Minnesota vs Iowa: Tax & Cost Comparison
2026Side-by-side Minnesota vs Iowa comparison: state income tax, sales tax, property tax, cost of living, and minimum wage for 2026. Upper Midwest pair — MN's 9.85% top (5th-highest) against IA's phasing-down flat tax (3.9% by 2027) and dramatic recent tax cuts.
Written and reviewed by Konstantin Iakovlev · Methodology · Updated
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
| Tax / Cost Factor | Minnesota | Iowa |
|---|---|---|
| State income tax (top rate) | 9.85% (progressive) | 3.80% (flat) |
| State sales tax | 6.88% | 6.00% |
| Avg. effective property tax | 1.05% | 1.47% |
| Minimum wage (2026) | $11.41/hr | $7.25/hr |
| State Disability Insurance (SDI) | No | No |
| Paid Family Leave | Yes | No |
| Median home price (Q4 2025) | $340,000 | $245,000 |
| Foreclosure type | mixed | judicial |
| BEA Regional Price Parity (2024) | 96 | 89.4 |
| Median household income (2024) | $84,830 | $70,570 |
| Median 2-bedroom rent (Q4 2025) | $1,620/mo | $1,130/mo |
Worked example: $75,000 single filer, 2026
For a single filer earning $75,000 in 2026, the rough state-tax burden comparison:
- Minnesota: estimated state income tax ≈ $5,171, plus federal income tax (≈ $7,300 at 22% marginal), FICA $5,738, sales tax 6.88% on consumption.
- Iowa: estimated state income tax ≈ $1,995, plus federal $7,300, FICA $5,738, sales tax 6.00% on consumption.
Property tax depends entirely on home value. On a $400,000 home: Minnesota ≈ $$4,200/year; Iowa ≈ $$5,880/year.
Combined annual state burden (income + property on $400K + 6% of $50K consumption sales tax) — Minnesota: ~$12,809; Iowa: ~$10,875.
Why this comparison? Upper Midwest pair — MN's 9.85% top (5th-highest) against IA's phasing-down flat tax (3.9% by 2027) and dramatic recent tax cuts.
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Frequently asked questions
Which is cheaper to live in: Minnesota or Iowa?
By BEA Regional Price Parity (2024), Minnesota has a cost-of-living index of 96 and Iowa is 89.4 (US average = 100). Median household income: Minnesota $84,830, Iowa $70,570. Median 2-bedroom rent: Minnesota $1,620/mo, Iowa $1,130/mo. Iowa is the lower-cost state by this measure.
Does Minnesota or Iowa have lower income tax in 2026?
Iowa has a top income-tax rate of 3.80%; Minnesota has 9.85%. Iowa is lower at the top bracket.
What about property taxes in Minnesota vs Iowa?
Minnesota's average effective property tax rate is 1.05% (e.g., $4,200/year on a $400,000 home). Iowa's rate is 1.47% ($5,880/year on $400K). Minnesota has the lower property tax burden.
Where is the minimum wage higher: Minnesota or Iowa?
Minnesota's 2026 minimum wage is $11.13/hour; Iowa's is $7.25/hour. Minnesota is higher.