For the most up-to-date federal withholding rate, refer to section 3402(q) of the Internal Revenue Code. * This guidance was updated on March 16, 2020. NOTE: Nonresidents are not exempt from Iowa tax or Iowa withholding and usually will not receive a full refund of the Iowa tax withheld. If the amount withheld exceeds the Iowa tax calculated on form IA 1040, you may be eligible for a refund of that portion of the tax withheld. Only by completing the IA 1040 can the correct amount of Iowa tax be determined. You may also owe more state income tax than what was withheld, depending on different variables such as your total Iowa income or your total income from all sources. You may be required to file an Iowa income tax return. The withholding of state income tax from your winnings will not necessarily satisfy your Iowa tax responsibilities. Winnings are subject to a 5% withholding rate for Iowa income tax purposes and a 24% withholding rate for federal income tax purposes.*
According to state and federal laws, certain winnings are subject to withholding for income tax purposes. A portion of your winnings may have been withheld for taxes upon payment of your winnings by the person making the payment (i.e., the “payer,” such as a casino).
