Live in South Dakota, work in Iowa
State income tax on wages · single filer · tax year 2026
Iowa takes
$1,668
on wages earned there
South Dakota takes
$0
after the credit it gives
Both together
$1,668
state tax for the year
Cost of the line
$1,668
a year, above working at home
What crossing the line costs
costs youIowa charges more than South Dakota would, and South Dakota 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 South Dakota 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. South Dakota hands back what you paid Iowa, but only as far as its own bill goes. Anything Iowa charges above that, you keep paying. On this salary the year comes to $1,668. Work at home instead and it would be $0.
- South Dakota is one of 6 states sending this many workers into Iowa, and it sits at number 6 of them, with 5,752 jobs. States used to handling out-of-state workers usually make the filing side of it straightforward.
- Iowa taxes wages earned inside its borders by non-residents, and South Dakota taxes its residents on the same wages wherever they are earned. The resident credit resolves the overlap but does not erase it: South Dakota credits tax paid to Iowa 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 $1,668 against $0 for the same earner working at home — $1,668 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 Iowa changes the split between the two treasuries and not the total.
- Iowa draws commuters of this scale from 6 states, and South Dakota ranks number 6 among them with 5,752 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
- Yours$61,593
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| Yours82.12% | $61,593 |
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 |
|---|---|
| South Dakota charges its residents | $0 |
| Less the credit South Dakota gives | $0 |
| Total state tax | $1,668 |
| If you also worked in South Dakota | $0 |
| Difference | $1,668 |
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 South Dakota 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.
- The figures take the simple case: one job, in Iowa, worked in person. Money from several states makes the credit a proportion instead of a cap. Working remotely from South Dakota can pull you under a different rule entirely, depending on the state.
- 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, South Dakota 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 South Dakota 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, South Dakota 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 South Dakota 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 South Dakota and Iowa?
Not twice over. Both states have a claim — Iowa because you earn the money there, South Dakota because you live there — but South Dakota gives you credit for what Iowa took. The credit stops at what South Dakota 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.
Would moving out of South Dakota lower my state tax if I keep working in Iowa?
Probably not, and this is the part people get wrong. Iowa taxes the wages because that is where you earn them, whoever you are and wherever you sleep. Your home state only ever credits you up to its own bill. So moving somewhere cheaper changes which government keeps the money, not how much leaves your pay. What would change it is the job moving, not you.
Do I have to file tax returns in both South Dakota and Iowa?
Two returns is the normal outcome here, even when only one state ends up taking anything. Iowa generally wants to see a non-resident return from people who work there, and South Dakota wants your whole picture. It is paperwork rather than extra tax.
What if I work from home in South Dakota some days instead of going to Iowa?
Working from home usually moves that day's pay out of Iowa and into South Dakota alone. A handful of states disagree and tax remote days as if you had commuted. This page assumes you actually travel to Iowa, so if a lot of your week is at home the split will differ from what you see here.
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, South Dakota 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.
Does changing residence reduce combined liability while the work state is unchanged?
No, while the source state is unchanged. Iowa'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 Iowa'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. South Dakota 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 South Dakota 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.