Iowa Tax Cuts – Robert Bell, CPA, Auditor

A flat tax bill passed the Iowa House and Senate last week and is expected to be signed by Governor Reynolds. Under current Iowa law, the highest personal income tax bracket will be 6.5% in 2023. With the new bill, the highest personal rate will be reduced to 6.0% in 2023, 5.7% in 2024, 4.8% in 2025 and 3.9% for 2026 and thereafter. In addition, Iowans will no longer pay taxes on retirement income. Further, this legislation cuts the top corporate rate gradually from the existing 9.8% to an eventual 5.5% and will also pare down some Iowa corporate tax credits. Governor Reynolds is expected to sign the bill soon.