IDR Announces 2023 Interest Rates, Deductions, Income Tax Brackets

Monday - 11/21/2022

Des Moines, Iowa – The Iowa Department of Revenue announces individual income tax brackets and individual income tax standard deduction amounts for the 2023 tax year (applicable for taxes due in 2024) and the 2023 interest rate, which the agency charges for overdue payments.

Interest Rates

Starting January 1, 2023, the interest rate for taxpayers with overdue payments will be:

  • 6.0% annually
  • 0.5% monthly
  • 0.016438% daily

Iowa Code Section 421.7 specifies the procedures for calculating the Department’s annual and monthly interest rates. The annual rate is based on the average monthly prime rate during the preceding twelve month period, October through September. Iowa law requires that this average be rounded to the nearest whole percent and two percentage points to be added to it. The prime rate averaged 3.96 percent over the past twelve months. Rounded to the nearest whole percent, this average is 4.0 percent. Adding two percentage points results in the annual rate of 6.0 percent. The monthly rate is the annual rate divided by 12, rounded to the nearest one-tenth of a percentage point. The daily rate for 2023 is the annual rate divided by 365.

Individual Income Tax Brackets

Tax year 2023 income tax brackets are shown in the table below.

For married taxpayers filing jointly:

Taxable Income


Over   But Not Over       Tax Rate   Of Excess Over
$0   $12,000 $0.00  +  (4.40%  x  $0)
$12,000   $60,000 $528.00 + (4.82% x $12,000)
$60,000 $150,000 $2,841.60 + (5.70% x $60,000)
$150,000 ------ $7,971.60 + (6.00% x $150,000)

For all taxpayers other than married taxpayers filing jointly:

Taxable Income


Over   But Not Over       Tax Rate   Of Excess Over
$0   $6,000 $0.00  +  (4.40%  x  $0)
$6,000 $30,000 $264.00 + (4.82% x $6,000)
$30,000 $75,000 $1,420.80 + (5.70% x $30,000)
$75,000 ------ $3,985.80 + (6.00% x $75,000)

Iowa law provides for a revised set of individual income tax brackets effective with Tax Year 2023. Under these changes, Iowa provides two sets brackets. One set of brackets applies to married taxpayers filing jointly and the other set of brackets is for all other taxpayers. For each of these two groups, there are four tax brackets in tax year 2023. Iowa Code also eliminates the standard deduction effective with Tax Year 2023.

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