Does Iowa Have an Inheritance Tax? (2026)

Deaths before 2025: the Iowa inheritance tax and the IA 706

Iowa's inheritance tax is gone for 2025 and later deaths, but the Department of Revenue still processes returns, supplemental and amended returns, and lien releases for earlier ones. These are the rules that apply when the person died in 2024 or before.

• The four-year phase-down. Senate File 619 cut every inheritance tax rate by 20% for deaths in 2021, 40% for deaths in 2022, 60% for 2023 and 80% for 2024. The new Iowa Code §450.98 says the chapter does not apply to estates of people who died on or after January 1, 2025. (source)
• Rates by year of death. Before 2021, Rate B (siblings, half-siblings, sons- and daughters-in-law) ran from 5% to 10% and Rate C (aunts, uncles, nieces, nephews, cousins, foster children, other in-laws and unrelated people) from 10% to 15%. The top Rate B and Rate C rates were 8% and 12% for 2021, 6% and 9% for 2022, 4% and 6% for 2023, and 2% and 3% for 2024. (source)
• Who was always exempt. Shares going to a surviving spouse, parents, grandparents and other lineal ascendants, children (including adopted children), stepchildren, grandchildren and other lineal descendants, and since July 1, 2016 a stepchild's descendants, are not taxed. Qualifying charities pay nothing. If the net estate is under $25,000, the tax is zero. (source)
• When an IA 706 is needed. For deaths from July 1, 2004 through 2024, no Iowa return should be filed when everything passes to the spouse, lineal relatives or stepchildren, unless the estate must file a federal estate tax return. Otherwise a return is required when any beneficiary's gross share exceeds the exemption for that share, or when a federal return was filed. (source)
• Due date and extensions. The tax is payable by the last day of the ninth month after the death. The Department can extend payment for hardship, up to ten years after the end of the month of death, with interest from the original due date. (source)
• A lien for ten years. Unpaid Iowa inheritance tax is a lien on the estate's property from the date of death until it is paid, for up to ten years. To sell or mortgage real estate with merchantable title, the executor, trustee or surviving joint tenant applies for a release of the lien on form 60-047, which the Department revised in 2026. (source)

Small Iowa estates: the $50,000 affidavit and $200,000 administration

• Affidavit for personal property up to $50,000. If the person's probate personal property is worth $50,000 or less, an heir or beneficiary can collect it with an affidavit once 40 days have passed, as long as no probate is pending. The procedure is for personal property; for a pre-2025 death it can also be used when the real estate passed to tax-exempt relatives as joint tenants. (source)
• The tax statement in the affidavit. The affidavit must state that no inheritance or other taxes are owed to the Department of Revenue for a death before January 1, 2025, or that any tax owed will be paid from the money collected. (source)
• Small estate administration up to $200,000. When the gross value of the probate assets is $200,000 or less, the estate can use Iowa's simplified small estate administration under chapter 635 instead of a regular probate. (source)

Iowa probate deadlines and executor fees

• Four months for creditors. Once notice to creditors has been published twice, claims must be filed with the clerk within four months of the second publication, or within one month of a mailed notice for a creditor whose identity could reasonably be found, whichever is later. (source)
• Inventory in 90 days. The personal representative files the report and inventory within 90 days of qualifying. For a death before 2025 it must also list, with estimated values, other property subject to Iowa inheritance tax. (source)
• A cap on the personal representative's fee. Iowa limits the fee to 6% of the first $1,000 of gross assets in the probate inventory, 4% of the next $4,000 and 2% of everything above $5,000. On a $300,000 estate the maximum is $6,120. Life insurance is excluded unless it is payable to the estate. (source)

Iowa income tax on an inherited IRA

• A flat 3.8% rate. For 2026, every level of Iowa taxable income is taxed at a single 3.8% rate under Senate File 2442. (source)
• Survivors can exclude retirement income. Since 2023 Iowa excludes pension and retirement income, including IRA distributions, for people who are 55 or older, disabled, or a qualifying survivor. A survivor under 55 can exclude what they receive because of the death if the person who died would have qualified that year by age or disability. (source)
• Children and parents count as survivors. Besides a spouse, a survivor needs an insurable interest in the person who died. Iowa's rule treats a son, daughter, mother or father as having one; other relatives must show a financial interest, and being named on the beneficiary form is not enough on its own. (source)

Basis when you sell inherited Iowa land

• Stepped up to the date-of-death value. Farmland, a house or shares you inherit carry a basis equal to their fair market value at death, or at the alternate valuation date if elected. Decades of appreciation before the death are not taxed to you. (source)
• Iowa is a common law state. Iowa does not have community property. When a married couple held land jointly, only the share included in the first spouse's estate gets the new basis. (source)

If the person who died lived in another state

Iowa's repeal does nothing about Nebraska, across the Missouri River, where each county still collects an inheritance tax. If your parent lived in Iowa but owned Nebraska farmland, or lived in Nebraska, expect that county's tax on the Nebraska property.

• Kentucky inheritance tax
• Maryland inheritance tax
• Nebraska inheritance tax
• New Jersey inheritance tax
• Pennsylvania inheritance tax

What matters is where the person who died lived and where their real estate is, not where you live. Compare inheritance tax by state to see who pays and how much.