![]() ![]() Iowa's corporate tax rates will drop if the state takes in more than $700 million per year in corporate income taxes. ![]() Corporations will see taxes drop to a 5.5% flat rate This portion of the law is expected to reduce state revenues by $9.5 million when fully phased in. To qualify, the business must have operated in Iowa for at least 10 years and the employee must have worked for the company for at least 10 years. The change will be phased in over three years, beginning in 2023. Iowans who receive stock from their employer as part of an employee stock ownership plan will be able to take a one-time exclusion of the sale or exchange of that stock from capital gains taxes. More: Iowa lawmakers have struck a deal on tax cuts. Those farmers can either choose to eliminate the tax on cash rent or crop share agreements for all the years that income is earned, or they can choose a one-time exclusion of net capital gains from the sale of farmland. The bill defines retirement income to include pensions and other retirement plans, including defined benefit and defined contribution plans like 401(k)s, as well as annuities, individual retirement accounts, deferred compensation plans and plans maintained or contributed to by an employer or by a self-employed person.Īlso beginning next year, farmers are eligible for tax breaks if they are 55 or older, have farmed for 10 years and are retired. Starting in 2023, Iowans won't have to pay state taxes on retirement income - a change Reynolds said will affect about 295,000 taxpayers next year. Kim Reynolds signs tax bill at LBS Tax free retirement income Those changes are estimated to reduce Iowa's revenue by $1.7 billion when fully phased in. Reducing the tax rate and making retirement income tax-free make up the largest share of the tax cuts. The law leaves current deductions in place. For many of those, that's because they already don't owe any income tax under current law. Some Iowans won't see any change in their tax liability under the 3.9% rate. 2026: The top rate will lower to 3.9%, applying the same rate to all taxpayers.2025: The top rate will lower to 4.82%, giving a tax cut to those making $6,000 or more.2024: The top rate will lower to 5.7%, giving a tax cut to Iowans making $30,000 or more. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |