Tax rate used in calculating Iowa state tax for year 2021
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State Abbreviation:
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IA
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State Tax Withholding
State Code:
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19
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Acceptable Exemption
Form:
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IA-W4 or W-4
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Basis For Withholding:
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State Exemptions
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Acceptable Exemption
Data:
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0 / Number of Allowances
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TSP Deferred:
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Yes
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Special Coding:
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Determine the Total Number
Of Allowances Claimed field as follows:
First
Position - Enter 0 (zero).
Second
and Third Positions - Enter the number of allowances claimed.
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Additional Information:
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None
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Withholding Formula (Iowa Effective 2021)
- Subtract the biweekly Thrift Savings Plan contribution from the gross biweekly wages.
- Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes flexible spending account - health care and dependent care deductions) from the amount computed in step 1.
- Add the taxable biweekly fringe benefits (taxable life insurance, etc.) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
- Multiply the adjusted gross biweekly wages times 26 to obtain the gross annual wages.
- Multiply the biweekly Federal income tax withholding by 26 to obtain the annual Federal income tax withholding and subtract this amount from the gross annual wages computed in step 4.
- Determine the standard deduction by applying the following guideline and subtract this amount from the result of step 5 to compute the taxable income.
If the Number of
Allowances Claimed Is: |
The Standard
Deduction Is: |
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0 or 1
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$ 2,130
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2 or more
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5,240
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- Apply the taxable income computed in step 6 to the following table to determine the Iowa tax withholding.
Tax Withholding Table |
If the Amount of
Taxable Income Is: |
The Amount of Iowa
Tax Withholding Should Be: |
Over:
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But Not
Over: |
|
|
|
Of Excess
Over: |
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$ 0
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$ 1,676
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$ 0.00
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plus
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0.33%
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$ 0
|
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1,676
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3,352
|
5.53
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plus
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0.67%
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1,676
|
|
3,352
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6,704
|
16.76
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plus
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2.25%
|
3,352
|
|
6,704
|
15,084
|
92.18
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plus
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4.14%
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6,704
|
|
15,084
|
25,104
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439.11
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plus
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5.63%
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15,084
|
|
25,104
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33,520
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1,005.26
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plus
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5.96%
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25,104
|
|
33,520
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50,280
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1,504.71
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plus
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6.25%
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33,520
|
|
50,280
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75,420
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2,552.21
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plus
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7.44%
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50,280
|
|
75,420
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and over
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4,422.63
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plus
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8.53%
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75,420
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- Determine the exemption allowance by applying the following guideline and subtract this amount from the result of step 7 to compute the annual Iowa tax withholding.
Exemption Allowance = $40 x Number of Exemptions
- Divide the annual Iowa tax withholding by 26 and round to the nearest dollar to obtain the biweekly Iowa tax withholding.
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in house payroll tax solution for Iowa small businesses here.
How to Calculate Iowa State Income Tax Withholdings Automatically
How to Create After the Fact Paychecks and Generate the Paystubs