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Live in Utah, Work in Iowa: Which State Taxes Your Paycheck?

Both states — credit offsets the double taxIowa withholds

Answer

You file twice: Iowa first, then Utah. There is no reciprocity agreement between these two states, so Iowa taxes the income where it was earned and Utah taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.

Last verified

Without an agreement between Utah and Iowa, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Iowa figure is an input to the Utah return, so completing Utah first means doing it twice.

A Utah resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule TC-40S. The credit is capped at the Utah tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.

Iowa also has a layer below the state one, and it is the layer that survives every agreement: Many Iowa school districts levy a surtax calculated as a percentage of state income tax. It is reported on the state return rather than separately.

What you file

  1. 1Nonresident return · IowaForm IA 1040 with Schedule IA 126

    File the Iowa nonresident return FIRST — you need the Iowa tax figure before you can complete Utah.

  2. 2Resident return · UtahSchedule TC-40S

    File a Utah resident return reporting all income, then claim the credit for tax paid to Iowa. The credit is capped at what Utah would have charged on that same income, so if Iowa taxes it at a higher rate the difference is not refunded.

The two states, side by side

 UtahIowa
Taxes wagesYes — flatYes — flat
Reciprocity partnersNone1 (Form 44-016)
Convenience ruleNoNo
Nonresident returnForm TC-40 with Schedule TC-40BForm IA 1040 with Schedule IA 126
Credit for other-state taxSchedule TC-40SForm IA 130
Nonresident safe harbourNone publishedNone published
Local income taxNoYes
Revenue departmentUtah State Tax CommissionIowa Department of Revenue
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Iowa and working in Utah gives:Both states — credit offsets the double tax.

Iowa to Utah →

Same two states, different situation

The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.

Other Utah pairs

Questions people actually ask

I live in Utah and work in Iowa. Which state takes the tax out of my paycheck?

You file twice: Iowa first, then Utah. There is no reciprocity agreement between these two states, so Iowa taxes the income where it was earned and Utah taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.

Which state should my employer be withholding for?

Iowa. The wages are sourced to Iowa, so Iowa withholding is correct and there is no Utah withholding to set up.

Will I end up paying tax twice on the same income?

Not twice over, but you will pay the higher of the two rates. Utah gives residents a credit for tax paid to Iowa on the same income, claimed on Schedule TC-40S. The credit is capped at the Utah tax on that income, so if Iowa taxes it more heavily the excess is not refunded by either state.

How current is this?

The Utah and Iowa rules on this page were last checked against Utah State Tax Commission and Iowa Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.

Sources

Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.