Bill
Bill > HF496
IA HF496
IA HF496A bill for an act modifying the individual and alternate income tax rates, and including applicability provisions.
summary
Introduced
02/20/2025
02/20/2025
In Committee
02/20/2025
02/20/2025
Crossed Over
Passed
Dead
Introduced Session
91st General Assembly
Bill Summary
This bill decreases the individual income tax rate on taxable income from 3.8 percent to 2.5 percent, and correspondingly reduces the alternate income tax rate from 4.3 percent to 3.0 percent. The bill applies to tax years beginning on or after January 1, 2026.
AI Summary
This bill modifies Iowa's individual income tax rates by reducing the standard income tax rate from 3.8% to 2.5% and lowering the alternate income tax rate from 4.3% to 3.0%. The alternate income tax rate applies in specific scenarios: for married couples filing jointly, heads of household, or surviving spouses with net income exceeding certain thresholds ($13,500 and $32,000 respectively). When these income thresholds are exceeded, taxpayers can calculate their tax using the alternate rate, which is now set at 3%, compared to the previous 4.3%. The bill includes an applicability provision specifying that these new tax rates will take effect for tax years beginning on or after January 1, 2026. This change represents a significant reduction in income tax rates for Iowa residents, potentially providing tax relief for individuals across different filing statuses and income levels.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Introduced, referred to Ways and Means. H.J. 374. (on 02/20/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF496 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/HF496.html |
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