Idaho Income
Tax Rates & Rules

Idaho imposes individual income tax on Idaho taxable income. Current 2026 withholding guidance uses a 5.3 percent rate. Idaho revised its withholding tables in July 2026 after the Idaho Child Tax Credit expired. Full-year residents are generally taxed on income from all sources while part-year residents and nonresidents are taxed according to Idaho residency and source-income rules.

2026 Status Note: Idaho Has Updated Withholding Tables but Final 2026 Return Instructions Are Not Yet Posted

As of August 24, 2026, the Idaho State Tax Commission has published revised 2026 withholding tables but has not yet posted the final tax-year 2026 Form 40 and Form 43 instruction package. This guide therefore separates confirmed 2026 payroll guidance from annual-return figures that the state publishes later.

The current Idaho individual income tax rate is 5.3 percent. The most recent completed annual rate schedule is for 2025, when the rate was reduced to 5.3 percent. Revised 2026 payroll tables continue to use the same 5.3 percent rate, so that is the best current rate reference for 2026 planning until the final 2026 return instructions are released.

How Idaho Individual Income Tax Is Calculated

Idaho starts with information from the federal income tax return, then applies Idaho-specific additions, subtractions, deductions and credits to arrive at Idaho taxable income and final state tax. The annual return calculation is different from paycheck withholding because withholding is only a prepayment toward the year-end liability.

What Is the Idaho Income Tax Rate in 2026?

The current Idaho individual income tax rate used in 2026 withholding is 5.3 percent. Idaho moved to 5.3 percent effective January 1, 2025. The state's revised 2026 withholding tables continue to use that rate.

Do not treat 5.3 percent as a simple percentage of gross salary. Annual Idaho tax is based on Idaho taxable income after the applicable state adjustments. Paycheck withholding also uses wage tables or the percentage computation method rather than multiplying every gross paycheck by 5.3 percent.

Idaho Withholding Changed During 2026

Idaho updated its withholding tables in July 2026. Employers were told to use the revised tables going forward rather than recalculating earlier 2026 payroll. The update also reflects the sunset of the Idaho Child Tax Credit, so the withholding allowance tied to that credit is now zero.

Supplemental wages such as bonuses, commissions, overtime pay, severance and back pay are also subject to Idaho income tax. When a supplemental payment is issued separately, one permitted method is to withhold 5.3 percent from that payment.

If the goal is to estimate the tax taken from a particular paycheck rather than annual liability, use the Idaho paycheck calculator with the employee's actual pay frequency and withholding information.

Who Has to File an Idaho Income Tax Return?

Idaho filing depends on residency status and income. Residents, part-year residents and nonresidents can all have filing obligations, but the income included on the return differs for each group.

• Full-year residents generally report income from all sources, including income earned outside Idaho.
• Part-year residents report income received while an Idaho resident plus Idaho-source income received while a nonresident.
• Nonresidents report Idaho-source income.
• Part-year residents and nonresidents generally use Form 43 when the applicable Idaho gross-income threshold is met.
• Full-year residents generally use Form 40.

Current Idaho guidance uses a $2,500 Idaho-source gross-income threshold for part-year residents and nonresidents. Full-year resident filing thresholds vary by filing status and age and are published in the annual instructions. The final 2026 resident threshold table should be confirmed once the 2026 Form 40 instructions are released.

How Idaho Residency Changes the Tax Result

Residency determines how broadly Idaho can tax an individual's income. A person can be an Idaho resident based on domicile or by keeping a home in Idaho for the full year while spending more than 270 days in the state.

Idaho residents are generally taxed on income from all sources. A part-year resident is generally taxed on income received while living in Idaho plus Idaho-source income received while living elsewhere. A nonresident is taxed only on Idaho-source income.

A resident who pays income tax to another state on income that Idaho also taxes may be eligible for a credit for taxes paid to another state. The credit calculation depends on the income and tax involved, so it should be determined from the applicable Idaho return instructions rather than assumed from the amount withheld.

What Counts as Idaho-Source Income for Nonresidents?

Idaho-source income generally comes from transactions or activities in Idaho or from property located in Idaho. Compensation for services physically performed in Idaho is Idaho-source compensation.

For a nonresident employee, work location matters. Compensation for services performed outside Idaho is generally not Idaho compensation, while compensation for services performed in Idaho can be taxable to Idaho. A remote worker should therefore distinguish the employer's location from where the work was actually performed.

Does Idaho Tax Social Security and Retirement Income?

Idaho does not tax Social Security benefits even when some of those benefits are taxable on the federal return. Railroad Retirement Board benefits and certain Canadian Social Security benefits are also exempt from Idaho income tax.

Pension income can be taxable for Idaho residents, but Idaho offers a limited retirement benefits deduction for certain qualifying pensions. Eligibility can depend on age, disability status, pension type and filing circumstances. Military retirement benefits can qualify under Idaho's current retirement deduction rules when the stated eligibility conditions are met.

Idaho Has a Special Capital Gains Deduction for Certain Idaho Property

Idaho can allow a deduction equal to 60 percent of qualifying capital gain net income from the sale of certain Idaho property. The deduction is not a blanket exclusion for every stock sale or investment gain.

Qualifying property can include certain Idaho real property, business tangible personal property, livestock, timber and some partnership interests when the state's holding-period and activity requirements are satisfied. Taxpayers use Form CG to calculate the deduction.

Estimated Payments and Self-Employment Income

Idaho does not require individuals to make estimated tax payments, but the state allows voluntary estimated payments. This can be useful for self-employed taxpayers, retirees or anyone whose Idaho withholding is expected to be lower than the final state tax liability.

A taxpayer can make voluntary payments using Form 51 or Idaho Quick Pay. Self-employment income can still be subject to Idaho income tax even when no employer is withholding state tax from payments during the year.

Idaho Income Tax Withholding Is Not the Same as Final Tax

Withholding is an amount prepaid through payroll while final Idaho income tax is determined on the annual return. An employee can receive a refund when Idaho withholding exceeds final liability or owe additional tax when withholding was too low.

This is why a tax calculator based only on salary cannot replace the annual return. Residency, other income, state adjustments, credits, capital gains plus taxes paid to another state can all change the final result.

Payroll Records Can Help Support Idaho Tax Review

Pay stubs are useful for tracking Idaho withholding, current wages and year-to-date totals, but they are not official state income tax returns. Employees should compare year-to-date payroll figures with Forms W-2 and other tax documents before preparing the annual return.

After genuine payroll figures are verified, the Idaho pay stub generator can organize current earnings and deductions into a clear payroll record. For general payroll documentation, Online PayStub is designed for lawful business and recordkeeping use.