Governor announces tax relief agreement - KWWL - Eastern Iowa Breaking News, Weather, Closings

Governor announces tax relief agreement

Posted: Updated:

Gov. Kim Reynolds and Iowa House and Senate leadership announced an agreement on the largest tax relief and reform package in state history.

Here's what the reform package does:

  • Prioritizes Iowa’s hardworking, middle class families
  • Reduces rates and eliminates federal deductibility, making Iowa’s tax code more competitive and transparent
  • Dramatically simplifies Iowa’s overly complicated tax code
  • Ensures fairness for Main Street businesses in the modern economy
  • Protects budget sustainability in future years

According to the release,  Iowa families and small business owners will receive $398 million in income tax relief in 2019.

The tax plan  provides an average tax reduction of nearly 10% and continues to provide tax relief beyond 2019.

When fully implemented as soon as 2023, the plan will reduce the number of individual income brackets to four, with a top rate of 6.5%. The top corporate rate will be lowered to 9.8%.

At full implementation, here's what will be implemented:

  • A single taxpayer with no children making $25,000 will see a 22.3% tax reduction
  • A single taxpayer with one child making $48,000 will see a 25.8% tax reduction
  • A couple with two children making $75,000 will see a 25.7% tax reduction

The tax plan ensures full repayment of the Cash Reserve Fund this year and does not reduce the property tax backfill.

Powered by Frankly