Iowa Standard Deduction 2025. Iowa provides a standard personal exemption tax credit of $ 40.00 in 2025 per qualifying filer and $ 40.00 per qualifying dependent (s), this is used to reduced the amount of iowa state income that is due in 2025. For 2025, the standard deduction will rise by $400 to $15,000 for single filers, $800 to $30,000 for married couples filing jointly, and $600 to $22,500 for heads of household.
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%.