Live in Iowa, work in Minnesota
State income tax on wages · single filer · tax year 2026
Minnesota takes
$2,557
on wages earned there
Iowa takes
$0
after the credit it gives
Both together
$2,557
state tax for the year
Cost of the line
$888
a year, above working at home
What crossing the line costs
costs youMinnesota charges more than Iowa would, and Iowa only credits you up to its own bill — so the difference stays with you. Solid is what you actually pay; the faded part of the Iowa bar is the credit it hands back. State income tax only — federal and payroll tax apply on top, and a city wage tax may too.
Which state taxes you, and what it costs
- You are not taxed twice over. You are taxed at the higher of the two rates, which is its own kind of bad news. Iowa hands back what you paid Minnesota, but only as far as its own bill goes. Anything Minnesota charges above that, you keep paying. On this salary the year comes to $2,557. Work at home instead and it would be $1,668.
- 8,362 jobs is the size of this crossing from Iowa into Minnesota. Smaller than the famous ones, and governed identically. The only practical difference is familiarity — fewer people at your workplace will have done this before.
- Minnesota taxes wages earned inside its borders by non-residents, and Iowa taxes its residents on the same wages wherever they are earned. The resident credit resolves the overlap but does not erase it: Iowa credits tax paid to Minnesota only up to what it would itself have charged on that income, so the commuter settles at the higher of the two liabilities rather than the sum. At the reference salary that is $2,557 against $1,668 for the same earner working at home — $888 attributable to the state line itself. ⚠️ The corollary is the part most readers have backwards: moving to a cheaper home state while keeping the job in Minnesota changes the split between the two treasuries and not the total.
- This is a smaller corridor by national standards — 8,362 jobs in Minnesota held by Iowa residents — but the rules that govern it are the same rules that govern the largest ones. Corridor size changes how familiar an employer's payroll department is with the paperwork, never the tax treatment.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$2,238
- Yours$59,354
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax2.98% | $2,238 |
| Yours79.14% | $59,354 |
Which rung you are on
A $75,000 salary
| This rung starts at | $66,500 |
|---|---|
| Next rung starts at | $121,800 |
| Room before it | $46,800 |
Federal only, measured on gross pay — so the first rung is what the standard deduction covers.
The arithmetic, step by step
| Minnesota takes, on wages earned there | $2,557 |
|---|---|
| Iowa charges its residents | $1,668 |
| Less the credit Iowa gives | $1,668 |
| Total state tax | $2,557 |
| If you also worked in Iowa | $1,668 |
| Difference | $888 |
On a reference salary of $60,000 a year, single filer. Both states run progressive schedules, so the figures do not simply scale — use the tool above for your own salary.
What this page does not cover
- City wage taxes are not in these numbers. A few places charge them, and where they do the money is real. If your job in Minnesota is inside a city that taxes workers, add that on top. Where it is not, the state figures above are the whole of it for Iowa residents.
- Two assumptions sit under this page. First, that Minnesota is where all your pay comes from. Second, that you go there rather than working from your kitchen in Iowa. Mixed income changes how the credit is worked out, and remote days have their own rules in some states.
- Every dollar figure here uses a salary of sixty thousand a year. It is a stated benchmark, not a guess at what people on this route earn. Scale them to your own pay. Which state ends up dearer, Iowa or Minnesota, generally holds at other salaries — though the gap between them can widen or narrow as you cross tax brackets.
- These figures cover the STATE layer only. City and municipal wage taxes sit on top of them and are not included: a commuter into Philadelphia pays its wage tax on top of anything here, and Ohio's municipalities run their own credit system, which this site models in its own families. New York City, by contrast, taxes only its residents, so a commuter into it adds nothing at the city level. Whether Minnesota or Iowa carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in Minnesota and that there is no other income. That matters for the credit: where income comes from several states, Iowa limits the credit to the share of its own tax attributable to the Minnesota portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in Minnesota rather than remotely — several states tax a non-resident's remote days as though they were worked at the employer's location, which reverses the usual expectation and is handled on this site's reciprocity pages.
- Dollar amounts are computed at a stated reference salary of sixty thousand rather than a corridor wage average, which no published source provides per state pair. Because both states' liabilities and the credit between them are functions of the same income, the direction of the Iowa to Minnesota comparison holds at other salaries even though the amounts do not — with one qualification worth stating, that a progressive schedule can change the SIZE of the gap at higher incomes, and in Minnesota's case a bracket crossed on one side and not the other is exactly where that happens.
Questions people ask
Do I pay state tax twice, to Iowa and Minnesota?
Not twice over. Both states have a claim — Minnesota because you earn the money there, Iowa because you live there — but Iowa gives you credit for what Minnesota took. The credit stops at what Iowa would have charged on its own, so what you actually pay is the bigger of the two bills. Here that comes to $2,557 for the year.
Would moving out of Iowa lower my state tax if I keep working in Minnesota?
Moving rarely helps while the job stays in Minnesota. The work state takes its share first and does not care where you live. A cheaper home state simply means it has less of its own tax to credit, and you still pay Minnesota the same. The saving people imagine here mostly is not there.
Do I have to file tax returns in both Iowa and Minnesota?
Usually yes, and it catches people out. Iowa wants a return because you live there. Minnesota usually wants one too, because you earned money inside it — even in the cases where you end up owing it nothing. Filing in a state and paying it are separate things, and the return is often what proves you do not owe.
What if I work from home in Iowa some days instead of going to Minnesota?
It depends on the state, and the answer is not the one most people expect. You might assume a day worked at your kitchen table in Iowa is taxed by Iowa. Usually that is right, and your Minnesota share shrinks to the days you were actually there. But a few states tax days you work at home as though you had been in the office, unless your employer required you to be elsewhere. It is worth checking which kind Minnesota is before assuming.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — Minnesota on a source basis, Iowa on residence. The residence state grants a credit for tax paid to the source state, limited to the residence state's own liability on that income. Net combined liability therefore equals the greater of the two liabilities rather than their sum, $2,557 at the reference salary, and the split between the two treasuries is the only thing the credit changes.
Does changing residence reduce combined liability while the work state is unchanged?
No, while the source state is unchanged. Minnesota's claim arises from where the services are performed and is unaffected by residence. Because the residence credit is capped at the residence state's own liability, combined liability equals the greater of the two — so substituting a lower-tax residence reduces the residence-state component toward zero while leaving the total at Minnesota's level. The binding variable is the work location, not the home one.
What filing obligations arise in each state on this corridor?
Generally two. Iowa requires a resident return reporting all income; Minnesota requires a non-resident return reporting the income sourced to it, which is also the mechanism by which the resident credit is substantiated. ⚠️ A filing obligation is distinct from a liability: a reciprocity exemption or a zero net position removes tax without necessarily removing the return, and the non-resident return is frequently what establishes the credit claimed on the resident one.
How do remote working days affect sourcing between these two states?
Ordinarily wages are sourced to where the services are performed, so days worked remotely from Iowa fall outside Minnesota's jurisdiction and the source-state apportionment shrinks accordingly. ⛔ The exception is the "convenience of the employer" rule, which several states apply: a non-resident's remote days are sourced to the employer's location unless the remote work is required by the employer rather than chosen by the employee. The figures on this page model in-person attendance in Minnesota throughout.