Personal Income Tax in Iowa

April 13, 2006

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If you are a resident or nonresident of Iowa and receive taxable income individually from property owned or business transacted in Iowa, you are subject to tax on net income. Therefore, if you are operating your business as an S corporation, partnership, limited liability company, or sole proprietorship, you will be subject to a personal income tax on your business income that passes through to you. In addition, school districts in Iowa are authorized to levy a local income tax, so be sure to check with your local government.

The following 2006 income tax rates are for all filing statuses and apply to the amount of income over the exempted amount:

Taxable Income	Amount of Tax
Over $0, but not over $1,300	0.36%
Over $1,300, but not over $2,600	$4.68 plus 0.72% of excess over $1,300
Over $2,600, but not over $5,200	$14.04 plus 2.43% of excess over $2,600
Over $5,200, but not over $11,700	$77.22 plus 4.50% of excess over $5,200
Over $11,700, but not over $19,500	$369.72 plus 6.12% of excess over $11,700
Over $19,500, but not over $26,000	$847.08 plus 6.48% of excess over $19,500
Over $26,000, but not over $39,000	$1,268.28 plus 6.80% of excess over $26,000
Over $39,000, but not over $58,500	$2,152.28 plus 7.92% of excess over $39,000
Over $58,500	$3,696.68 plus 8.98% of excess over $58,500

The following 2007 income tax rates are for all filing statuses and apply to the amount of income over the exempted amount:

Taxable Income	Amount of Tax
Over $0, but not over $1,343	0.36%
Over $1,343, but not over $2,686	$4.83 plus 0.72% of excess over $1,343
Over $2,686, but not over $5,372	$14.50 plus 2.43% of excess over $2,686
Over $5,372, but not over $12,087	$79.77 plus 4.50% of excess over $5,372
Over $12,087, but not over $20,145	$381.95 plus 6.12% of excess over $12,087
Over $20,145, but not over $26,860	$875.10 plus 6.48% of excess over $20,145
Over $26,860, but not over $40,290	$1,310.23 plus 6.80% of excess over $26,860
Over $40,290, but not over $60,435	$2,223.47 plus 7.92% of excess over $40,290
Over $60,435	$3,818.95 plus 8.98% of excess over $60,435