Iowa Taxes for Individuals and Businesses, 2025 Tax Year

Iowa taxes personal income at a flat 3.8%, plus a school district surtax that is a share of your Iowa tax. A sole proprietor owes no separate business tax. LLCs and corporations file a $30 report every two years. C corporations pay corporate income tax at 5.5% on the first $100,000 and 7.1% above that.

Personal income tax

Iowa residents file the IA 1040, due April 30, 2026. The rate is a flat 3.8% for every filing status. Iowa starts from your federal taxable income, not your adjusted gross income, so the federal standard deduction is already taken out. That is why Iowa has no deduction or personal exemption of its own.

Instead, Iowa gives an exemption credit off the tax: $40 for each person on the return, plus $20 more for each of you aged 65 or over. Then comes the school district surtax. It is a percentage of your Iowa tax, not of your income, and it runs from 0% to 20% depending on your district. Living in Appanoose, Cass, Pocahontas, Sac, Shelby or Winnebago County adds 1 more percentage point.

Iowa also has an alternate tax calculation that can come out lower, most often for head of household filers and people 65 or older.

Return: IA 1040
Due date: April 30, 2026
Rate: 3.8% for every filing status
Starting point: Federal taxable income, so no separate Iowa deduction or exemption
Exemption credit: $40 a person, plus $20 for each person 65 or over
School district surtax: 0% to 20% of your Iowa tax, by district, and 1 point more in Appanoose, Cass, Pocahontas, Sac, Shelby or Winnebago County
Retirement income: Exempt for people 55 and over

Sole proprietor

A sole proprietor with no LLC owes Iowa nothing at the business level. The biennial report is for registered businesses only, so there is no report and no fee.

Your business profit is taxed on your own IA 1040, at the personal rate above.

Single-member LLC

Every Iowa LLC files a biennial report with the Secretary of State, however few members it has. It is due every two years, in odd-numbered years only, between January 1 and April 1. The fee is $30 filed online and more on paper, and it is owed whatever the business earned.

There is nothing to file in an even-numbered year, which is why the report gets missed. An LLC that still has not filed by August is dissolved. The LLC's profit is taxed on your own IA 1040.

Partnership

An Iowa partnership files Form IA 1065, the Iowa partnership return. The profit passes through to the partners, who report it on their own returns.

A partnership set up as an LLC also files the $30 biennial report in odd-numbered years, between January 1 and April 1.

S corporation

An Iowa S corporation files Form IA 1120S, the Iowa S corporation return. The profit passes through to the shareholders, who report it on their own returns.

It also files a $30 biennial report every two years, in even-numbered years, between January 1 and April 1. That is the opposite year from an LLC.

C corporation

A C corporation files Form IA 1120 and pays corporate income tax at 5.5% of the first $100,000 of Iowa taxable income and 7.1% of the rest. A corporation selling into other states counts only its Iowa share, measured by Iowa sales over total sales.

Iowa cuts these rates whenever its corporate income tax brings in more than $700,000,000 in a year, and keeps cutting until everything is taxed at 5.5%. So the rates only ever go down, and a figure from an earlier year will be too high.

It also files the $30 biennial report in even-numbered years, between January 1 and April 1.

Return: Form IA 1120
Corporate income tax: 5.5% of the first $100,000, 7.1% above
Multi-state profit: Iowa sales over total sales
Biennial report: $30, in even-numbered years

Estimate your state tax

Pick your business type and enter this year's numbers to see the state business tax Iowa charges. It assumes all your sales are in Iowa.

An estimate for planning, not tax advice.

Sources

Iowa 2025 IA 1040 form
Iowa IA 1040 expanded instructions
Iowa counties, school district numbers and surtax rates for 2025
sos.iowa.gov Fast Track Filing: how to file a Biennial Report, the fee and the window
revenue.iowa.gov 2025 IA 1120, page 6 Tax Rates: "$100,000 or less; multiply line 13 by 5.5% (.055)" and "Over $100,000; multiply line 13 by 7.1% (.071) and subtract $1,600"
revenue.iowa.gov Iowa Corporate Income Tax Rates: the $700 million revenue trigger

Last reviewed August 2026.