Iowa Earned Income Tax Credit
Last updated August 2026
Iowa offers an Earned Income Tax Credit, or EITC, that puts money back in your pocket. The Iowa credit equals 15 percent of your federal earned income credit. This rate has applied for tax years beginning on or after January 1, 2014. So you take your federal credit and figure 15 percent of it for Iowa.
The best part is that it is refundable. Any credit larger than the tax you owe is paid back to you. So even if you owe no Iowa tax at all, the credit can come to you as cash. That makes it real money for working families, not just a tax break.
You must qualify for the federal credit first. The Iowa credit is tied to the federal EITC under Section 32 of the Internal Revenue Code. If you qualify for the federal EITC, you can then claim the Iowa share. If you do not qualify federally, there is no Iowa credit to claim.
Claiming it is straightforward. You claim the credit on your Iowa individual income tax return, the IA 1040. You apply 15 percent to your federal EITC amount. If you file a federal return that claims the EITC, do not skip the Iowa step, because the state credit is separate money.
The credit rests on state law. It is set by Iowa Code section 422.12B. That law set the rate at 14 percent for 2013 and 15 percent after that. The current 15 percent rate is the one you use today.
There is a rule for people who moved during the year. Part-year and nonresident taxpayers may claim only the portion of the credit that is fairly and equitably allocable to Iowa. If you lived in Iowa for only part of the year, you claim only the Iowa share. When in doubt, a free tax help site can walk you through it.
Updated August 2026 Program details can change — confirm with the program directly.
Who qualifies
- You generally must qualify for the federal Earned Income Tax Credit and file an Iowa income tax return
- The credit equals 15 percent of your federal EITC, and any amount above the tax you owe is refunded to you
You may qualify. The program makes the final decision.
How to apply
- 1
First, qualify for and claim the federal Earned Income Tax Credit.
- 2
File your Iowa individual income tax return, the IA 1040.
- 3
Figure 15 percent of your federal EITC amount for the Iowa credit.
- 4
If you moved during the year, claim only the share allocable to Iowa.
- 5
File on time so any refundable amount is paid back to you.
What to have ready
- Your federal tax return showing your federal EITC amount
- Income documents, such as W-2s and 1099s
- Social Security numbers for you and your children. The Iowa Department of Revenue confirms the exact list.
What the application looks like
Common questions
How much is the Iowa EITC?
It equals 15 percent of your federal earned income credit. This rate has applied for tax years beginning on or after January 1, 2014.
Is the Iowa EITC refundable?
Yes. Any credit larger than the tax you owe is paid back to you, even if you owe no Iowa tax.
Do I have to qualify for the federal credit first?
Yes. The Iowa credit is tied to the federal EITC under Section 32 of the Internal Revenue Code, so you must qualify federally first.
How do I claim it?
Claim it on your Iowa individual income tax return, the IA 1040, by applying 15 percent to your federal EITC amount.
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