The 2026 corporate income tax rates will remain the same as corporate income tax rates for tax years beginning in 2024 and 2025.
The Iowa Department of Revenue issued an Order 2025-02 on 21 October 2025 regarding corporate income tax rates for the 2026 tax year. The Iowa corporate income tax rates for tax years beginning in 2026 will remain the same as for tax years beginning in 2025.
The Iowa corporate income tax rates for tax years beginning on or after 1 January 2026 are as follows:
- USD 0 to 25,000 – 5.5%
- USD 25,001 to 100,000 – 5.5%
- USD 100,001 to 250,000 – 7.1%
- over USD 250,000 – 7.1%
The rates described above are correctly computed as required by the Iowa Code section and shall apply for tax years beginning on or after 1 January 2024, including tax years beginning in 2026.
This decision ties back to a mechanism introduced in 2022, which allows for potential reductions in corporate income tax rates. The mechanism is triggered if net corporate income tax receipts surpass USD 700 million in the fiscal year immediately preceding the tax year.
Those rates will then apply to tax years beginning on or after 1 January of the following year. This process will continue until the corporate income tax rate is 5.5% for all corporate taxable income. All rates as determined by the Department of Revenue must be rounded down to the nearest 1/10th of 1%.
On 3 October 2025, the Department of Management determined that the net corporate income tax receipts for fiscal year 2025 were USD 621,182,688.30. The statutory threshold for recalculating the corporate income tax rates has not been met.
