Iowa tax deductions and write-offs (2026)

No. Iowa fully exempts military retired pay from state income tax. Other retirement income: Since 2023, retirement income including pensions, 401(k)s, and IRAs is fully excluded for taxpayers 55+, disabled taxpayers, and surviving spouses/survivors of eligible individuals.

No. Since 2023, retirement income including pensions, 401(k)s, and IRAs is fully excluded for taxpayers 55+, disabled taxpayers, and surviving spouses/survivors of eligible individuals. Taxpayers under 55 who are not disabled or eligible survivors do not qualify.

No. No Social Security benefits have been taxable in Iowa since tax year 2014. Benefits are still counted in net income when deciding whether an Iowa return must be filed.

Yes: Iowa offers the Iowa Earned Income Tax Credit, 15% of the federal EITC (refundable). Must qualify for the federal EITC. You can file an Iowa return just to claim it. Prorated for part-year residents and nonresidents.

Only instead of income tax: itemizers in Iowa pick sales tax (6% state rate, about 6.94% with local taxes) or state income tax, whichever is bigger. Instead of sales tax, vehicles pay a one-time fee for new registration of 5% of the purchase price plus $10 when first titled or registered.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Iowa adds its own break: elderly and disabled property tax credit or rent reimbursement: 65+ with household income under $26,895, or totally disabled.

Yes: Iowa offers the Rent Reimbursement. Partial reimbursement of rent for low-income older and disabled renters, applied for through Iowa Health and Human Services rather than on the income tax return. Age 65+ or an adult with a disability; total household income under $26,895 for claim year 2025.

Partly: Iowa's value-based portion of annual registration fee is based on your vehicle's value, so it's deductible as personal property tax if you itemize. Annual fee is 1% of list price (reduced with age) plus 40 cents per 100 lbs; only the value portion is deductible.

Iowa has a flat 3.8% income tax and doesn't tax retirement income like pensions, IRAs, and 401(k)s for residents 55 and older.

Yes on your Iowa return: $6,100 per beneficiary per account owner (spouses each, up to $12,200 joint). Only contributions to the state's own plan count. Cap indexed annually; only account owners deduct; contributions by the April 30 filing deadline can count for prior year.

No state child tax credit, but Iowa has a child care credit: Refundable percentage of the federal credit, based on net income: 75% under $10,000; 65% for $10,000-$19,999; 55% for $20,000-$24,999; 50% for $25,000-$34,999; 40% for $35,000-$39,999; 30% for $40,000-$89,999. No credit at $90,000 or more. Dependent credit of $40 per dependent. Iowa also has a separate Early Childhood Development credit (not detailed here). Iowa does have an earned income credit: 15% of the federal EITC.

Yes, as a business expense: Iowa charges $50 to form an LLC; ongoing: $30 online / $45 paper biennial report. Due Jan 1-Apr 1 of each odd-numbered year.