Live in Iowa, work in South Dakota
State income tax on wages · single filer · tax year 2026
South Dakota takes
$0
on wages earned there
Iowa takes
$1,668
after the credit it gives
Both together
$1,668
state tax for the year
Cost of the line
$0
a year, above working at home
What crossing the line costs
no work-state taxSouth Dakota has no income tax, so only Iowa taxes this pay. 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
- People move jobs to South Dakota expecting the tax to disappear. It does not, not while you live in Iowa. Your home state taxes what you earn anywhere, and South Dakota charging nothing simply means there is nothing to set against it. The year comes to $1,668, all of it to Iowa.
- More people make this crossing than any other into South Dakota. About 8,036 jobs there are held by people living in Iowa — the biggest of the 3 routes of this size into the state. Whatever this page says about the tax, it is describing a very well-worn road.
- South Dakota levies no individual income tax, so a commuter into it is taxed by Iowa alone, on the whole of the wages, at $1,668 for the reference salary. ⛔ The common expectation — that working in a state without an income tax removes the tax — is exactly backwards for a commuter: residence is what gives Iowa its claim, and that claim reaches income wherever it is earned. There is no work-state liability to credit against it, so nothing offsets the Iowa bill. The only version of this that changes the answer is moving.
- Measured against every other state sending commuters into South Dakota, this is the largest single flow: 8,036 jobs held by Iowa residents, ahead of all 3 corridors of this size into that state. Census LODES counts jobs rather than people, so a worker holding two positions in South Dakota appears twice.
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
| South Dakota takes, on wages earned there | $0 |
|---|---|
| Iowa charges its residents | $1,668 |
| Less the credit Iowa gives | $0 |
| Total state tax | $1,668 |
| If you also worked in Iowa | $1,668 |
| Difference | $0 |
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
- One thing this page leaves out: city taxes. Some cities charge their own tax on people who work there, and it sits on top of everything above. Philadelphia is the well-known one. New York City only charges its own residents, so commuting in adds nothing. Check whether the city you work in is one that charges, because the South Dakota state figure is not the whole story if it does.
- The figures take the simple case: one job, in South Dakota, worked in person. Money from several states makes the credit a proportion instead of a cap. Working remotely from Iowa can pull you under a different rule entirely, depending on the state.
- The dollars rest on one assumed salary of sixty thousand. Double your pay and they do not simply double, because both states charge more on higher slices of income. What tends to stay put is which side of the Iowa and South Dakota comparison you are on.
- 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 South Dakota or Iowa carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in South Dakota 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 South Dakota portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in South Dakota 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 South Dakota 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 South Dakota'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 South Dakota?
Not twice over. Both states have a claim — South Dakota because you earn the money there, Iowa because you live there — but Iowa gives you credit for what South Dakota 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 $1,668 for the year.
Does working in South Dakota cost me anything extra?
It costs you nothing in tax. $1,668 is what you owe whether you work in South Dakota or at home in Iowa. The only real cost of the crossing is the extra return.
Do I have to file tax returns in both Iowa and South Dakota?
Expect two. Living in Iowa means filing there on everything you earn. Working in South Dakota usually means filing there as well, on the part you earned inside it. The second one is often how the credit gets claimed, so skipping it can cost you money you are owed.
What if I work from home in Iowa some days instead of going to South Dakota?
Normally, days worked at home in Iowa belong to Iowa, and only the days you spend in South Dakota are taxed there. That is the ordinary rule. The exception is real though: some states count your remote days as worked at the employer's location anyway. That flips the answer completely, so check South Dakota's rule rather than assuming.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — South Dakota 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, $1,668 at the reference salary, and the split between the two treasuries is the only thing the credit changes.
Why is the marginal state-tax cost of this crossing zero?
Marginal cost is zero because the binding liability is the residence state's. Iowa's own charge on this income equals or exceeds South Dakota's, so the resident credit absorbs the source-state tax entirely and combined liability equals residence-only liability, $1,668. ⚠️ Zero marginal tax is not zero obligation: a non-resident return may still be required in South Dakota.
What filing obligations arise in each state on this corridor?
Generally two. Iowa requires a resident return reporting all income; South Dakota 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 South Dakota'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 South Dakota throughout.