On February 20, 2026, Iowa lawmakers introduced a new tax reform bill that aims to lower taxes for middle-class residents while simplifying the state's tax code. The bill, titled the Iowa Tax Relief Act of 2026, is part of Governor Sarah Johnson's broader plan to stimulate economic growth and provide relief to hardworking Iowans.One of the key provisions of the bill is a reduction in the state income tax rate for middle-class earners. Under the proposed legislation, individuals making between $30,000 and $100,000 per year would see a 2% reduction in their income tax rate, putting more money back in the pockets of working families.Additionally, the bill seeks to simplify the state's tax code by consolidating and streamlining various tax credits and deductions. This would make it easier for taxpayers to understand and comply with Iowa's tax laws, reducing the burden of tax preparation and ensuring that individuals are able to take full advantage of available credits and deductions.In a statement released following the introduction of the bill, Governor Johnson emphasized the importance of providing tax relief to middle-class Iowans. "Our state's hardworking families deserve a break, and this tax reform bill is a step in the right direction towards achieving that goal," she said. "By lowering taxes for middle-class earners and simplifying our tax code, we can help drive economic growth and ensure that Iowa remains a great place to live and work."The Iowa Tax Relief Act of 2026 will now move to the state legislature for consideration and potential amendments. Lawmakers from both parties have expressed cautious optimism about the bill, with many voicing support for efforts to lower taxes for middle-class residents.If passed, the bill is expected to take effect for the 2027 tax year, providing immediate relief to thousands of Iowa taxpayers. Stay tuned for further updates on this important piece of tax legislation as it makes its way through the legislative process.