diff --git a/l10n_us_hr_payroll/data/state/ia_iowa.xml b/l10n_us_hr_payroll/data/state/ia_iowa.xml
index 6a7d060d..dcc90009 100644
--- a/l10n_us_hr_payroll/data/state/ia_iowa.xml
+++ b/l10n_us_hr_payroll/data/state/ia_iowa.xml
@@ -46,24 +46,146 @@
     <data noupdate="1">
         <record id="rule_parameter_us_ia_sit_tax_rate_2019" model="hr.rule.parameter.value">
             <field name="parameter_value">{
-                'daily':        [(5.13, 0.0033, 0.0), (10.25, 0.0067, 0.02), (20.50, 0.0225, 0.05), (46.13, 0.0414, 0.28), (76.89, 0.0563, 1.34), (102.52, 0.0596, 3.07), (153.78, 0.0625, 4.60), (230.68, 0.0744, 7.80), ('inf', 0.0853, 13.52)],
-                'weekly':       [(25.63, 0.0033, 0.0), (51.27, 0.0067, 0.08), (102.52, 0.0225, 0.025), (230.67, 0.0414, 1.40), (384.46, 0.0563, 6.71), (512.62, 0.0596, 15.37), (768.92, 0.0625, 23.01), (1153.38, 0.0744, 39.03), ('inf', 0.0853, 67.63)],
-                'bi-weekly':    [(51.27, 0.0033, 0.00), (102.54, 0.0067, 0.17), (205.04, 0.00225, 0.51), (461.35, 0.0414, 2.82), (768.92, 0.0563, 13.43), (1025.23, 0.0596, 30.75), (1537.85, 0.0625, 46.03), (2306.77, 0.0744, 78.07), ('inf', 0.0853, 135.28)],
-                'semi-monthly': [(55.54, 0.0033, 0.00), (111.08, 0.0067, 0.18), (222.13, 0.0225, 0.55), (499.79, 0.0414, 3.05), (833.00, 0.0563, 14.59), (1110.67, 0.0596, 33.31), (1666.00, 0.0625, 49.86), (2499.00, 0.0744, 84.57), ('inf', 0.0853, 146.55)],
-                'monthly':      [(111.08, 0.0033, 0.00), (222.17, 0.0067, 0.37), (444.25, 0.0225, 1.11), (999.58, 0.0414, 6.11), (1666.00, 0.0563, 29.10), (2221.33, 0.0596, 62.66), (3332.00, 0.0625, 99.72), (4998.00, 0.0744, 169.14), ('inf', 0.0853, 293.09)],
-                'annual':       [(1333.00, 0.0033, 0.00), (2666.00, 0.0067, 4.40), (5331.00, 0.0225, 13.33), (11995.00, 0.0414, 73.29), (19992.00, 0.0563, 349.19), (26656.00, 0.0596, 799.41), (39984.00, 0.0625, 1196.58), (59976.00, 0.0744, 2029.58), ('inf', 0.0853, 3516.98)],
+                'daily':        (
+                    (  5.13, 0.0033,  0.00),
+                    ( 10.25, 0.0067,  0.02),
+                    ( 20.50, 0.0225,  0.05),
+                    ( 46.13, 0.0414,  0.28),
+                    ( 76.89, 0.0563,  1.34),
+                    (102.52, 0.0596,  3.07),
+                    (153.78, 0.0625,  4.60),
+                    (230.68, 0.0744,  7.80),
+                    ( 'inf', 0.0853, 13.52),
+                ),
+                'weekly':       (
+                    (  25.63, 0.0033,  0.00),
+                    (  51.27, 0.0067,  0.08),
+                    ( 102.52, 0.0225,  0.25),
+                    ( 230.67, 0.0414,  1.40),
+                    ( 384.46, 0.0563,  6.71),
+                    ( 512.62, 0.0596, 15.37),
+                    ( 768.92, 0.0625, 23.01),
+                    (1153.38, 0.0744, 39.03),
+                    (  'inf', 0.0853, 67.63),
+                ),
+                'bi-weekly':    (
+                    (  51.27, 0.0033,   0.00),
+                    ( 102.54, 0.0067,   0.17),
+                    ( 205.04, 0.0225,   0.51),
+                    ( 461.35, 0.0414,   2.82),
+                    ( 768.92, 0.0563,  13.43),
+                    (1025.23, 0.0596,  30.75),
+                    (1537.85, 0.0625,  46.03),
+                    (2306.77, 0.0744,  78.07),
+                    (  'inf', 0.0853, 135.28),
+                ),
+                'semi-monthly': (
+                    (  55.54, 0.0033,   0.00),
+                    ( 111.08, 0.0067,   0.18),
+                    ( 222.13, 0.0225,   0.55),
+                    ( 499.79, 0.0414,   3.05),
+                    ( 833.00, 0.0563,  14.59),
+                    (1110.67, 0.0596,  33.31),
+                    (1666.00, 0.0625,  49.86),
+                    (2499.00, 0.0744,  84.57),
+                    (  'inf', 0.0853, 146.55),
+                ),
+                'monthly':      (
+                    ( 111.08, 0.0033,   0.00),
+                    ( 222.17, 0.0067,   0.37),
+                    ( 444.25, 0.0225,   1.11),
+                    ( 999.58, 0.0414,   6.11),
+                    (1666.00, 0.0563,  29.10),
+                    (2221.33, 0.0596,  62.66),
+                    (3332.00, 0.0625,  99.72),
+                    (4998.00, 0.0744, 169.14),
+                    (  'inf', 0.0853, 293.09),
+                ),
+                'annual':       (
+                    ( 1333.00, 0.0033,    0.00),
+                    ( 2666.00, 0.0067,    4.40),
+                    ( 5331.00, 0.0225,   13.33),
+                    (11995.00, 0.0414,   73.29),
+                    (19992.00, 0.0563,  349.19),
+                    (26656.00, 0.0596,  799.41),
+                    (39984.00, 0.0625, 1196.58),
+                    (59976.00, 0.0744, 2029.58),
+                    (   'inf', 0.0853, 3516.98),
+                ),
             }</field>
             <field name="rule_parameter_id" ref="rule_parameter_us_ia_sit_tax_rate"/>
             <field name="date_from" eval="datetime(2019, 1, 1).date()"/>
         </record>
+        <!-- https://tax.iowa.gov/sites/default/files/idr/documents/WH/IA%20Withholding%20Formula%20and%20Instructions%20TY2020.pdf -->
+        <!-- Table from page 2.-->
         <record id="rule_parameter_us_ia_sit_tax_rate_2020" model="hr.rule.parameter.value">
             <field name="parameter_value">{
-                'daily':        [(5.69, 0.0033, 0.0), (11.38, 0.0067, 0.02), (22.76, 0.0225, 0.06), (51.22, 0.0414, 0.32), (85.36, 0.0563, 1.50), (113.81, 0.0596, 3.42), (170.71, 0.0625, 5.12), (256.07, 0.0744, 8.68), ('inf', 0.0853, 15.03)],
-                'weekly':       [(28.46, 0.0033, 0.0), (56.90, 0.0067, 0.09), (113.81, 0.0225, 0.028), (256.08, 0.0414, 1.56), (426.79, 0.0563, 7.45), (569.04, 0.0596, 17.06), (853.56, 0.0625, 25.54), (1280.35, 0.0744, 43.32), ('inf', 0.0853, 75.07)],
-                'bi-weekly':    [(56.92, 0.0033, 0.00), (113.81, 0.0067, 0.19), (227.62, 0.00225, 0.57), (512.15, 0.0414, 3.13), (853.58, 0.0563, 14.91), (1138.08, 0.0596, 34.13), (1707.12, 0.0625, 51.09), (2560.69, 0.0744, 86.66), ('inf', 0.0853, 150.17)],
-                'semi-monthly': [(61.67, 0.0033, 0.00), (123.29, 0.0067, 0.20), (246.58, 0.0225, 0.61), (554.83, 0.0414, 3.38), (924.71, 0.0563, 16.14), (1232.92, 0.0596, 36.96), (1849.38, 0.0625, 55.33), (2774.08, 0.0744, 93.86), ('inf', 0.0853, 162.66)],
-                'monthly':      [(123.33, 0.0033, 0.00), (246.58, 0.0067, 0.41), (493.17, 0.0225, 1.24), (1109.67, 0.0414, 6.79), (1849.42, 0.0563, 32.31), (2465.83, 0.0596, 73.96), (3698.75, 0.0625, 110.70), (5548.17, 0.0744, 187.76), ('inf', 0.0853, 325.36)],
-                'annual':       [(1480.00, 0.0033, 0.00), (2959.00, 0.0067, 4.88), (5918.00, 0.0225, 14.79), (13316.00, 0.0414, 81.37), (22193.00, 0.0563, 387.65), (29590.00, 0.0596, 887.43), (44385.00, 0.0625, 1328.29), (66578.00, 0.0744, 2252.98), ('inf', 0.0853, 3904.14)],
+                'daily':        (
+                    (  5.69, 0.0033,  0.00),
+                    ( 11.38, 0.0067,  0.02),
+                    ( 22.76, 0.0225,  0.06),
+                    ( 51.22, 0.0414,  0.32),
+                    ( 85.36, 0.0563,  1.50),
+                    (113.81, 0.0596,  3.42),
+                    (170.71, 0.0625,  5.12),
+                    (256.07, 0.0744,  8.68),
+                    ( 'inf', 0.0853, 15.03),
+                ),
+                'weekly':       (
+                    (  28.46, 0.0033,  0.00),
+                    (  56.90, 0.0067,  0.09),
+                    ( 113.81, 0.0225,  0.28),
+                    ( 256.08, 0.0414,  1.56),
+                    ( 426.79, 0.0563,  7.45),
+                    ( 569.04, 0.0596, 17.06),
+                    ( 853.56, 0.0625, 25.54),
+                    (1280.35, 0.0744, 43.32),
+                    (  'inf', 0.0853, 75.07),
+                ),
+                'bi-weekly':    (
+                    (  56.92, 0.0033,   0.00),
+                    ( 113.81, 0.0067,   0.19),
+                    ( 227.62, 0.0225,   0.57),
+                    ( 512.15, 0.0414,   3.13),
+                    ( 853.58, 0.0563,  14.91),
+                    (1138.08, 0.0596,  34.13),
+                    (1707.12, 0.0625,  51.09),
+                    (2560.69, 0.0744,  86.66),
+                    (  'inf', 0.0853, 150.17),
+                ),
+                'semi-monthly': (
+                    (  61.67, 0.0033,   0.00),
+                    (  23.29, 0.0067,   0.20),
+                    ( 246.58, 0.0225,   0.61),
+                    ( 554.83, 0.0414,   3.38),
+                    ( 924.71, 0.0563,  16.14),
+                    (1232.92, 0.0596,  36.96),
+                    (1849.38, 0.0625,  55.33),
+                    (2774.08, 0.0744,  93.86),
+                    (  'inf', 0.0853, 162.66),
+                ),
+                'monthly':      (
+                    ( 123.33, 0.0033,   0.00),
+                    ( 246.58, 0.0067,   0.41),
+                    ( 493.17, 0.0225,   1.24),
+                    (1109.67, 0.0414,   6.79),
+                    (1849.42, 0.0563,  32.31),
+                    (2465.83, 0.0596,  73.96),
+                    (3698.75, 0.0625, 110.70),
+                    (5548.17, 0.0744, 187.76),
+                    (  'inf', 0.0853, 325.36),
+                ),
+                'annual':       (
+                    ( 1480.00, 0.0033,    0.00),
+                    ( 2959.00, 0.0067,    4.88),
+                    ( 5918.00, 0.0225,   14.79),
+                    (13316.00, 0.0414,   81.37),
+                    (22193.00, 0.0563,  387.65),
+                    (29590.00, 0.0596,  887.43),
+                    (44385.00, 0.0625, 1328.29),
+                    (66578.00, 0.0744, 2252.98),
+                    (   'inf', 0.0853, 3904.14),
+                ),
             }</field>
             <field name="rule_parameter_id" ref="rule_parameter_us_ia_sit_tax_rate"/>
             <field name="date_from" eval="datetime(2020, 1, 1).date()"/>
@@ -88,6 +210,8 @@
             <field name="rule_parameter_id" ref="rule_parameter_us_ia_sit_standard_deduction_rate"/>
             <field name="date_from" eval="datetime(2019, 1, 1).date()"/>
         </record>
+        <!-- https://tax.iowa.gov/sites/default/files/idr/documents/WH/IA%20Withholding%20Formula%20and%20Instructions%20TY2020.pdf-->
+        <!-- Step 2 -->
         <record id="rule_parameter_us_ia_sit_standard_deduction_rate_2020" model="hr.rule.parameter.value">
             <field name="parameter_value">{
                 'daily':        (   7.23,   17.81),
@@ -120,6 +244,8 @@
             <field name="rule_parameter_id" ref="rule_parameter_us_ia_sit_deduction_allowance_rate"/>
             <field name="date_from" eval="datetime(2019, 1, 1).date()"/>
         </record>
+        <!-- https://tax.iowa.gov/sites/default/files/idr/documents/WH/IA%20Withholding%20Formula%20and%20Instructions%20TY2020.pdf -->
+        <!-- Step 4 -->
         <record id="rule_parameter_us_ia_sit_deduction_allowance_rate_2020" model="hr.rule.parameter.value">
             <field name="parameter_value">{
                 'daily':         0.15,
diff --git a/l10n_us_hr_payroll/models/state/ia_iowa.py b/l10n_us_hr_payroll/models/state/ia_iowa.py
index d12adc64..9bb9ac9d 100644
--- a/l10n_us_hr_payroll/models/state/ia_iowa.py
+++ b/l10n_us_hr_payroll/models/state/ia_iowa.py
@@ -13,6 +13,9 @@ def ia_iowa_state_income_withholding(payslip, categories, worked_days, inputs):
     if not _state_applies(payslip, state_code):
         return 0.0, 0.0
 
+    if payslip.contract_id.us_payroll_config_value('state_income_tax_exempt'):
+        return 0.0, 0.0
+
     # Determine Wage
     wage = sit_wage(payslip, categories)
     if not wage:
@@ -27,7 +30,8 @@ def ia_iowa_state_income_withholding(payslip, categories, worked_days, inputs):
     deduction_per_allowance = payslip.rule_parameter('us_ia_sit_deduction_allowance_rate')[schedule_pay]
 
     t1 = wage + fed_withholding
-    t2 = t1 - standard_deduction[0] if allowances < 2 else standard_deduction[1]
+    standard_deduction_amt = standard_deduction[0] if allowances < 2 else standard_deduction[1]
+    t2 = t1 - standard_deduction_amt
     t3 = 0.0
     last = 0.0
     for row in tax_table:
diff --git a/l10n_us_hr_payroll/tests/test_us_ia_iowa_payslip_2020.py b/l10n_us_hr_payroll/tests/test_us_ia_iowa_payslip_2020.py
index d5d66b16..eaca0e71 100755
--- a/l10n_us_hr_payroll/tests/test_us_ia_iowa_payslip_2020.py
+++ b/l10n_us_hr_payroll/tests/test_us_ia_iowa_payslip_2020.py
@@ -11,11 +11,12 @@ class TestUsIAPayslip(TestUsPayslip):
     IA_UNEMP_MAX_WAGE = 31600.00
     IA_UNEMP = 1.0
 
-    def _test_sit(self, wage, additional_withholding, allowances, schedule_pay,  date_start, expected_withholding):
+    def _test_sit(self, wage, exempt, additional_withholding, allowances, schedule_pay,  date_start, expected_withholding):
         employee = self._createEmployee()
         contract = self._createContract(employee,
                                         wage=wage,
                                         state_id=self.get_us_state('IA'),
+                                        state_income_tax_exempt=exempt,
                                         state_income_tax_additional_withholding=additional_withholding,
                                         ia_w4_sit_allowances=allowances,
                                         schedule_pay=schedule_pay)
@@ -24,10 +25,12 @@ class TestUsIAPayslip(TestUsPayslip):
         cats = self._getCategories(payslip)
 
         self._log('Computed period tax: ' + str(expected_withholding))
-        self.assertPayrollEqual(cats.get('EE_US_SIT', 0.0), -expected_withholding)
+        self.assertPayrollAlmostEqual(cats.get('EE_US_SIT', 0.0), -expected_withholding)
 
     def test_2020_taxes_example(self):
         self._test_er_suta('IA', self.IA_UNEMP, date(2020, 1, 1), wage_base=self.IA_UNEMP_MAX_WAGE)
-        self._test_sit(3000.0, 0.0, 1.0, 'bi-weekly', date(2020, 1, 1), 146.68)
-        self._test_sit(3000.0, 10.0, 1.0, 'bi-weekly', date(2020, 1, 1), 156.68)
-        self._test_sit(30000.0, 0.0, 1.0, 'weekly', date(2020, 1, 1), 1640.04)
+        self._test_sit(2100.0, False, 0.0, 3.0, 'bi-weekly', date(2020, 1, 1), 83.5)
+        self._test_sit(3000.0, True, 10.0, 1.0, 'bi-weekly', date(2020, 1, 1), 0.00)
+        self._test_sit(300.0, False, 0.0, 1.0, 'weekly', date(2020, 1, 1), 6.77)
+        self._test_sit(5000.0, False, 0.0, 1.0, 'monthly', date(2020, 1, 1), 230.76)
+        self._test_sit(7500.0, False, 10.0, 2.0, 'semi-monthly', date(2020, 1, 1), 432.84)