Indiana vs Iowa:
Take-Home Pay Comparison
Side-by-side tax comparison between Indiana (2.95% top rate, flat) and Iowa (3.8% top rate, flat). See which state lets you keep more at every salary level, and how cost of living changes the picture.
Tax Structure: Indiana vs Iowa
Indiana uses a flat income tax (2.95% flat + local) while Iowa has a flat system (3.8% flat). On a $100K salary, Indiana takes $2,950 in state and local taxes compared to Iowa’s $3,800 \u2014 a difference of $850.
Both states use flat brackets, but Iowa’s top rate of 3.8% is higher than Indiana’s 2.95%.
Indiana also has local income taxes (estimated at $0/year on $100K), which Iowa does not. This widens the gap beyond just state rates.
Take-Home at Every Salary Level
Indiana wins at 10 out of 10 salary levels tested. The advantage exists but is modest across the income spectrum.
| Salary | Indiana | Iowa | Difference | Winner |
|---|---|---|---|---|
| $40K | $33,140 | $32,800 | −$340 | Indiana |
| $50K | $40,880 | $40,455 | −$425 | Indiana |
| $60K | $48,620 | $48,110 | −$510 | Indiana |
| $75K | $59,325 | $58,688 | −$638 | Indiana |
| $100K | $76,175 | $75,325 | −$850 | Indiana |
| $120K | $89,655 | $88,635 | −$1,020 | Indiana |
| $150K | $109,326 | $108,051 | −$1,275 | Indiana |
| $200K | $142,987 | $141,287 | −$1,700 | Indiana |
| $250K | $175,889 | $173,764 | −$2,125 | Indiana |
| $300K | $206,479 | $203,929 | −$2,550 | Indiana |
Cost of Living: Indiana (90) vs Iowa (89)
Take-home pay only tells part of the story. Indiana has a cost of living index of 90 while Iowa is at 89 (national average = 100).
With similar costs of living (90 vs 89), the tax difference is the primary factor. What you see in raw take-home pay is essentially what you get in purchasing power: $84,639 in Indiana vs $84,635 in Iowa.
Married Filing Jointly: How It Changes the Comparison
For a single earner at $100K filing jointly, take-home becomes $81,760 in Indiana and $80,910 in Iowa \u2014 a difference of $850. The gap remains similar regardless of filing status.
Should You Move from Iowa to Indiana?
On paper, moving from Iowa to Indiana would save $850/year on a $100K salary, or $4,250 over 5 years. But relocation involves real costs: moving expenses, potentially buying/selling a home, changing jobs, and adjusting to a new community.
At $850/year, the tax difference alone likely isn’t worth relocating for. Other factors — job market, lifestyle, family — should drive the decision. The tax savings are a nice bonus if you’re already considering the move for other reasons.