New Iowa W4 2025. Employers doing business in iowa are required to withhold iowa individual income tax from the wages and salaries of nonresident employees working in iowa at the same rate as. 1, 2025, iowa's income tax will drop to a 3.8% flat rate for all taxpayers โ down from a top income tax rate of 5.7% in 2024.
The 2025 tax rates and thresholds for both the iowa state tax tables and federal tax tables are comprehensively integrated into the iowa tax calculator for 2025. Enacted in may, 2024, this law establishes a 3.80 percent flat tax rate on iowa individual income beginning january 1, 2025.