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(Iowa) -- The federal tax law signed into law on July 4th of last year allowing for no tax on tips, overtime, and car loan interest, as well as offering an enhanced deduction for seniors is in effect in Iowa, but the state's W-4 form will look the same for now.
The Iowa Department of Revenue says because Public Law (P.L.) 119-21 was signed after the 2025 Iowa Legislative Session, the 2026 Iowa W-4 form was not able to be modified to allow for new deductions. Iowa will conform to federal provisions on no taxes on tips, overtime, and qualified car loan interest, and as well as creating an enhanced deduction for seniors. As a result, Iowans' 2026 income tax returns may be a little higher than usual, or they amount they owe may be slightly less. The enhanced senior deduction allows those age 65 or older to claim an exemption of up to $6,000.
The Department of Revenue says the state of Iowa has rolling conformity, meaning it will automatically adjust to changes to the Internal Revenue Code, in all cases other than those specified by Iowa law.
More information is available on the Iowa Department of Revenue's website.
