Iowa Income Tax Rate 2025. Since the enactment of iowa senate file 2442 in may, 2024, iowa law provides for a flat tax rate of 3.8 percent for all levels of taxable individual income beginning with tax year 2025. On may 1, 2024, iowa governor kim reynolds approved sf 2442, which, effective january 1, 2025, collapses the personal income tax brackets from three to a single tax rate of 3.8%.
Kim reynolds signed a bill wednesday that allows iowaโs flat income tax rate to go into effect in tax year 2025, a year earlier than planned, and at. Since the enactment of iowa senate file 2442 in may, 2024, iowa law provides for a flat tax rate of 3.8 percent for all levels of taxable individual income beginning with tax year.