2026 tax year · Iowa
RSU tax in Iowa
A $60,000 vest costs $2,280 in Iowa tax on top of the federal bill. And the federal share withheld is $2,970 short.
What a $60,000 vest actually costs in Iowa
A single filer already earning $180,000 in salary. The vest stacks on top of that, so it fills the highest brackets rather than starting at the bottom:
| Withheld by your employer at 22.0% | $13,200 |
| Federal tax the vest actually costs | $16,170 |
| Federal shortfall, owed in April | $2,970 |
| Iowa income tax on the vest | $2,280 |
| Total still to find | $5,250 |
The withholding rate is flat, 22.0% below $1 million of supplemental pay. And takes no account of your salary. That is why the gap grows the more you earn.
The gap widens with salary
| Salary | Withheld | Actually owed | Shortfall | Iowa tax |
|---|---|---|---|---|
| $90,000 | $13,200 | $13,764 | $564 | $2,280 |
| $160,000 | $13,200 | $14,570 | $1,370 | $2,280 |
| $260,000 | $13,200 | $20,630 | $7,430 | $2,280 |
How Iowa treats a vest
Iowa taxes a vest as ordinary income like any other wages, adding $2,280 on top of the federal bill for $60,000 of vesting stock.
If you moved during the vesting period, the income is split between the states you worked in across it: Days worked in each state / total days in vesting period x RSU income = each state's allocation That is worked out day by day, not by where you lived on the vesting date.
What the same vest costs around Iowa
Total income of $240,000 in the states Iowa borders:
| State | Its tax | vs Iowa |
|---|---|---|
| South Dakota | No income tax | −$9,120 |
| Nebraska | $10,619 | +$1,499 |
| Missouri | $11,350 | +$2,230 |
| Illinois | $11,880 | +$2,760 |
| Wisconsin | $12,333 | +$3,213 |
| Minnesota | $18,121 | +$9,001 |
- South Dakota has no income tax at all, so the same work done there costs $9,120 less in state tax than it does in Iowa.
- Nebraska would take $1,499 more, $10,619 against Iowa's $9,120.
- Missouri would take $2,230 more, $11,350 against Iowa's $9,120.
- Illinois would take $2,760 more, $11,880 against Iowa's $9,120.
- Wisconsin would take $3,213 more, $12,333 against Iowa's $9,120.
- Minnesota would take $9,001 more, $18,121 against Iowa's $9,120.
RSU questions in Iowa
Should I sell at vest?
Selling immediately raises the cash for the $5,250 you still owe and leaves no capital gain, because the sale price equals the price you were already taxed on. Holding turns it into an investment decision, any further gain is a capital gain, and any fall is a loss you take on shares you were already taxed on at the higher value.
I moved to Iowa mid-vest, who taxes it?
Both states, split by workdays. The income is allocated across the vesting period, not assigned to wherever you happened to live on the vesting date. The state you left can still claim its share, and California, New York and Massachusetts pursue it hardest.