DES MOINES — The Iowa Department of Revenue (IDR) has finalized the 2020 interest rate, individual income tax brackets and individual income tax standard deduction amounts for the 2020 tax year (applicable for taxes due in 2021).
Starting Jan. 1, 2020, the interest rate for taxpayers with overdue payments will be:
* 7.0 percent annually
* 0.6 percent monthly
* 0.019126 percent daily
Individual Income Tax
The tax year 2020 individual income tax standard deductions are:
* $2,110 for single taxpayers
* $2,110 for married taxpayers filing separately
* $5,210 for married filing jointly
Individual Income Tax Brackets for tax year 2020 are shown in the table at right.
Indexation of the standard deductions is covered in Iowa Code sections 422.9 and 422.21. Iowa Code section 422.5 details indexation of Iowa income tax brackets.
Iowa law provides for the indexation of individual income tax brackets and standard deduction amounts. These tax features are determined each year by applying inflation factors to, or “indexing” the previous year’s amounts. Indexation is meant to protect taxpayers from paying higher income taxes solely as a result of inflation.