Iowa tax return changes for 2026

• Line 5 uses a flat 3.8% rate, and the Tax Calculation Worksheet (41-026) is discontinued.
• The federal Enhanced Deduction for Seniors appears on line 1f. Iowa treats it as a personal exemption, so it is added back for the low-income exemption, alternate tax, tax reduction and health insurance deduction calculations.
• Lump-sum retirement distributions are exempt for recipients who are disabled, 55 or older, or a qualifying surviving spouse or survivor.
• Iowa 529 contributions go on Schedule 1 line 14, up to $5,800 per beneficiary. Qualifying farm tenancy income moves to line 18.
• For 2026, the estimated tax threshold rises from $200 to $1,000.

• IA 148 credits claimed must match the amount awarded or allocated to the cent.
• Franchise taxpayers may elect a combined return with investment subsidiaries on new Form IA 60F.
• New credits: BIG Program investment, Seed Investor and Sustainable Aviation Fuel. The Assistive Device credit is repealed.
• Form 22-010 is the new business income refund request.

Because IA 148 claims must match to the cent, carry the exact allocated figure from the entity’s workpapers rather than a rounded K-1 number. Iowa sales tax is at /us/sales-tax/iowa.