Live in Minnesota, work in Iowa
State income tax on wages · single filer · tax year 2026
Iowa takes
$1,668
on wages earned there
Minnesota takes
$888
after the credit it gives
Both together
$2,557
state tax for the year
Cost of the line
$0
a year, above working at home
What crossing the line costs
credit covers itMinnesota charges more, so its credit covers everything Iowa takes. Both states collect; your total does not change. Solid is what you actually pay; the faded part of the Minnesota 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
- Crossing into Iowa for work does not raise your state tax at all. Minnesota asks for more than Iowa does, so the credit it gives you absorbs the whole Iowa bill. You end the year at $2,557 either way. The one thing the commute does cost you is a second tax return.
- Minnesota is one of 6 states sending this many workers into Iowa, and it sits at number 3 of them, with 8,114 jobs. States used to handling out-of-state workers usually make the filing side of it straightforward.
- Both states tax these wages and the commuter pays no more than they would have at home. Iowa takes its non-resident share first — $1,668 at the reference salary — and Minnesota, whose own liability on the same income is the larger of the two, credits that amount in full and collects the balance. The total is $2,557, identical to what an earner living and working in Minnesota would owe. ⚠️ The money is split between two treasuries rather than reduced, which matters at filing time: two state returns, not one.
- Iowa draws commuters of this scale from 6 states, and Minnesota ranks number 3 among them with 8,114 jobs. A work state pulling from that many directions tends to have a well-established non-resident filing routine, which is a practical convenience rather than a tax saving.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$3,577
- Yours$58,016
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax4.77% | $3,577 |
| Yours77.35% | $58,016 |
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
| Iowa takes, on wages earned there | $1,668 |
|---|---|
| Minnesota charges its residents | $2,557 |
| Less the credit Minnesota gives | $1,668 |
| Total state tax | $2,557 |
| If you also worked in Minnesota | $2,557 |
| 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
- What you see here is state tax between Minnesota and Iowa. Cities can charge their own tax on top, and a handful do. That layer is not modeled on this page, so treat these figures as the floor rather than the final bill.
- Two assumptions sit under this page. First, that Iowa is where all your pay comes from. Second, that you go there rather than working from your kitchen in Minnesota. 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, Minnesota or Iowa, 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 Iowa or Minnesota carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in Iowa and that there is no other income. That matters for the credit: where income comes from several states, Minnesota limits the credit to the share of its own tax attributable to the Iowa portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in Iowa 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 Minnesota to Iowa 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 Iowa'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 Minnesota and Iowa?
You file in both states, but you do not pay the full amount to both. Minnesota credits the tax Iowa collected, capped at its own charge on that income. The practical result is one bill at the higher of the two levels: $2,557 for the year.
Does working in Iowa cost me anything extra?
Nothing extra, on this route. You end the year owing $2,557, exactly what you would owe if the job were in Minnesota. That is not true of every crossing — plenty of them do cost money — but this one does not. What it does cost you is time at tax filing, because two states may each want a return.
Do I have to file tax returns in both Minnesota and Iowa?
Usually yes, and it catches people out. Minnesota wants a return because you live there. Iowa 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 Minnesota some days instead of going to Iowa?
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 Minnesota is taxed by Minnesota. Usually that is right, and your Iowa 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 Iowa 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 — Iowa on a source basis, Minnesota 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.
Why is the marginal state-tax cost of this crossing zero?
Marginal cost is zero because the binding liability is the residence state's. Minnesota's own charge on this income equals or exceeds Iowa's, so the resident credit absorbs the source-state tax entirely and combined liability equals residence-only liability, $2,557. ⚠️ Zero marginal tax is not zero obligation: a non-resident return may still be required in Iowa.
What filing obligations arise in each state on this corridor?
Generally two. Minnesota requires a resident return reporting all income; Iowa 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 Minnesota fall outside Iowa'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 Iowa throughout.