Iowa Teacher Bonus Checks Will Be Taxed

AP Photo by Charlie Neibergall.

Iowa teachers are being taxed on their $1,000 “thank you” bonuses from Gov. Kim Reynolds.

“Those are subject to state and federal tax withholding,” confirmed Tim Bloom, Newton Community School District director of business services.

Bloom said this was based on guidance from the Iowa Department of Education, which Reynolds delegated to handle distribution of the teacher retention bonuses. However, the employer side of federal taxes can be covered by the state if requested, which means school districts don’t have to dip into their own funds to cover their usual tax obligation of these additional bonuses.

From the Department of Education’s Q&A

One Central Iowa teacher said her check wound up being a little more than $700 after taxes.

Reynolds promised to use federal funds from the Biden Administration to give teachers a $1,000 retention bonus as a “thank you” for teaching during the pandemic during her January Condition of the State address.

However, there was some fine print attached.

Initially, teachers who taught a single class virtually were excluded, but that was rectified after some school districts passed their own bonus programs to include certified staff members who were left out. 

The Iowa Department of Education later modified that provision to exclude teachers who taught 100% online. Cedar Rapids TV station KCRG asked the department why it changed the policy, but it never received a response.   

The bonuses also left out school administrators and other staff such as bus drivers, cafeteria workers, custodial staff, paraeducators, school nurses, and more.

According to the Iowa State Education Association’s “Advocate To Fill The Gap!” tracking, at least 34 school districts and one Area Education Agency have approved their own bonuses to include staff members excluded from Reynolds’ plan.

Money for the state’s retention bonuses come from several federal programs funded by the American Rescue Plan Act including Elementary and Secondary School Emergency Relief Fund (ESSER III), the Coronavirus State and Local Fiscal Recover, and unspecified state dollars.


by Ty Rushing

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1 Comment on "Iowa Teacher Bonus Checks Will Be Taxed"

  • Why shouldn’t they be subject to taxation? Any bonus I have ever received was taxed. This is a non-issue as it would have been a big surprise if they weren’t taxed.

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