxation law, state tax is imposed on the net income of individuals, estates and trusts.

Who Must File -

  • If you are a resident or a part-year resident of Iowa, you must file.
  • You must also file if you are a non-resident and have earned income from the State of Iowa of $1,000 or more.
  • You must file if you are in the military and Iowa is listed as your legal residence, but you are stationed out of state.

There are nine tax brackets for Iowa state taxes. Income Tax Rates in Iowa are as follows -

  • 0.36 per cent on the first $1,343 of taxable income
  • 0.72 per cent on taxable income between $1,344 and $2,686
  • 2.43 per cent on taxable income between $2,687 and $5,372
  • 4.5 per cent on taxable income between $5,373 and $12,087
  • 6.12 per cent on taxable income between $12,088 and $20,145
  • 6.48 per cent on taxable income between $20,146 and $26,860
    6.8 per cent on taxable income between $26,861 and $40,290
  • 7.92 per cent on taxable income between $40,291 and $60,435
  • 8.98 per cent on taxable above $60,436

 

Due Date for State Tax in Iowa -

  • Taxes for the current year are due on April 30th of the following year. This is effective when filing paper returns as well as electronic returns. If April 30th happens to fall on a holiday or weekend, the return will be extended to the Monday following the 30th.
  • It is important to file on time whether or not you can pay the full tax that is due. Filing late will cost you an extra five per cent in penalties per Iowa taxation law.
  • If you file on time and can only pay a portion of the amount due, you will be billed for the balance of the tax that is due. There is a 10 per cent penalty if filing late and five per cent if filed on time, but not paid in full. You will never be assessed both penalties.
  • Penalties are assessed if less than 90 per cent of tax is paid.

Credits That Are Offered:

  • Earned income credits
  • Child and dependent care credit
  • pension exclusion
  • tuition and textbook credit
  • health insurance deduction

One Iowa tax law, the Alternate Tax Computation, benefits low income taxpayers. Low income taxpayers must have a net income of $13,500 and not file single. The Alternate Tax Computation also benefits taxpayers who are 65 or over. They must be 65 or older in the tax year.

If you are facing a tax audit, or other tax law issues, consult with a tax attorney in your area to discuss your options.
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