Overtime Laws in Iowa 2026: Pay Rates, Exemptions & Tax Deduction (2026)
⚠️Informational only — not legal or tax advice.
Guide for Iowa overtime laws 2026
Last verified: March 4, 2026
Next scheduled review: June 4, 2026
Table of Contents
- Iowa Overtime Laws at a Glance (2026)
- Does Iowa Have Its Own Overtime Law?
- How Overtime Pay Is Calculated in Iowa
- Who Is Exempt from Overtime in Iowa?
- Overtime Tax Deduction: “No Tax on Overtime” (2025–2028)
- Can an Employer Require Overtime in Iowa?
- Industry-Specific Overtime Rules in Iowa
- How to File an Overtime Wage Complaint in Iowa
- Penalties for Overtime Violations in Iowa
- Iowa Overtime Law Updates (2025–2026)
- Frequently Asked Questions
- Sources and Verification
Iowa Overtime Laws at a Glance (2026)
| Iowa Overtime Law — Key Details (2026) | |
|---|---|
| Category | Details |
| Overtime threshold | 40 hours per workweek |
| Overtime pay rate | 1.5× regular rate of pay |
| Double time | No — not required under Iowa or federal law |
| 7th consecutive day rule | No |
| State minimum wage (2026) | $7.25/hour (matches federal minimum) |
| Exempt salary threshold (2026) | Federal: $684/week ($35,568/year) |
| Daily overtime | No — weekly calculation only |
| State enforcement agency | Iowa Department of Inspections, Appeals, and Licensing (DIAL) — wage claims only; overtime referred to U.S. DOL |
| Federal enforcement | U.S. DOL Wage and Hour Division |
| Overtime tax deduction (federal) | Up to $12,500/year (2025–2028) — FLSA-covered workers |
| Iowa overtime tax conformity | Yes — Iowa conforms to the federal deduction via rolling IRC conformity (TY 2025 and 2026) |
| Statute of limitations | 2 years (Iowa Code § 614.1) / 2 years FLSA (3 if willful) |
Governing law: Fair Labor Standards Act, 29 U.S.C. § 207; Iowa Code Chapter 91A (Wage Payment Collection) Last verified: March 4, 2026
Does Iowa Have Its Own Overtime Law?
Iowa does not have a separate state overtime statute. Overtime in Iowa is governed entirely by the federal Fair Labor Standards Act (FLSA).
Under the FLSA, nonexempt employees must receive overtime pay at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. Iowa has no additional requirements that expand or modify this standard for private-sector employees.
The Iowa Department of Inspections, Appeals, and Licensing (DIAL) administers the Iowa Wage Payment Collection Act (Iowa Code Chapter 91A), which covers timely payment of earned wages, deductions, and recordkeeping. However, DIAL explicitly refers overtime complaints to the U.S. Department of Labor, Wage and Hour Division, because the FLSA — not a state statute — governs overtime in Iowa.
What this means for workers: Because Iowa has no separate overtime law, the FLSA is the sole source of overtime rights for most Iowa employees. There is no higher Iowa standard to invoke — the federal floor is the ceiling.
Federal statute: Fair Labor Standards Act, 29 U.S.C. § 207 Iowa wage payment law: Iowa Code Chapter 91A — https://www.legis.iowa.gov/law/iowaCode/sections?codeChapter=91A U.S. DOL Overtime page: https://www.dol.gov/agencies/whd/overtime
How Overtime Pay Is Calculated in Iowa
What Is a “Workweek”?
Under the FLSA, a workweek is a fixed, regularly recurring period of 168 consecutive hours (seven consecutive 24-hour periods). A workweek does not have to start on Monday or align with a calendar week — the employer may designate any day and time as the start of the workweek.
Each workweek stands alone. An employer cannot average hours across two or more workweeks to avoid overtime. If an employee works 50 hours one week and 30 hours the next, overtime is owed for the first week regardless of the second week’s total.
Source: 29 C.F.R. § 778.104–778.105
Pay Rates
Under the FLSA, nonexempt employees in Iowa earn overtime at the following rate:
Time-and-a-half (1.5× regular rate):
- All hours worked over 40 in a workweek
Iowa does not require daily overtime, double time, or a 7th-consecutive-day premium. Overtime is calculated on a weekly basis only.
What Counts as the “Regular Rate of Pay”
The regular rate is not always the same as the hourly wage. Under the FLSA (29 C.F.R. § 778.108), the regular rate includes:
- Base hourly rate or salary equivalent
- Non-discretionary bonuses and incentive pay
- Shift differentials
- Commissions
- Piece-rate earnings
The regular rate does not include:
- Discretionary bonuses (e.g., holiday gifts)
- Employer contributions to benefit plans
- Vacation, holiday, or sick pay when no work is performed
Calculation Example
Example — Weekly overtime in Iowa:
An employee earns $7.25/hour (Iowa minimum wage) and works 48 hours in one workweek:
- Regular pay: 40 hours × $7.25 = $290.00
- Overtime pay: 8 hours × ($7.25 × 1.5) = 8 × $10.875 = $87.00
- Total weekly gross pay: $377.00
Example — Higher wage earner:
An employee earns $20.00/hour and works 50 hours in one workweek:
- Regular pay: 40 hours × $20.00 = $800.00
- Overtime pay: 10 hours × ($20.00 × 1.5) = 10 × $30.00 = $300.00
- Total weekly gross pay: $1,100.00
For the current Iowa minimum wage used in these calculations, see the Iowa Minimum Wage page.
Source: 29 U.S.C. § 207; 29 C.F.R. § 778.108–778.122
Who Is Exempt from Overtime in Iowa?
Not all employees in Iowa are entitled to overtime pay. Because Iowa follows the FLSA exclusively, the federal exemption framework applies in full.
Federal FLSA Exemption Requirements
To be exempt from overtime under the FLSA, an employee must meet all three criteria:
1. Salary basis test: Paid a predetermined, fixed salary each pay period (not hourly)
2. Salary level test: Earn at least $684 per week ($35,568 per year)
3. Duties test: Perform specific job duties in one of these categories:
| Overtime Exemptions — Executive, Administrative, Professional (FLSA Standard) | |
|---|---|
| Exemption | Key duty requirement |
| Executive | Manages enterprise or department; directs 2+ employees; authority to hire/fire |
| Administrative | Office/non-manual work related to management or business operations; exercises independent judgment on significant matters |
| Professional | Work requiring advanced knowledge in a field of science or learning (acquired through prolonged specialized study) |
| Computer employee | Systems analysis, programming, software engineering — $684/week salary OR $27.63/hour |
| Outside sales | Primary duty is making sales away from employer's place of business |
Source: 29 C.F.R. Part 541
What Happened to the 2024 DOL Salary Threshold Increase?
In April 2024, the U.S. Department of Labor issued a final rule that would have raised the exempt salary threshold to $1,128 per week ($58,656/year) effective January 1, 2025.
On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated that rule nationwide in Texas v. U.S. Department of Labor (No. 4:24-cv-00499).
The salary threshold remains $684/week ($35,568/year) as of 2026.
Because Iowa has no higher state salary threshold, the federal $684/week standard is the only threshold that applies to Iowa employees. An employee earning above $684/week who meets the applicable duties test is exempt; one earning below $684/week is not exempt regardless of job title or duties.
Iowa Has No Higher Exempt Salary Threshold
Several states set their own exempt salary thresholds above the federal floor. Iowa is not among them. The comparison below shows where Iowa stands:
| Exempt Salary Threshold Comparison (2026) | ||
|---|---|---|
| State | Weekly threshold (2026) | Annual equivalent |
| Washington | $1,541.70 | $80,168 |
| California | $1,352.00 | $70,304 |
| New York (NYC) | $1,199.10 | $62,353 |
| Colorado | $1,123.08 | $58,400 |
| Maine | ~$796.17 | ~$41,401 |
| Iowa / Federal | $684.00 | $35,568 |
Source: Respective state labor agency websites; 29 C.F.R. § 541
Overtime Tax Deduction: "No Tax on Overtime" (2025–2028)
The One Big Beautiful Bill Act (Public Law 119-21), signed on July 4, 2025, created a new federal income tax deduction for qualified overtime compensation under Internal Revenue Code § 225. This deduction is available for tax years 2025 through 2028.
Who Is Eligible
- Nonexempt employees covered by the Fair Labor Standards Act (29 U.S.C. § 207)
- Must have a Social Security number valid for employment
- Cannot use the Married Filing Separately filing status
Who is NOT eligible:
- Exempt (salaried) employees who do not receive FLSA overtime
- Independent contractors (1099 workers) who are not FLSA-covered
- Employees receiving overtime only under employer policy or collective bargaining (if that overtime is not also required by the FLSA)
What Is Deductible
The deduction covers the premium portion of overtime pay — specifically the amount that exceeds the regular rate of pay.
| Overtime Tax Deduction — What Portion Is Deductible | ||
|---|---|---|
| Overtime type | What is deductible | Example ($20/hr regular rate) |
| Time-and-a-half (1.5×) | The "half" — 1/3 of total OT pay | $10/hr per OT hour ($30 − $20) |
| Double time (2×) | The "full extra" — 1/2 of total OT pay | $20/hr per OT hour ($40 − $20) |
IRS shortcut for 2025: If you only know your total overtime pay and were paid time-and-a-half, divide the total overtime amount by 3. Source: IRS Notice 2025-69
| Federal Overtime Tax Deduction — Deduction Limits | ||
|---|---|---|
| Filing status | Maximum annual deduction | Phase-out begins |
| Single | $12,500 | $150,000 MAGI |
| Married filing jointly | $25,000 | $300,000 MAGI |
| W-2 Reporting — Federal Overtime Tax Deduction | |
|---|---|
| Tax year | Employer reporting requirement |
| 2025 | NOT required to separately report (transition year — IRS Notice 2025-62). May voluntarily report in W-2 Box 14 as "QUAL OT" or provide a separate statement. |
| 2026 and later | REQUIRED to separately report qualified overtime compensation. The IRS has published a draft W-2 form indicating Box 12, Code TT for this purpose (draft form, subject to final IRS guidance). |
If an employer did not separately report overtime for 2025, the IRS allows employees to use “any reasonable method” to calculate the deductible amount, including one-third of total overtime pay (for time-and-a-half workers), payroll records, or employer statements.
Iowa Income Tax and Overtime — Iowa Conforms
Iowa uses federal taxable income as the starting point for state income tax. Iowa also adopted rolling conformity with the Internal Revenue Code, meaning changes to the IRC automatically apply for Iowa income tax purposes, except where Iowa law specifically provides otherwise.
The Iowa Department of Revenue has confirmed that Iowa conforms with the federal overtime tax deduction under P.L. 119-21:
“Iowa will conform with the federal tax provisions related to no tax on tips, no tax on overtime, no tax on car loan interest, and the new enhanced deduction for senior citizens.”
What this means for Iowa workers: For tax years 2025 and 2026, Iowa taxpayers who qualify for the federal overtime deduction under IRC § 225 will also receive the benefit on their Iowa state income tax return. The deduction flows through federal taxable income to Iowa taxable income automatically.
Withholding note: Because P.L. 119-21 was enacted after the 2025 Iowa legislative session, Iowa W-4 withholding forms for 2025 and 2026 cannot be adjusted to account for the deduction. Iowa workers may see a larger refund or smaller balance due when filing their Iowa return, reflecting the deduction applied at the annual filing stage.
Iowa’s individual income tax rate for 2026 is 3.9% (flat rate established under Iowa HF 2317 — 2022 tax reform).
Source: Iowa Department of Revenue — Impact of One Big Beautiful Bill Act on Employee Withholding: https://revenue.iowa.gov/taxes/tax-guidance/withholding-tax/impact-one-big-beautiful-bill-act-employee-withholding Source: IRS FAQs on Qualified Overtime Compensation Deduction: https://www.irs.gov/newsroom/questions-and-answers-about-the-new-deduction-for-qualified-overtime-compensation Source: IRS Notice 2025-69; IRS Notice 2025-62; IRC § 225; P.L. 119-21, § 70202
Iowa HF 1024 — Standalone State Overtime Income Tax Exemption Bill
Separately from Iowa’s conformity to the federal deduction, the Iowa House introduced HF 1024 (formerly HF 110), a bill that would exclude all overtime pay from Iowa individual income tax — not just the premium portion covered by the federal deduction.
As of the date of this review, HF 1024 was re-referred to the House Ways and Means Committee (May 15, 2025) and had not been enacted. Given that Iowa’s rolling conformity already captures the federal deduction for 2025 and 2026, HF 1024 would go further by exempting the entire overtime amount, not just the premium.
Status: In committee — not yet law Source: Iowa Legislature, HF 1024 (91st General Assembly): https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF1024
For Iowa income tax rates and details, see the Iowa State Income Tax page.
Can an Employer Require Overtime in Iowa?
Under the FLSA, there is no federal limit on the number of hours an employer can require an adult employee (age 16 and older) to work in a workweek, as long as the employee is properly compensated for all overtime hours at the applicable rate.
Iowa does not have additional mandatory overtime restrictions beyond the FLSA. Iowa is an at-will employment state. Employers may require overtime, and employees who refuse to work overtime may face disciplinary action, including termination, unless a specific law, employment contract, or collective bargaining agreement provides otherwise.
Protections That Always Apply
Regardless of mandatory overtime policies, the following protections apply in Iowa:
- All overtime hours must be compensated at 1.5× the regular rate of pay
- Employers cannot retaliate against employees who file overtime wage complaints (29 U.S.C. § 215(a)(3))
- Disability accommodation requests under the ADA may limit overtime requirements in individual cases
- Child labor laws restrict hours for employees under 18
Source: 29 U.S.C. § 207; 29 U.S.C. § 215(a)(3)
Industry-Specific Overtime Rules in Iowa
Because Iowa has no state overtime statute, federal FLSA industry exemptions and special provisions apply directly. The following categories have genuinely different rules from the standard 40-hour threshold.
Agriculture
Under the FLSA, agricultural workers are exempt from overtime pay requirements. This exemption applies to employees principally engaged in the planting, cultivating, harvesting, and handling of agricultural commodities. Iowa, as a major agricultural state, has a significant workforce covered by this federal exemption.
Note: Iowa has not enacted agricultural overtime protections (unlike Washington, which extended overtime to farmworkers beginning in 2024). Iowa farmworkers covered by the federal agricultural exemption have no separate state overtime entitlement.
Source: 29 U.S.C. § 213(b)(12); 29 C.F.R. Part 780
Healthcare (8-and-80 System)
Under 29 U.S.C. § 207(j), hospitals and residential care establishments in Iowa may enter into agreements with employees to use a 14-day work period instead of the standard 7-day workweek for overtime purposes. Under this arrangement:
- Overtime is owed for hours over 8 in a single day OR 80 hours in the 14-day period, whichever calculation results in greater overtime pay
- The agreement must be established before the work is performed
- This is an alternative calculation method, not a way to eliminate overtime
Source: 29 U.S.C. § 207(j)
Retail and Commission Employees
Under 29 U.S.C. § 207(i), retail or service establishment employees paid more than half their total compensation in commissions may be exempt from overtime if their regular rate exceeds 1.5× the applicable minimum wage.
For Iowa employees earning the $7.25/hour minimum wage: the threshold regular rate is $7.25 × 1.5 = $10.875/hour (the employee’s regular rate must exceed this amount).
Source: 29 U.S.C. § 207(i)
Transportation (Motor Carrier Exemption)
Employees whose duties affect the safe operation of motor vehicles in interstate commerce may be exempt from FLSA overtime under the Motor Carrier Act exemption. This includes drivers, driver’s helpers, loaders, and mechanics for carriers subject to U.S. Department of Transportation jurisdiction.
Source: 49 U.S.C. § 31502; 29 U.S.C. § 213(b)(1)
Public Sector / Government Employees
Under 29 U.S.C. § 207(o), public employers (state and local government) in Iowa may offer compensatory time off instead of overtime pay, provided:
- The comp time accrues at 1.5 hours for each overtime hour worked
- A prior agreement exists between the employer and employee (or union)
- The cap is 240 hours of accrued comp time (or 480 hours for public safety, emergency response, and seasonal employees)
- Employees must be permitted to use accrued comp time within a reasonable period
Iowa Administrative Code 11—Chapter 53 (governing state employees) provides that overtime-eligible classified state employees receive overtime payment in cash or compensatory time, with the employee choosing the form of payment unless the appointing authority requires cash.
Source: 29 U.S.C. § 207(o); Iowa Administrative Code 875—Chapter 53 (Pay): https://www.legis.iowa.gov/docs/aco/chapter/11.53.pdf
Compensatory Time (“Comp Time”) Rules
Under the FLSA, private-sector employers cannot offer comp time in lieu of overtime pay. An Iowa private-sector employee who works overtime hours must be compensated at 1.5× their regular rate in wages, not time off — regardless of any agreement to the contrary.
Source: 29 U.S.C. § 207(o)
How to File an Overtime Wage Complaint in Iowa
Iowa employees who have not received proper overtime pay have two primary options. Note that the Iowa DIAL explicitly refers overtime complaints to the U.S. Department of Labor because no state overtime statute exists.
Option 1: U.S. Department of Labor — Wage and Hour Division (Primary for Overtime)
| Federal Overtime Complaint — U.S. DOL (Iowa) | |
|---|---|
| Item | Details |
| Online filing | https://www.dol.gov/agencies/whd/contact/complaints |
| Phone (Des Moines office) | 515-284-4625 |
| Toll-free | 1-866-487-9243 |
| Deadline | 2 years from violation (3 years if willful) |
The Iowa DIAL wage claims FAQ specifically directs employees with overtime claims to this office: “If your claim has to do with federal minimum wage or overtime, you may contact the U.S. Department of Labor, Wage & Hour Division at 515-284-4625.”
Source: Iowa DIAL Wage Claims FAQ: https://dial.iowa.gov/i-need/claims/how-do-i-wage-claim/wage-claims-faq
Option 2: Iowa Department of Inspections, Appeals, and Licensing (DIAL) — for Other Wage Claims
DIAL handles Iowa wage claims under Iowa Code Chapter 91A (Wage Payment Collection). DIAL does not enforce overtime law, but may accept claims for other unpaid wages (such as earned wages, unauthorized deductions, or unpaid commissions) subject to these limits:
| Iowa Wage Claim — State Agency Details | |
|---|---|
| Item | Details |
| Agency | Iowa Department of Inspections, Appeals, and Licensing (DIAL) |
| Online | https://dial.iowa.gov/i-need/claims/how-do-i-wage-claim |
| Phone | 515-725-5619 |
| Eligibility | Less than 1 year (365 days) since wages were due; amount owed under $6,500; work performed in Iowa |
| Deadline | 1 year from date wages were due (DIAL administrative limit) |
For amounts exceeding $6,500 or claims older than one year, employees must file in state or federal court.
Source: Iowa DIAL — File a Wage Claim: https://dial.iowa.gov/i-need/claims/how-do-i-wage-claim
Option 3: Private Lawsuit
Employees may file a lawsuit under 29 U.S.C. § 216(b) in federal or state court. Remedies under the FLSA include:
- Back wages owed
- Liquidated damages equal to the unpaid wages (effectively doubling recovery)
- Reasonable attorney’s fees and court costs
For wage claims under Iowa Code Chapter 91A (non-overtime wages), an employee who proves an employer intentionally failed to pay wages may recover unpaid wages, liquidated damages, attorney’s fees, and court costs. Iowa § 91A liquidated damages accrue at 5% of unpaid wages per day (excluding Sundays, holidays, and the first 7 days after the missed payday), capped at the total amount of unpaid wages.
Source: 29 U.S.C. § 216(b); Iowa Code § 91A.8; Iowa Code § 91A.2 (definition of liquidated damages); Iowa Code § 614.1 (2-year statute of limitations for wage claims)
Retaliation Protection
Under 29 U.S.C. § 215(a)(3), employers cannot retaliate against employees for filing an overtime wage complaint, participating in a DOL investigation, or testifying in proceedings related to overtime violations. Under Iowa Code § 91A, retaliation protections apply to employees who file state wage claims.
Penalties for Overtime Violations in Iowa
| Federal FLSA Penalties | |
|---|---|
| Penalty type | Amount |
| Back wages | Full amount of unpaid overtime owed |
| Liquidated damages | Equal to unpaid wages (doubles total recovery) |
| Civil monetary penalty | Up to $2,451 per violation (willful or repeated — adjusted annually by DOL) |
| Criminal prosecution | Willful violations: fines up to $10,000; second offense: up to 6 months imprisonment |
Source: 29 U.S.C. § 216
Iowa State Wage Penalties (Iowa Code Chapter 91A — Non-Overtime Wages)
For non-overtime wage claims under Iowa law:
- Liquidated damages: 5% of unpaid wages per day (excluding Sundays, holidays, and first 7 days after missed payday), capped at the total amount of unpaid wages — Iowa Code § 91A.2
- Attorney’s fees: Recoverable when employer intentionally failed to pay — Iowa Code § 91A.8
- Court costs: Recoverable in civil actions
Source: Iowa Code § 91A.2; Iowa Code § 91A.8; Iowa Code § 91A.10: https://www.legis.iowa.gov/law/iowaCode/sections?codeChapter=91A
Iowa Overtime Law Updates (2025–2026)
Federal Changes Affecting Iowa
- July 4, 2025: One Big Beautiful Bill Act (P.L. 119-21) signed — created federal overtime tax deduction for tax years 2025–2028 (IRC § 225). Iowa conforms via rolling IRC conformity.
- November 15, 2024: DOL salary threshold rule vacated by federal court — exempt salary threshold remains $684/week ($35,568/year).
Iowa State Updates
- Tax Year 2026: Iowa’s flat individual income tax rate transitions to 3.9% (from 3.8% in TY 2025) under the HF 2317 tax reform schedule.
- Tax Years 2025 & 2026: Iowa conforms with the federal overtime tax deduction. Iowa W-4 withholding forms cannot reflect the deduction in advance; workers will see the benefit when filing their annual Iowa income tax return.
Pending Iowa Legislation
- HF 1024 (91st General Assembly): Would exclude all overtime pay from Iowa individual income tax — going beyond the federal deduction by exempting the entire overtime amount, not just the premium. As of May 15, 2025, re-referred to House Ways and Means Committee. Not yet enacted.
Last reviewed: March 4, 2026 Next scheduled review: June 4, 2026
Frequently Asked Questions About Overtime in Iowa
Does Iowa have overtime laws?
Iowa does not have a separate state overtime statute. Overtime in Iowa is governed entirely by the federal Fair Labor Standards Act (FLSA). Under the FLSA, nonexempt employees must receive overtime pay at 1.5 times their regular rate for all hours worked over 40 in a workweek.
What is the overtime rate in Iowa in 2026?
The overtime rate in Iowa is 1.5 times the employee’s regular rate of pay. Based on Iowa’s minimum wage of $7.25/hour, the minimum overtime rate is $10.875/hour. There is no double-time requirement under Iowa or federal law.
Does Iowa require daily overtime?
No. Overtime in Iowa is calculated on a weekly basis only. Working more than 8 hours in a single day does not trigger overtime unless total weekly hours exceed 40.
Is mandatory overtime legal in Iowa?
Yes. Iowa is an at-will employment state, and the FLSA imposes no limit on the number of hours an adult employer may require employees to work. Employers may require overtime, and employees who refuse may face disciplinary action. All required overtime hours must be compensated at 1.5× the regular rate.
Am I exempt from overtime in Iowa?
Exemption depends on both salary level and job duties. Under the FLSA, you must earn at least $684/week on a salary basis AND perform executive, administrative, or professional duties to be exempt. Iowa does not have a higher state salary threshold — the federal $684/week standard applies.
Can salaried employees get overtime in Iowa?
Yes. Being paid a salary does not automatically make an employee exempt. Salaried employees who earn less than $684/week, or who do not meet the applicable duties test, are nonexempt and entitled to overtime pay for hours over 40 in a workweek.
Is overtime taxed in Iowa?
Overtime pay is subject to both federal and Iowa state income taxes. However, for tax years 2025 and 2026, Iowa conforms to the federal overtime tax deduction under the One Big Beautiful Bill Act (IRC § 225). FLSA-covered nonexempt employees may deduct up to $12,500 (single) or $25,000 (married filing jointly) of the premium portion of overtime from federal taxable income — and since Iowa’s starting point is federal taxable income, the same deduction reduces Iowa taxable income.
How does Iowa conform to the federal overtime tax deduction?
Iowa adopted rolling conformity with the Internal Revenue Code. When P.L. 119-21 was signed on July 4, 2025, the federal overtime deduction under IRC § 225 automatically applied to Iowa income tax as well. The Iowa Department of Revenue confirmed this conformity. Because the conformity took effect after the 2025 Iowa W-4 form was finalized, Iowa workers cannot adjust withholding for this deduction and will instead receive the benefit as a larger refund or smaller balance due when filing their annual Iowa return.
What is the status of Iowa HF 1024?
HF 1024, which would exclude all overtime pay from Iowa individual income tax (not just the premium), was re-referred to the House Ways and Means Committee on May 15, 2025, and had not been enacted as of the date of this review. For the latest status, check: https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF1024
How do I calculate the overtime tax deduction?
For time-and-a-half pay, the deductible amount equals one-third of total overtime pay. For example, if you earned $6,000 in total overtime at time-and-a-half, the qualified overtime compensation is $2,000 ($6,000 ÷ 3). The IRS confirms this method in Notice 2025-69.
How do I file an overtime complaint in Iowa?
Because Iowa has no state overtime law, overtime complaints must be filed with the U.S. Department of Labor, Wage and Hour Division. Contact the Des Moines WHD office at 515-284-4625 or file online at https://www.dol.gov/agencies/whd/contact/complaints. The Iowa DIAL wage claim process does not cover overtime — DIAL refers all overtime claims directly to the U.S. DOL.
Can my employer fire me for refusing overtime in Iowa?
In most cases, yes. Iowa is an at-will employment state, and employers may discipline or terminate employees who refuse overtime, unless a law, contract, or collective bargaining agreement says otherwise. However, employers cannot retaliate against employees for filing overtime complaints with the DOL.
Can my employer give me comp time instead of overtime pay?
Not in the private sector. Under the FLSA, private-sector employers cannot offer compensatory time off in lieu of overtime pay. Iowa public-sector employers (state and local government) may offer comp time at 1.5 hours per overtime hour worked, up to 240 hours (or 480 hours for public safety and emergency workers), under 29 U.S.C. § 207(o).
Does working on weekends or holidays count as overtime in Iowa?
No. Under the FLSA, working on weekends or holidays does not automatically constitute overtime. Overtime depends on total hours worked in the workweek, regardless of which days those hours occur. An employer may voluntarily pay premium rates for weekend or holiday work, but this is not required by Iowa or federal law.
Do farm workers get overtime in Iowa?
Generally no. The FLSA exempts agricultural workers from overtime pay requirements. Iowa has not enacted any state law extending overtime to farmworkers. Accordingly, most Iowa agricultural workers are not entitled to overtime pay.
What is the statute of limitations for overtime claims in Iowa?
Under the FLSA: 2 years from the date of the violation (3 years if the employer’s violation was willful). Under Iowa Code § 614.1, wage claims must also be brought within 2 years. File as soon as possible — delays make it harder to gather evidence and may cut off claims.
What happens if my employer doesn’t pay overtime?
Under the FLSA (29 U.S.C. § 216(b)), employees may recover unpaid overtime wages, liquidated damages equal to the unpaid amount, and attorney’s fees. Contact the U.S. DOL Wage and Hour Division at 1-866-487-9243 or file online at https://www.dol.gov/agencies/whd/contact/complaints
Sources and Verification
Primary Sources
- Fair Labor Standards Act — 29 U.S.C. § 207: https://www.dol.gov/agencies/whd/overtime
- 29 C.F.R. Part 541 (Overtime Exemptions): https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-B/part-541
- 29 C.F.R. § 778 (Overtime Compensation): https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-B/part-778
- Iowa Code Chapter 91A — Wage Payment Collection: https://www.legis.iowa.gov/law/iowaCode/sections?codeChapter=91A
- Iowa Code § 614.1 — Statute of Limitations (wage claims within 2 years): https://www.legis.iowa.gov/DOCS/ACO/IC/LINC/Chapter.614.html
- Iowa Department of Inspections, Appeals, and Licensing (DIAL) — File a Wage Claim: https://dial.iowa.gov/i-need/claims/how-do-i-wage-claim
- Iowa DIAL Wage Claims FAQ: https://dial.iowa.gov/i-need/claims/how-do-i-wage-claim/wage-claims-faq
- Iowa DIAL — Wage and Child Labor: https://dial.iowa.gov/hearings/wage-and-child-labor/wages
- Iowa Department of Revenue — Impact of One Big Beautiful Bill Act on Employee Withholding: https://revenue.iowa.gov/taxes/tax-guidance/withholding-tax/impact-one-big-beautiful-bill-act-employee-withholding
- Iowa Legislature — HF 1024 (91st General Assembly, Overtime Income Tax Exemption): https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF1024
- Iowa Legislature — HF 1024 Fiscal Note: https://www.legis.iowa.gov/docs/publications/FN/1526231.pdf
- U.S. DOL Wage and Hour Division — Contact/Complaints: https://www.dol.gov/agencies/whd/contact/complaints
- IRS — Questions and Answers About the New Deduction for Qualified Overtime Compensation: https://www.irs.gov/newsroom/questions-and-answers-about-the-new-deduction-for-qualified-overtime-compensation
- IRS Notice 2025-69 (Individual Calculation Guidance for Overtime Deduction)
- IRS Notice 2025-62 (Employer Reporting Transition Relief for 2025)
- IRC § 225; P.L. 119-21, § 70202