Retiring in Iowa: how your income is taxed
Iowa is very tax-friendly for retirees. On a typical retirement income it ranks tied for #1 of 51 with 18 other states for the lowest state income tax.
The rules in Iowa
- Social Security: Iowa does not tax Social Security benefits for any resident, at any age or income.
- Pensions: Since tax year 2023 (HF 2317), qualifying retirement income is fully excluded with no cap for people 55+ by Dec 31, disabled people, and eligible surviving spouses. This covers defined-benefit pensions, including IPERS. Under 55 it is taxed. Nonqualified deferred compensation and nonqualified annuities do not qualify.
- 401(k), 403(b) and IRA withdrawals: Traditional, Roth, SEP and SIMPLE IRAs, 401(k), 457(b) and Keogh withdrawals are fully excluded at 55+ (or disabled/surviving spouse). They are taxed under 55.
- At 65 and older: Iowa starts from federal taxable income, so the extra federal standard deduction at 65 and the federal senior deduction (up to $6,000 per person, 2025–2028) carry over, and each filer 65 or older gets an extra $20 exemption credit.
Calculate your Iowa retirement taxes
State income tax in Iowa: $0 a year
In Iowa, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Iowa you'd pay about $0 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $65,664 (6.2% total).
Iowa ranks tied for #1 of 51 with 18 other states for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Iowa
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $0 | $0 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $0 | $0 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Iowa's main exclusions and may differ for income-tested credits.
Moving to Iowa in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Iowa come from (IRS migration data, 2022–2023).
Frequently asked questions
Does Iowa tax Social Security?
Not taxed. Iowa does not tax Social Security benefits for any resident, at any age or income.
Does Iowa tax pensions?
Not taxed. Since tax year 2023 (HF 2317), qualifying retirement income is fully excluded with no cap for people 55+ by Dec 31, disabled people, and eligible surviving spouses. This covers defined-benefit pensions, including IPERS. Under 55 it is taxed. Nonqualified deferred compensation and nonqualified annuities do not qualify.
Does Iowa tax 401(k) and IRA withdrawals?
Not taxed. Traditional, Roth, SEP and SIMPLE IRAs, 401(k), 457(b) and Keogh withdrawals are fully excluded at 55+ (or disabled/surviving spouse). They are taxed under 55.
Is Iowa a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Iowa charges about $0 in state income tax, ranking tied for #1 of 51 with 18 other states (lowest tax first).
Related
Sources: revenue.iowa.gov, revenue.iowa.gov (2). Rules reviewed .