TAXES 21-11, Iowa State Income Tax Withholding
Published: March 1, 2021
Effective: Pay Period 04, 2021
Summary
The income tax withholding formula for the State of Iowa includes the following changes:
- The standard deduction amount for employees claiming zero or one withholding allowances has changed from $1,880 to $2,130.
- The standard deduction amount for employees claiming two or more withholding allowances has changed from $4,630 to $5,240.
- The tax withholding table has changed.
No action on the part of the employee or the personnel office is necessary.
Tax Formula
State Abbreviation: |
IA |
State Tax Withholding State Code: |
19 |
Acceptable Exemption Form: |
IA-W4 |
Basis for Withholding: |
State Allowances |
Acceptable Exemption Data: |
0/Number of Allowances |
TSP Deferred: |
Yes |
Special Coding: |
Determine the Total Number Of Allowances Claimed field as follows:
|
Additional Information: |
In the event an employee does not file a Form IA W4, then zero (0) allowances will be used as the basis for withholding. |
Withholding Formula (Effective Pay Period 04, 2021)
- Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
- Subtract the nontaxable biweekly Federal Employees Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account — health care and dependent care deductions) from the amount computed in step 1.
- Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
- Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
- Multiply the biweekly Federal income tax withholding by the number of pay dates in the tax year 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:
0 or 1 exemption
$2,130
2 or more exemptions
$5,240
- Apply the following table to the taxable income computed in step 6 to determine the Iowa tax withholding:
Tax Withholding Table
If the Amount of Taxable Income Is:
The Amount of Tax Withholding Should Be:
Over $0 but not over $1,676
0.33%
Over $1,676 but not over $3,352
$5.53 plus 0.67% of excess over $1,676
Over $3,352 but not over $6,704
$16.76 plus 2.25% of excess over $3,352
Over $6,704 but not over $15,084
$92.18 plus 4.14% of excess over $6,704
Over $15,084 but not over $25,140
$439.11 plus 5.63% of excess over $15,084
Over $25,140 but not over $33,520
$1,005.26 plus 5.96% of excess over $25,140
Over $33,520 but not over $50,280
$1,504.71 plus 6.25% of excess over $33,520
Over $50,280 but not over $75,420
$2,552.21 plus 7.44% of excess over $50,280
Over $75,420
$4,422.63 plus 8.53% of excess over $75,420
- Determine the exemption allowance by applying the following guideline, and subtract this amount from the results of step 7 to compute the annual Iowa tax withholding:
Multiply the number of allowances by $40
- Divide the annual Iowa tax withholding calculated in step 8 by the number of pay dates in the tax year to obtain the biweekly Iowa tax withholding.
Resources
To view the updated tax formula, go to the page from the drop-down menu on the National Finance Center (NFC) Home page. Select the tab and select from the menu to launch the tax map. Select the desired State from the map provided for the formula.
Inquiries
For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at or via the customer service portal at ServiceNow Portal for Federated Users and at ServiceNow Portal for Non-Federated Users.