Iowa State Income Tax Withholding
Reference Number: NFC-23-1683113919
Published: April 12, 2023
Effective: Pay Period 04, 2023
Summary
The income tax withholding formula for the State of Iowa includes the following changes:
- The Federal withholding is no longer deducted from the Iowa taxable wages.
- The standard deduction amount for employees claiming zero or one withholding allowance has changed from $2,210 to $13,850.
- The standard deduction amount for employees claiming two or more withholding allowances has changed from $5,450 to $27,700.
- 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 W-4 |
|
Basis for Withholding: |
State Allowances |
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Acceptable Exemption Data: |
0/Number of Allowances |
|
TSP Deferred: |
Yes |
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Special Coding: |
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. |
|
Additional Information: |
In the event an employee does not file a Form IA W-4, then zero (0) allowances will be used as the basis for withholding. |
Withholding Formula (Effective Pay Period 04, 2023)
- 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 | $13,850 |
| 2 or more exemptions | $27,700 |
- 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 $4,800 | 4.40% |
| Over $4,800 but not over $24,000 | $211.20 plus 4.82% of excess over $4,800 |
| Over $24,000 but not over $50,000 | $1,136.64 plus 5.70% of excess over $24,000 |
| Over $50,000 | $2,618.64 plus 6.00% of excess over $50,000 |
- 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 HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications 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 1-855-NFC-4GOV (1-855-632-4468) or via the customer service portal at ServiceNow Portal for Federated Users and at ServiceNow Portal for Non-Federated Users.