Withholding Tax

This tax guidance describes what retirement income is eligible for the exclusion, who is eligible for the exclusion, and the withholding requirements for Iowa purposes on retirement income. Additionally, on February 20, 2023, Governor Kim Reynolds signed Senate File 181. The guidance was updated to address withholding requirements for distributions of retirement income for tax years beginning on or after January 1, 2023.

Guidance regarding who must act as an Iowa Withholding Agent? plus additional details regarding employee exemption, what income is subject to withholding, taxable compensation, reporting/paying withholding tax, failure to withhold, and penalty/interest.