Iowa Payroll Instructions

Iowa has state income tax withholding that uses a standard deduction, plus a credit amount for each exemption. It uses a 'step' table that is similar to the federal payroll tax tables.

The Iowa state withholding tax formulas changed in 2023, with a big increase in the standard deduction, and much flatter tax rates (sucks to be poor). There now is only one table instead of four, but it was easier to just duplicate it rather than redo the setup. Federal taxes are no longer deducted, so the "based on" value is now Gross Wages. Iowa tables have changed 10 times in the past 33 years. This is the biggest.

NOTE-- Starting in 2006, we are using annualized tables rather than weekly ones, since they are easier to match up to the info available on the Iowa state website. Goldenseal will automatically convert the tax tables to whatever payroll period you use.

Iowa State Withholding Instructions

To enter withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Open the Payroll tab on the left, and choose Employees.
  2. Locate the employee's record.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field (see note below).
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter the number of Iowa dependents into the State Exemptions field.
  7. Enter a Iowa Tax Package into the Tax Package field, based on the employee’s W4 form. Choose Old W4 for pre-2020 forms. Choose New W4 Step2- if they did not check the box in step 2 of the new form. Choose Step2+ if they did check it. HINT: If you don't see Iowa packages in the list, you'll need to import 2022 tax info first.
  8. Click OK.

Iowa State Unemployment Tax Instructions

In 2022, Iowa state unemployment cost applies to the first $36,100 of each employee's wages, a moderate increase from last year. For new employers, the starting rate depend on the business type, ands the current state of the UI reserve. Construction companies start at 7.5%, while most others start at 1.0%. In later years the tax rate is different for each company, depending on their experience rating.

To enter your Iowa SUTA tax rate into Goldenseal payroll software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items.
  2. You'll see a list of Tax Items. Open Iowa SUTA in the list, and double-click on it. HINT: If you don't see Iowa SUTA in the list, you'll need to import your state's payroll info first.
  3. Enter the percentage rate that you pay into the percentage field to the right of Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment.

Iowa Marital Status

Enter one of the following for each employee:

State Tax Contacts

Website

Little Known Iowa Tax Fact

During presidential election years, Iowa residents may claim 1 (one) candidate as a dependent. The deduction is valid only if said candidate supports the ethanol mandate, and consumes at least 14.5 pounds of butter during his or her stay (State Law #IA-4335a).

Official State Lawn Ornament

Riding mower.