What Is the Income Tax Rate in Idaho?
Understand Idaho's individual income tax system, including how your income is taxed and methods to reduce your tax liability.
Idaho levies a state income tax on individuals, which is a percentage of their earnings. This tax contributes to funding various public services and programs within the state. Understanding the specifics of this tax system is important for residents and those earning income within Idaho.
Understanding Idaho’s Income Tax System
Idaho operates under a progressive income tax system, where higher income levels are taxed at higher rates. Recent legislative changes have simplified this structure, moving towards a flatter tax rate for most income levels.
Individuals subject to Idaho income tax include full-year residents, part-year residents, and non-residents who earn income from Idaho sources. Full-year residents are those domiciled in Idaho for the entire year or who maintain a home and spend over 270 days in the state. Part-year residents move into or out of Idaho during the tax year. Non-residents are taxed only on income sourced from within Idaho. Taxable income refers to the portion of your gross income that remains after various deductions and adjustments are applied.
Idaho Income Tax Rates and Brackets
For the 2024 tax year, Idaho has streamlined its individual income tax rates. Most taxpayers pay a flat tax rate of 5.695% on their income. This rate applies to taxable income above certain thresholds.
For single filers, the 5.695% rate applies to taxable income exceeding $2,500. For those filing as married filing jointly, the 5.695% rate applies to taxable income above $5,000. Income below these thresholds is taxed at 0%.
Factors Affecting Your Idaho Taxable Income
Idaho taxable income is the foundation for calculating your state income tax liability. It is derived from gross income, encompassing earnings from wages, salaries, self-employment, rental income, and interest. The process starts with federal adjusted gross income (AGI), then applies specific Idaho adjustments.
Taxpayers can reduce their gross income through a standard or itemized deduction. For 2024, Idaho standard deduction amounts align with federal amounts: $14,600 for single filers and $29,200 for married filing jointly. Taxpayers can choose whichever deduction provides a greater tax benefit. While Idaho generally conforms to federal itemized deductions, it does not allow a deduction for state and local income taxes paid.
Idaho also offers income adjustments that can reduce taxable income. Social Security benefits are not taxed in Idaho. Certain retirement income exclusions and military pay adjustments may apply. Contributions to an Idaho college savings plan (IDeal account) are deductible, up to $6,000 for individuals and $12,000 for married couples filing jointly.
Idaho Tax Credits and Other Reductions
After calculating your tax, credits can further reduce the amount you owe. Unlike deductions, which lower your taxable income, credits directly reduce your tax liability dollar-for-dollar.
One common credit is the Idaho grocery tax credit, which offsets sales tax paid on groceries. For 2025, this credit is $155 per person, regardless of age, and is refundable, meaning you can receive the full value even if you owe no state income taxes. Idaho also offers an education tax credit for donations to educational institutions, up to 50% of the donation, with limits of $500 for individuals and $1,000 for married couples filing jointly. While Idaho does not have a dependent care credit, it does provide a deduction for child and dependent care expenses, which is $12,000 annually.