Iowa retirement taxes at a glance (2026)
| State income tax | Flat 3.8%Iowa has a flat 3.8% income tax, in effect since tax year 2025. |
|---|---|
| Social Security | Not taxedIowa has not taxed Social Security benefits since 2014. |
| Pensions | Not taxedResidents 55 or older (or disabled, or qualifying survivors) can exclude pensions and other retirement income from Iowa tax. |
| 401(k) and IRA withdrawals | Not taxedIRA, 401(k) and deferred compensation distributions are excluded for residents 55 or older; younger residents are taxed. |
| Government pensions | Not taxedGovernment pensions are covered by the retirement income exclusion for residents 55 or older. |
| Military retirement pay | Not taxedMilitary retirement pay is excluded at any age. |
| Estate tax | No |
| Inheritance tax | NoIowa repealed its inheritance tax for deaths on or after January 1, 2025. |
| Property tax help for seniors | Homeowners 65+ get a $6,500 homestead exemption from taxable value. Low-income seniors can get a property tax credit of up to $1,000. |
| Sales tax | State sales tax is 6%; the average combined rate is about 6.94%. |
Recent changes and good to know
- Iowa moved to a flat 3.8% rate in 2025.
- Inheritance tax eliminated from 2025.
How to lower your retirement taxes in Iowa
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Iowa too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does Iowa tax retirement income?
No for residents 55 and older: Iowa exempts Social Security and retirement income for this group.
Does Iowa tax Social Security?
Iowa has not taxed Social Security benefits since 2014.
Does Iowa tax pensions?
Residents 55 or older (or disabled, or qualifying survivors) can exclude pensions and other retirement income from Iowa tax.
Does Iowa tax 401(k) and IRA withdrawals?
IRA, 401(k) and deferred compensation distributions are excluded for residents 55 or older; younger residents are taxed.
Does Iowa tax military retirement pay?
Military retirement pay is excluded at any age.
Does Iowa have an estate or inheritance tax?
Iowa repealed its inheritance tax for deaths on or after January 1, 2025.
Sources (last verified 2026)
- Iowa State Tax Guide — AARP (2026-03-31)
- Retirement Taxes: How All 50 States Tax Retirees — Kiplinger (2026)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026-02-17)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.