Iowan’s tax bills took another dip this year, as the state’s individual income tax rate dropped by nearly 2 percentage points in 2025.
The comprehensive tax reform, signed by Gov. Kim Reynolds into law last spring, lowers the individual income tax from its top rate of 5.7% to a single flat rate of 3.8% in 2025. That’s significantly lower than the peak rate of nearly 9% about six years ago when state lawmakers began reducing the personal income tax.
