Iowa Tax Calculators.
Tax year 2026 income tax rates, brackets, and sales tax for Iowa. Returns for tax year 2026 are generally filed in 2027; source links and last-verified dates are shown below.Tax year 2026 means income earned during calendar year 2026; those returns are generally filed in 2027. State and local sales tax rates can change during the year, so confirm current rules before filing or remitting tax.
Income Tax
Iowa transitioned to a flat income tax of 3.8% in 2026, down from a progressive system. This is the result of major tax reform legislation passed in 2022 that phases in rate reductions over several years.
| Taxable Income | Rate |
|---|---|
| All taxable income | 3.8% |
Sales Tax
Groceries are exempt from sales tax. Prescription drugs are exempt.
Iowa's new 3.8% flat rate is below the national average, a significant improvement from its previous top rate of 8.53% that existed just a few years ago.
What is Iowa's income tax rate?
Iowa has a flat income tax rate of 3.8% as of 2026. This is the result of a multi-year phase-down from a progressive system that had rates up to 8.53%.
Does Iowa tax groceries?
No, groceries (unprepared food) are exempt from Iowa's 6% state sales tax.
How has Iowa's tax system changed?
Iowa passed major tax reform in 2022 that transitioned from a progressive system (4 brackets, top rate 6%) to a flat 3.8% rate by 2026. The reform also reduced corporate rates.