Idaho Does Have a State Income Tax

Yes, Idaho has a state income tax. If you live in Idaho or earn income there, you will owe state income tax on most types of income, including wages, self-employment income, interest, and dividends. Idaho's state income tax is separate from federal income tax — you pay both.

Idaho's income tax rates range from 1% to 5.8%, depending on your income level. The state uses a progressive tax system, meaning higher earners pay a higher percentage. Your actual rate depends on your filing status (single, married filing jointly, head of household) and your total taxable income for the year.

Key Takeaways

  • Idaho residents and anyone earning Idaho income must file a state income tax return if their income exceeds the filing threshold for their situation.
  • Idaho's tax rates range from 1% to 5.8% and increase as your income rises, with different brackets for single filers and married couples.
  • You file Idaho state taxes using Form 40 (the main return) along with any required schedules, separate from your federal return.
  • Idaho offers a standard deduction that reduces your taxable income, and the amount varies by age and filing status.
  • Self-employed Idahoans must pay both income tax and self-employment tax, which funds Social Security and Medicare.

Idaho's Tax Brackets and Rates

Idaho's income tax brackets change each year because they are adjusted for inflation. For the 2024 tax year, the brackets are structured so that you pay 1% on your first portion of income, then the rate steps up at each bracket threshold. The top rate of 5.8% applies to income above a certain level, which differs based on whether you file as single, married filing jointly, or head of household.

Because Idaho uses a progressive system, you do not pay 5.8% on all your income — only on the portion that falls in the highest bracket. For example, if you are single and your income falls into the 5.8% bracket, only the dollars above the threshold for that bracket are taxed at 5.8%; the dollars below are taxed at the lower rates that explore to those lower brackets.

The exact dollar amounts for each bracket shift annually. You can find the current year's brackets on the Idaho State Tax Commission website or in the instructions that come with Form 40.

Who Must File an Idaho State Return

You must file an Idaho state return if your income exceeds the filing threshold for your situation. The threshold depends on your age, filing status, and type of income. Generally, if you are required to file a federal return, you must also file an Idaho return.

Even if you do not owe Idaho income tax, you may want to file if you had taxes withheld from your paychecks or if you are due a refund. Filing allows you to recover any overpayment. Self-employed people and those with business income should file to report that income and claim deductions.

Standard Deduction and Tax Credits

Idaho allows a standard deduction that reduces your taxable income before the tax rate is applied. The standard deduction amount varies by filing status and age. If you are 65 or older, you may may have access to for a higher standard deduction. You can claim the standard deduction or itemize deductions if itemizing results in a larger deduction — but most Idaho filers use the standard deduction.

Idaho also offers several tax credits that can reduce the amount of tax you owe. These include credits for dependent children, education expenses, and property taxes paid. Credits are different from deductions: a credit directly reduces your tax bill dollar-for-dollar, while a deduction reduces the income that is taxed. The Idaho State Tax Commission publishes a full list of available credits each year.

Filing Your Idaho State Return

You file your Idaho state return using Form 40, the Individual Income Tax Return. You submit it to the Idaho State Tax Commission, not to the federal IRS. The filing important date is the same as the federal important date — typically April 15 of the year following the tax year, though it shifts if April 15 falls on a weekend or holiday.

You can file by mail, by phone using an automated system, or electronically through approved tax software or a tax professional. E-filing is faster and reduces errors. If you cannot file by the important date, you can request an extension, which gives you until October 15 to file without penalty — though any taxes owed are still due by April 15.

When you file, you will need your W-2 forms from employers, 1099 forms for other income, records of deductions or credits you are claiming, and your Social Security number. If you are married filing jointly, you will need both spouses' Social Security numbers.

Self-Employment Tax in Idaho

If you are self-employed, you owe both Idaho state income tax and self-employment tax. Self-employment tax funds Social Security and Medicare and is separate from income tax. You calculate self-employment tax on your net self-employment income (income minus business expenses) using Schedule SE.

Self-employed people can deduct half of their self-employment tax when calculating adjusted gross income, which lowers their taxable income. You can also deduct legitimate business expenses — supplies, equipment, home office costs, vehicle mileage — which reduces the income subject to both self-employment tax and state income tax.

If you expect to owe more than a certain amount in taxes for the year, you may need to make quarterly estimated tax payments to both Idaho and the federal government. The Idaho State Tax Commission provides worksheets to help you calculate estimated payments.

Frequently Asked Questions

What if I moved to Idaho partway through the year?

You must file an Idaho return for the months you lived in Idaho and earned income there. You will also file a return in your previous state for the months you lived there. Each state taxes only the income earned while you were a resident. You may need to claim a credit on one return to avoid paying tax twice on the same income.

Do I have to pay Idaho income tax if I work remotely for an out-of-state company?

Yes. If you live in Idaho, you owe Idaho income tax on income you earn, regardless of where your employer is located. Your employer may not withhold Idaho taxes if they are based out of state, so you may need to make estimated payments or expect a balance due when you file.

Can I deduct federal income taxes from my Idaho return?

No. Idaho does not allow you to deduct federal income taxes paid. However, you can deduct state and local property taxes and sales taxes (you choose one) up to a limit, and you can deduct mortgage interest if you itemize deductions instead of taking the standard deduction.

What happens if I file late or do not pay on time?

The Idaho State Tax Commission charges penalties and interest on late payments. Penalties increase the longer the debt remains unpaid. If you cannot pay by the important date, contact the Tax Commission to discuss payment plans or other options — they may be able to work with you to avoid additional penalties.

Where do I find the current tax forms and instructions?

The Idaho State Tax Commission website publishes all current forms, instructions, and tax tables. You can read Form 40 and related schedules there, along with a booklet explaining how to complete the return. Tax software companies also provide Idaho forms and often calculate your taxes automatically.