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Sales, Use, Withholding, Fuel, Franchise and Income Taxes

  • 5% Penalty for Failure to Timely File a Return:

    • If you do not file your return by the due date and you paid less than 90% of the correct tax, you owe an additional 5% of the unpaid tax.
  • 5% Penalty for Failure to Timely Pay the Tax Due:

    • If you paid less than 90% of the correct tax due by the due date, you owe an additional 5% of the unpaid tax.You may be subject to both of the above penalties. 
  • 5% Penalty for audit or examination deficiency:

    • A penalty of 5% will be added to the unpaid tax if the Department discovers an underpayment during an audit or examination.
  • 75% Penalty for fraud or frivolous tax return filings or willful failure to file a return:

    • A penalty of 75% will be added to the fraudulent claim or unpaid tax for fraudulent claims or willful failure to file a return. This penalty cannot be waived.
  • Waivers:

    Penalties can be waived under limited circumstances, as described in Iowa Code section 421.27. Complete and submit a Penalty Waiver Request form (78-629) or, for eligible tax types, use GovConnectIowa to request a penalty be waived. An exhaustive list of penalty waivers can be found on the Penalty Waiver Request form.

  • $500 Civil Penalty:

    A $500 civil penalty is assessed when a return is considered to be a “frivolous return.” A “frivolous return” is a return that lacks sufficient information to determine the substantial correctness of the amount of tax liability or contains information that indicates the amount of tax shown is substantially incorrect and this conduct is due to a position of law taken that is frivolous or a desire to delay or impede the administration of the tax laws of Iowa.

  • $1,000 Penalty for Failure to File after Demand

    A $1,000 penalty is assessed when a taxpayer continues to fail to file 90 days after the Department issues a demand letter. A separate penalty will be assessed for each unfiled return listed in the demand letter. This penalty is in addition to the failure to file penalties listed above.

  • Late File Penalties Applicable to Specified Businesses

    C corporations, S corporations, financial institutions, and partnerships required to file an Iowa income or franchise tax return with no tax due will be assessed a penalty on the entity’s imputed Iowa liability if they fail to timely file the return. The business’s imputed Iowa liability is equal to its Iowa net income after the application of the Iowa business activity ratio, if applicable, multiplied by the applicable tax rate for the tax year, less any Iowa tax credits available to be claimed by the business. The penalty is equal to the greater of $200 or 5% of the imputed liability, not to exceed $25,000.

    If a business subject to this penalty willfully fails to file a return with no tax due with intent to evade a filing requirement or with the intent to evade reporting of Iowa-source income, the penalty is equal to the greater of $1,500 or 75% of the imputed Iowa liability. This penalty cannot be waived.

  • 5% Penalty for Failure to File and Pay Electronically

    • In addition to the penalties described above, the following two penalties also apply to sales and use and fuel tax:
    • Failure to pay electronically: A penalty of 5% will be added to the tax due if the payment is not received electronically through GovConnectIowa or ACH Credit as required.
    • Failure to use the required method of filing: The tax return information must be reported through GovConnectIowa. If not, a penalty of 5% of the amount of tax due will be added.

This summary is based on Iowa Code section 421.8 and 421.27 and Iowa Administrative Code chapter 701-10.

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Interest Rates

January 1, 2024 through December 31, 2024

  • Yearly: 10.0%
  • Monthly: 0.8%
  • Daily: 0.027322%

Interest Rate Table

For Amended Returns Filed in Calendar Year 2024 Only

If there is additional tax due on the return, interest on the unpaid tax is to be computed using the table below. To find the applicable rate, find the tax year for which you are amending your return in the left hand column. Then go to the right until you reach the column for the month in 2024 in which the amended return is filed.


History of Interest Rates for the Iowa Department of Revenue

YearRate Per MonthRate Per Year
20240.8% per month10.0% per year
20230.5% per month6.0% per year
20220.4% per month5.0% per year
20210.5% per month6.0% per year
20200.6% per month7.0% per year
20190.6% per month7.0% per year
20180.5% per month6.0% per year
20170.4% per month5.0% per year
20160.4% per month5.0% per year
20150.4% per month5.0% per year
20140.4% per month5.0% per year
20130.4% per month5.0% per year
20120.4% per month5.0% per year
20110.4% per month5.0% per year
20100.4% per month5.0% per year
20090.7% per month8.0% per year
20080.8% per month10.0% per year
20070.8% per month10.0% per year
20060.7% per month8.0% per year
20050.5% per month6.0% per year
20040.5% per month6.0% per year
20030.6% per month7.0% per year
20020.8% per month10.0% per year
20010.9% per month11.0% per year
20000.8% per month10.0% per year
19990.8% per month10.0% per year
19980.8% per month10.0% per year
19970.8% per month10.0% per year
19960.9% per month11.0% per year
19950.8% per month9.0% per year
19940.7% per month8.0% per year
19930.8% per month9.0% per year
19920.9% per month11.0% per year
19911.0% per month12.0% per year
19900.9% per month11.0% per year
19890.8% per month9.0% per year
19880.7% per month8.0% per year
19870.8% per month9.0% per year
19860.8% per month9.0% per year
19850.8% per month10.0% per year
1984 9.0% per year
1983 14.0% per year
1982 17.0% per year
Prior to 1982 8.0% per year
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