Iowa PTET 2026: deadline, rate, who can elect
Iowa (IA), tax year 2026, from the same rules the connector returns. Last verified October 24, 2026.
Informational. Not tax advice.
Elective PTET
Yes
House File 352 created a voluntary election for a partnership or S corporation to pay Iowa income tax at the entity level.
Who can elect
An entity taxed as a partnership or S corporation for federal and Iowa purposes that must file IA 1065 or IA 1120S. A publicly traded partnership and a disregarded entity cannot elect.
The page includes an S corporation, general partnership, LLC, LLP, or limited partnership when those filing rules are met.
How the election is made
An authorized person who can sign the IA 1065 or IA 1120S and bind the entity and its owners. The election is for one year and must be made again each year. Once made, it binds the entity and all owners.
The page says the 2023-and-later procedure differs from 2022. It does not state the 2026 form steps.
Election deadline
A separate election is made for each tax year on a form and at a time prescribed by the department. Iowa Code section 422.16C does not state a calendar date. Once made, the election is irrevocable and binds the entity and all partners or shareholders.
The 2026 Code states that timing for tax years beginning on or after January 1, 2022.
Rate
The tax equals the rate under Iowa Code section 422.5. Section 422.5 of the 2026 Iowa Code imposes tax at three and eight-tenths percent.
Section 422.16C applies that rate for tax years beginning on or after January 1, 2022, while the IRC section 164(b)(6) limitation applies. The Department page's 6 percent figure is for 2023.
Owner relief
Owners receive a percentage of the PTET as a refundable tax credit.
The page states that credit. The 2022 and 2023 reduction percentages are not used as the 2026 figure.
Estimates
Not verified. The 2026 Iowa Code note to section 422.16C says estimated tax payments are not required for a tax year beginning prior to May 11, 2023. The section does not state 2026 installment dates.
Sunset or repeal
The election is no longer scheduled to expire. It may be made for a year beginning on or after January 1, 2022, while the federal SALT limitation under IRC section 164(b)(6) applies.
The page says this was updated December 22, 2025, and cites 119-21 for the removal of the expiration.
Still open in the source review
- The 2026 Iowa Code note to section 422.16C says estimated tax payments are not required for a tax year beginning prior to May 11, 2023. The section does not state 2026 installment dates.
Sources for this year
Bonus-depreciation conformity is on its own page.