Does Iowa tax retirement income?

Does Iowa tax Social Security?

Iowa does not tax Social Security benefits.

The taxable amount from your federal return is subtracted, with no income or age limit. Social Security still counts toward Iowa’s filing threshold and alternate-tax calculations.

Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.

Are pensions taxed in Iowa?

At 55 or older, all pension and retirement-plan income is excluded.

Since 2023, Iowa fully excludes retirement income from government and other pension or retirement plans — including IPERS, defined-benefit and profit-sharing plans and 457(b) — if you are 55 or older on December 31, disabled, or the surviving spouse or survivor of someone who qualified. On a joint return only the qualifying spouse’s income is excluded. Nonqualified deferred compensation and nonqualified annuities do not qualify.

Public vs. private pensions: Treated the same: both excluded at 55+.

Are IRA and 401(k) withdrawals taxed in Iowa?

At 55+, IRA and 401(k) withdrawals are fully excluded.

Traditional and Roth IRA, SEP, SIMPLE, 401(k), 403(b) and 457(b) distributions are fully excluded if you meet the 55+, disabled or survivor test; otherwise they are taxed at 3.8%.

Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.

Is military retirement pay taxed in Iowa?

Military retirement pay is fully excluded at any age.

What is Iowa’s income tax rate?

A flat 3.8%.

A flat 3.8% on all taxable income for 2025 and 2026, and for 2027 under current law.

Standard deduction and exemptions

Iowa starts from federal taxable income, so the federal standard deduction and the federal $6,000 senior deduction (2025–2028) flow through. Personal exemption credit: $40 per filer.

What tax breaks do seniors get in Iowa?

An extra $20 credit for each filer 65+ (or blind). Higher filing thresholds at 65+: $24,000 single, $32,000 joint. At 65+, if Iowa taxable income is under $100,000, you can deduct 100% of health and dental insurance premiums paid after tax, including Medicare Part B and Part D. An alternate tax calculation often helps filers 65+.

What changed for 2026?

No 2026-session change to the rate or the retirement exclusion was found (the 2026 session focused on property tax). Some older Department pages still show a superseded 3.9% rate for 2026; 3.8% is current law.

The 2026 rate is official; retirement rules come from the 2025 instructions and are unchanged by law.