The Idaho Tax Rebate: Who Qualifies and How to Get It

In response to a 2022 special legislative session, the Idaho state government authorized a tax rebate for its citizens. This action, signed into law as House Bill 1, returned a portion of the state’s budget surplus to taxpayers. The Idaho State Tax Commission administered and distributed these one-time payments to individuals who met specific filing and residency criteria.

Eligibility Requirements

To qualify for the 2022 Special Session rebate, an individual must have been a full-year Idaho resident for both the 2020 and 2021 calendar years. Nonresidents and part-year residents were not eligible. A full-year resident is defined as someone whose permanent home, or domicile, was in Idaho for the entire year.

A requirement was the filing of an Idaho individual income tax return for both 2020 and 2021. This included individuals who filed a Form 24, the Grocery Credit Refund form, for both years. The deadline to file these returns to be considered for the rebate was December 31, 2022.

Eligibility extended to individuals who filed using either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). The process was automatic for those who met the residency and filing criteria, with no separate application needed.

Calculating Your Rebate Amount

The determination of a taxpayer’s rebate amount followed a “whichever is greater” methodology. The state calculated the payment in two ways and issued the larger of the two resulting figures to ensure a minimum payment for all who qualified.

The first calculation method was based on a percentage of the taxpayer’s 2020 tax liability. Specifically, the state took 10% of the tax amount reported on line 20 of the 2020 Idaho Form 40. This method directly tied the rebate amount to the income tax paid in the qualifying year.

The second method was a flat-dollar amount based on filing status. For individuals with a filing status of Single, Head of Household, Qualifying Widow(er), or Married Filing Separately, the flat amount was $300. For those who filed as Married Filing Jointly, the flat amount was $600.

For example, a single filer whose 2020 tax liability on Form 40, line 20 was $2,000 had a 10% calculation of $200. Since the $300 flat amount was greater, they received a $300 rebate. Conversely, if a married couple filing jointly had a 2020 tax liability of $7,500, their 10% calculation was $750, which was greater than the $600 flat amount, so they received a $750 rebate.

Receiving Your Rebate

The Idaho State Tax Commission utilized two primary methods for distributing the rebate payments: direct deposit and paper check. The method chosen for each taxpayer was determined by the information provided on their most recently filed tax return, specifically the 2021 return.

Taxpayers who received their 2021 income tax refund via direct deposit were prioritized to receive their rebate through the same electronic method. For individuals who did not use direct deposit for their last refund, or if the banking information was no longer valid, a paper check was mailed to the last known address on file with the Tax Commission.

The distribution of payments began in late September 2022 and continued into early 2023. The state first issued the direct deposit payments, and once those were complete, the agency began mailing paper checks. Processing was done in the order that the 2021 tax returns were received.

Tracking and Troubleshooting Payment

The Idaho State Tax Commission provided an online tool called “Where’s My Rebate” for taxpayers to monitor the status of their payment. This resource was the most efficient way to get an update. To use the tool, taxpayers needed to provide their Social Security Number or ITIN, as well as their Idaho driver’s license number, state-issued ID number, or information from their 2021 Idaho income tax return.

Taxpayers needed to ensure their address was current with the Tax Commission, especially if they had moved since filing their 2021 return. An incorrect address was a common reason for a delay in receiving a paper check. If a payment could not be delivered, it was returned to the state, and the taxpayer needed to contact the commission to update their information and have the rebate reissued.

In some cases, a taxpayer’s rebate amount was less than expected or not received at all because it was used to offset outstanding debts. The state was authorized to apply the rebate funds to any existing liabilities owed to the Idaho State Tax Commission or other government agencies. This could include unpaid taxes from prior years or debts to entities like the Department of Health and Welfare or the court system.

Taxability of the Rebate

For state purposes, the 2022 Idaho tax rebate was not considered taxable income. Taxpayers did not need to report the payment on their Idaho state income tax return.

At the federal level, the IRS announced in February 2023 that the special 2022 Idaho tax rebates were not taxable income. Therefore, taxpayers were not required to report the rebate on their federal income tax returns.