Des Moines, Iowa – December 13, 2024 – The Iowa Department of Revenue is issuing updated income tax withholding formulas and tables for 2025. The Department updates withholding formulas and tables when necessary to account for inflation and for changes in individual income tax liability resulting from changes in Iowa law.
New for 2025 – The Iowa withholding formula and the IA W-4 have been revised for tax year 2025 to accommodate changes to individual income tax required under Iowa Senate File 2442. Enacted in May, 2024, this law establishes a 3.80 percent flat tax rate on Iowa individual income beginning January 1, 2025.
Because of changes reflected on the 2025 IA W-4 form, employees should be encouraged to file an updated Iowa W-4 using the 2025 IA W-4 (44-019). However, employers may continue to compute withholding based on the information from the employee's most recently furnished IA W-4. To do so, employers must make certain additional calculations for those employees whose IA W-4 on file dates to 2023 or earlier.
Employers can view the Iowa 2025 withholding formulas and tables online.
The Department has updated the online Withholding Estimator to help individuals calculate their 2025 withholding amounts. As a reminder, employers must update withholding amounts starting January 1, 2025 but employees can also make changes to their Iowa W-4 (withholding) form by contacting their employer.
Employers with questions can contact the Department at 515-281-3114 or 800-367-3388.