![]() ![]() Then, the Governor didn’t give any details on a plan or commit to trying to eliminate state income tax completely like Florida, Tennessee, Texas, South Dakota, Wyoming and others. Reynolds, like other Republicans, have indicated they plan to further lower taxes like during the Gubernatorial Debate on PBS in 2022. The newest round of cuts helped Iowa see a drop in revenue by $575 Million, but Iowa still has a state budget surplus after receiving federal funds. Republicans, who control both branches of the state legislature and the Governor’s Mansion, passed tax-cut legislation in 20. Reynolds signed a bill lowering the income tax rate to 3.9% for all Iowans by 2026 and eliminated state taxes on retirement income like 401K’s in 2022. Now I’m going to have to go to 2% on my individual income tax, trying to get to 0%. “The Republican Governors, that I’ve served with and work with, we are so damn competitive,” she said. Kim Reynolds (R) said she intends to lower the state’s income tax rate to 2% while “trying to get to 0%” in an interview with a conservative podcast published last Thursday. To receive notifications of resources and guidance issued by the Department, subscribe to updates by selecting the tax topics of interest.CEDAR RAPIDS, Iowa (KCRG) - Iowa Gov. This information was sent via GovDelivery to those subscribed to receive Law & Policy updates from the Department. Iowa has a 6.00 percent state sales tax rate, a max local sales tax rate of 1.00 percent. Iowa Code sections 422.4 defines procedures for the calculation of inflation factors. Iowa has a 5.50 percent to 8.40 percent corporate income tax rate. Indexation is meant to protect taxpayers from paying higher income taxes solely as a result of inflation. Iowa Code section 422.5 details indexation of Iowa income tax brackets. Indexation of the standard deductions is covered in Iowa Code sections 422.9 and 422.21. These tax features are determined each year by applying inflation factors to, or “indexing,” the previous year’s amounts. Iowa law provides for the indexation of individual income tax brackets and standard deduction amounts. Tax year 2022 income tax brackets are shown in the table below. $5,450 for married taxpayers filing jointly.$2,210 for married taxpayers filing separately.The tax year 2022 individual income tax standard deductions are: Individual Income Tax Standard Deductions The daily rate for 2022 is the annual rate divided by 365. The monthly rate is the annual rate divided by 12, rounded to the nearest one-tenth of a percentage point. ![]() Adding two percentage points results in the annual Department rate of 5.0 percent. Rounded to the nearest whole percent, this average is 3.0 percent. The prime rate averaged 3.25 percent over the past twelve months. ![]() Iowa law requires that this average be rounded to the nearest whole percent and two percentage points to be added to it. The annual rate is based on the average monthly prime rate during the preceding twelve month period, October through September. Iowa Code Section 421.7 specifies the procedures for calculating the Department’s annual and monthly interest rates. Starting January 1, 2022, the interest rate for taxpayers with overdue payments will be: Des Moines, Iowa – The Iowa Department of Revenue has finalized individual income tax brackets and individual income tax standard deduction amounts for the 2022 tax year (applicable for taxes due in 2023) and the 2022 interest rate, which the agency charges for overdue payments. ![]()
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