The Grassley Bulletin: More money in your pocket

Great news! This week, Governor Reynolds signed Senate File 2442 into law, cutting income taxes for all Iowans.

Let's Back Up

Before this legislation, Iowa was on a path to phase its income tax rate to a flat rate of 3.9 percent by 2026. That tax cut was passed by the Legislature in 2022. Because Iowa's economy has remained strong and exceeded expectations, our state is in a position to speed up that tax cut and go even further.

Helping Iowans Through Bidenomics

When we entered session, Iowa House Republicans had the goal of delivering as much relief as possible to help Iowans facing the consequences of Bidenomics. We want more money back into your pockets. But we know we need to do it responsibly so that we can continue to fund Iowans' priorities in the state budget.

What We Passed

Senate File 2442 lowers Iowa’s income tax rate to a flat 3.8 percent beginning in 2025. This represents an income tax cut for all taxpaying Iowans. Since this is a tax cut plan endorsed by Iowa House Republicans, you know it is responsible and that the state has the money to pay for it.

This plan splits payments between the ending balance and the Taxpayer Relief Fund, so we can get that money back into the hands of Iowans where it belongs. Even with this cut, the state is projected to have over $2 billion in the Taxpayer Relief Fund in 2029.

This tax cut package also contained other policies after hearing from Iowans, including:

- Redoes the tax growth tables from last session’s property tax relief bill to help low-growth counties realize more of their growth.

- Saves taxpayers money on property taxes by allowing counties to eliminate county compensation boards, which review salaries for elected county officials and recommend increases. This means raises for these elected officials will no longer be on autopilot but will be based on merit.

- Eliminates an outdated law requiring Lee County to have two courthouses, saving Lee County taxpayers additional money.