Iowa inheritance tax: repealed in 2025
Iowa no longer taxes inheritances for anyone who died on or after January 1, 2025. The calculator compares Iowa with a neighbor that still taxes, for the same estate and the same heirs.
- Deaths from
- January 1, 2025
- Iowa inheritance tax
- none
- Iowa estate tax
- none
- Federal exclusion 2026
- $15,000,000
State death taxes, Iowa against Nebraska
-$101,200
More tax in Nebraska.
| Iowa: estate and inheritance tax | $0 |
| Nebraska: estate and inheritance tax | $101,200 |
| Federal tax, either way | $0 |
Real estate keeps the tax of the state where it sits even after the move.
| State | Estate tax | Inheritance tax, all heirs |
|---|---|---|
| Connecticut | $0 | $0 |
| District of Columbia | $0 | $0 |
| Hawaii | $0 | $0 |
| Illinois | $0 | $0 |
| Kentucky | $0 | $0 |
| Maine | $0 | $0 |
| Maryland | $0 | $100,000 |
| Massachusetts | $0 | $0 |
| Minnesota | $0 | $0 |
| Nebraska | $0 | $101,200 |
| New Jersey | $0 | $150,000 |
| New York | $0 | $0 |
| Oregon | $0 | $0 |
| Pennsylvania | $0 | $150,000 |
| Rhode Island | $0 | $0 |
| Vermont | $0 | $0 |
| Washington | $0 | $0 |
Compiled by Radif Partners · How we calculate · figures read on the state revenue department, the statute and irs.gov · not legal or tax advice
Iowa's inheritance tax has been repealed for estates of people who died on or after January 1, 2025: the Department of Revenue states that the tax is not applicable to those deaths, and the instructions of the IA 706 return say the same. For a death in 2026, no Iowa inheritance tax is due on any share, whoever the heir is, and Iowa has no estate tax either, so the only tax that can reach a large Iowa estate is the federal estate tax above $15,000,000. The repeal does not erase the past. A death before January 1, 2025 is still governed by the old law: an Iowa return may be due when a beneficiary's gross share exceeds the exemption that applied or a federal return was filed, and supplemental and amended returns are still processed. Before the repeal, spouses, children, stepchildren, grandchildren and parents were already exempt, and the rates for 2024 deaths had been cut sharply. The other tax risk for Iowa families is land across the border: Nebraska, Minnesota and Illinois still tax.
What the repeal covers
The Department's introduction to Iowa inheritance tax opens with one line: Iowa inheritance tax is not applicable for deaths occurring on or after January 1, 2025. The IA 706 instructions of July 2025 repeat that the tax "has been repealed for estates of individuals with a date of death on or after January 1, 2025". The date that counts is the date of death, not the date the will was signed, the date the estate is opened or the date property is distributed. A parent who died in December 2024 and a parent who died in January 2025 leave estates under two different regimes, even if both are administered in 2026.
The tax was always a tax on the beneficiary's right to receive property, as the Department explains, in contrast to the federal estate tax on everything the deceased owned. Its repeal therefore matters most to the heirs who used to pay: brothers and sisters, sons- and daughters-in-law, nieces, nephews, cousins, friends and some organizations.
Deaths before 2025
For a death before January 1, 2025, the old law still applies. The IA 706 instructions say a return must be filed when the gross share of any beneficiary, heir, transferee or surviving joint tenant, counted without reduction for liabilities, exceeds the allowable exemption from that share, or when a federal estate tax return has been filed; the estate includes property held in trust or otherwise outside probate. Supplemental and amended returns are still handled. The rules had already been narrowed over the years, as the Department's 2024 rate sheet recalls: the surviving spouse's share has been exempt since 1988, the shares of parents, grandparents, children, stepchildren, grandchildren and other lineal ascendants and descendants since July 1997, and the descendants of a stepchild since July 2016. For deaths in 2024, the last year of the tax, the statutory rates were applied after a large reduction, and the rate sheet prints the reduced brackets by beneficiary class. This site does not compute the pre-2025 tax; the rate sheet and the return instructions are the references.
Land across the border
The repeal is Iowa's. A neighbor state still taxes real estate located in its territory when the owner dies, even if the owner lived in Iowa. Farmland in Nebraska, a lake house in Minnesota and land in Illinois are the usual cases. Each of the four examples below concerns an unmarried Iowa resident with two heirs; the amounts are the taxes owed to the neighbor state on the property there.
| Case | Estate | Property next door | Tax owed to that state |
|---|---|---|---|
| Nebraska farmland to two nephews | $3,000,000 | $1,000,000 | $101,200 |
| Minnesota lake house to two children | $5,000,000 | $1,500,000 | $78,000 |
| Illinois farmland to two children | $6,000,000 | $2,000,000 | $152,024 |
| South Dakota land to two nephews | $3,000,000 | $1,000,000 | $0 |
Nebraska taxes the nephews through its inheritance tax, class by class (Nebraska inheritance tax). Minnesota and Illinois tax through their estate taxes, which reach a nonresident's real estate in proportion to the whole estate once the estate crosses the state's threshold (Minnesota, Illinois). South Dakota, like Missouri and Wisconsin, has neither tax.
Iowa against a neighbor, same estate
State death taxes, Iowa against Nebraska
-$101,200
| Iowa: estate and inheritance tax | $0 |
| Nebraska: estate and inheritance tax | $101,200 |
| Federal tax, either way | $0 |
Joint property and trusts
Under the old law, the Iowa estate for inheritance tax purposes included property held in trust or otherwise outside probate, and a surviving joint tenant was one of the persons whose share counted toward the filing test. That is why estates of people who died before January 1, 2025 sometimes still need a return even though nothing went through probate. For deaths from January 1, 2025, the form of ownership no longer changes anything in Iowa: a payable-on-death account, a joint account with a niece or a trust share left to a friend carries no Iowa tax. It can still matter in the neighbor state, since Nebraska, for instance, taxes property passing by a transfer on death deed.
What remains for an Iowa estate in 2026
With the inheritance tax gone and no estate tax, an Iowa resident's estate faces only the federal estate tax, which starts above $15,000,000 per person and $30,000,000 for a married couple who elect portability (federal exemption). The Department's page adds that other state or federal law may apply to the deceased or the estate, which is the case for the property described above. Probate itself is not a tax, and the Department's introduction says plainly that its information is not about probate and is not legal advice.
Iowa thus joins the states listed on states without estate tax. Among the five states that still tax inheritances, the closest to Iowa are Nebraska and Kentucky; inheritance tax by state sets out the rates for the same heirs in each.