Idaho — Personal Income Tax

Idaho resident individuals must file a state income tax return if they are required to file a federal return under Internal Revenue Code section 6012(a)(1). This means the Idaho filing obligation is directly tied to the federal filing requirement—if a resident must file with the IRS, they must also file with Idaho.

The Idaho State Tax Commission specifies income thresholds for residents based on filing status and age. For the 2025 tax year, residents under age 65 must generally file if gross income is $15,000 or more (single) or $30,000 or more (married filing jointly). However, the statutory test remains the federal filing requirement.

One important exception: if a taxpayer files a federal return solely to pay self-employment tax and is not otherwise required to file federally, no Idaho return is required.

Source: Idaho Code § 63-3030(a)(1) Source: Idaho State Tax Commission – Individual Income Tax Basics

Idaho imposes a flat personal income tax rate of 5.3% on taxable income above a zero-rate threshold. The statutory base threshold is $2,500 for single filers and $5,000 for taxpayers filing joint returns. Surviving spouses and heads of household are treated as joint filers for purposes of the threshold amount.

Annual inflation adjustment

Idaho Code § 63-3024(3) requires the Idaho State Tax Commission to adjust these thresholds annually for inflation beginning in taxable year 2000. The statute directs the Commission to prescribe a factor based on the consumer price index for all U.S. urban consumers (published by the U.S. Department of Labor) so that inflation will not result in a tax increase. The adjustment multiplies the last threshold amount by the percentage increase in the consumer price index for the calendar year immediately preceding the calendar year to which the adjusted thresholds will apply.

The Idaho State Tax Commission has adjusted the income tax thresholds each year since 1998 to account for inflation. For tax year 2025, the inflation-adjusted thresholds are $4,811 for single filers and $9,622 for married filing jointly, head of household, and qualifying surviving spouse filers. These inflation-adjusted amounts change annually; practitioners should consult the Idaho State Tax Commission's current-year tax forms (Form 40 or Form 43) or the Commission's rate schedule page to confirm the thresholds for the year at issue.

Source: Idaho Code § 63-3024 Source: Idaho State Tax Commission – Search Category: Income Tax

Idaho defines an individual as a resident for income tax purposes under two alternative tests. First, an individual domiciled in Idaho for the entire taxable year is a resident. Second, an individual who maintains a place of abode in Idaho for the entire taxable year and spends more than 270 days in the state during that year is a resident. For the day-count test, any part of a calendar day in Idaho counts as a full day unless the individual can show presence was for a temporary or transitory purpose.

Source: Idaho Code § 63-3013

Idaho allows individual taxpayers to claim the standard deduction as defined in section 63 of the Internal Revenue Code. Because Idaho conforms to the federal definition, the standard deduction amounts for Idaho personal income tax mirror those set by federal law, subject to Idaho's IRC conformity date.

Recent deduction amounts:

• For the 2025 tax year (returns filed in 2026), the standard deduction for Idaho follows federal amounts: $15,000 for single and married filing separately, $30,000 for married filing jointly, and $22,500 for head of household.
• For the 2026 tax year (returns filed in 2027), the federal standard deduction increased due to inflation: $16,100 for single and married-filing-separately, $32,200 for married filing jointly, and $24,150 for head of household. Idaho adopted these new amounts by reference, as its IRC conformity date remains current with federal law (Idaho Code § 63-3004).

Practical note: Idaho taxpayers may choose to itemize deductions instead of claiming the standard deduction. The law directly references the federal standard deduction unless the Idaho Legislature acts to decouple or delay conformity for a particular year. For detailed, up-to-date instructions and conformity status, practitioners should reference the Idaho State Tax Commission website and Idaho Form 40 instructions annually.

Source: Idaho Code § 63-3022(j)(1) Source: Idaho Code § 63-3004

Idaho individual income tax returns are due on or before April 15 following the close of the calendar year. This deadline aligns with the federal income tax return due date. Idaho law allows an automatic six-month extension to October 15 for taxpayers who have paid enough of their tax liability by April 15. Payment is due by April 15 even if an extension to file is obtained.

Source: Idaho Code § 63-3032 Source: Idaho State Tax Commission – Individual Income Tax Filing and Paying

A nonresident individual must file an Idaho income tax return if gross income from Idaho sources for the taxable year exceeds $2,500. This threshold applies regardless of whether the nonresident has any physical presence in Idaho beyond the income-generating activity itself. The return is filed on Form 43.

What constitutes Idaho-source income

For nonresident individuals, Idaho taxable income includes only income derived from or related to sources within Idaho, computed under Idaho Code § 63-3026A(1). The statute specifies several categories of Idaho-source income:

Compensation for personal services performed in Idaho. If a nonresident performs personal services both within and outside Idaho (as an employee, agent, independent contractor, partner, or otherwise), Idaho-source compensation is determined by multiplying total compensation by the "Idaho compensation percentage." Under Idaho Admin. Code r. 35.01.01.270, this percentage equals Idaho workdays divided by total workdays. An "Idaho workday" is any day on which the taxpayer performs personal services in Idaho for a particular employer or principal. If services are performed both inside and outside Idaho on the same day, that day counts as an Idaho workday unless the taxpayer establishes that less than 50% of the services were performed in Idaho.

Ownership or disposition of Idaho real or tangible personal property. Income from real property located in Idaho, or tangible personal property located in Idaho, is Idaho-source income. This includes rents, royalties, and gains or losses from the sale or other disposition of such property.

Intangible personal property employed in an Idaho business. Income from intangible personal property is Idaho-source income only to the extent the property is employed in a business, trade, profession, or occupation conducted or carried on in Idaho. However, interest income from an installment sale of real or tangible personal property located in Idaho is Idaho-source income under the same rule. Nonresident individuals are not taxable on investment income from a "qualified investment partnership," defined as a partnership deriving at least 90% of its gross income from investments that would not be taxable to a nonresident if held directly.

Pass-through entity income. A nonresident's share of income from a partnership or S corporation doing business in Idaho is sourced to Idaho. For partnerships, guaranteed payments to a partner for services or the use of capital are sourced to Idaho based on where the services are performed or the capital is used. Guaranteed payments in excess of $250,000 (adjusted annually for inflation under Idaho Code § 63-3024) are sourced based on the partnership's Idaho apportionment factor. Gains or losses on the sale of a partnership interest or S corporation stock are sourced to Idaho to the extent of the entity's Idaho apportionment factor in the taxable year immediately preceding the sale.

Gambling and wagering. Income from pari-mutuel wagering, charitable gaming, or other gambling conducted within Idaho is Idaho-source income, except as limited by Idaho Code § 67-7439.

Exclusions from Idaho-source income

Active-duty military pay received by a nonresident for service in the U.S. armed forces is not Idaho-source income under Idaho Code § 63-3026A(3)(d), regardless of where the service is performed.

Source: Idaho Code § 63-3030(a)(2) Source: Idaho Code § 63-3026A Source: Idaho Admin. Code r. 35.01.01.270 (via Idaho State Tax Commission)

Idaho grants an automatic six-month extension to October 15 for individual income tax returns, but this extension is not unconditional. To qualify for the automatic extension, a taxpayer must pay at least 80% of the total tax due by the April 15 unextended due date.

Two payment safe harbors

Idaho Code § 63-3033(a) provides two alternative safe harbors to meet the 80% payment threshold:

1. Current-year safe harbor: Payment of at least 80% of the total tax due on the income tax return when it is filed, or
2. Prior-year safe harbor: Payment of 100% of the total tax due on the prior year's income tax return (if a return was filed for the prior year).

A taxpayer who satisfies either safe harbor qualifies for the automatic six-month extension. The prior-year safe harbor mirrors the federal estimated tax safe harbor in structure—the taxpayer may satisfy the payment requirement by paying 100% of the prior year's actual tax liability, even if the current year's liability is higher.

Small-balance exception

Under Idaho Code § 63-3033(b), if the payment required to meet the 80% threshold (after accounting for withholding credits and estimated payments already made) is $50 or less, no additional payment is required to qualify for the extension. However, interest will accrue on any unpaid balance from the April 15 due date.

Penalty for underpayment

If the taxpayer pays less than 80% of the total tax due and the payment is also less than 100% of the prior year's tax liability—and the small-balance exception does not apply—Idaho Code § 63-3033(f) provides that "a penalty may be applied to the total of the balance due unless reasonable cause can be established." The penalty structure depends on when the balance is ultimately paid:

• If the tax is paid by the extended October 15 due date, the penalty is 2% per month from the April 15 original due date to the payment date.
• If the tax is not paid by the extended October 15 due date, the penalty prescribed by Idaho Code § 63-3046(c) applies from the April 15 original due date. That penalty is 5% of the unpaid tax for each month (or part of a month) the return or payment is late.

Interest accrual

Even when the extension is granted, interest accrues on any unpaid tax from the April 15 original due date to the payment date at the rate specified in Idaho Code § 63-3045. Idaho Code § 63-3033(g) provides that interest runs in all cases of extension except those related to IRC § 7508 (military or terrorist action postponements). The extension grants additional time to file, but it does not extend the time to pay without interest.

Practical summary

The Idaho extension is automatic if the taxpayer pays at least 80% of the current year's tax (or 100% of the prior year's tax) by April 15. Taxpayers who underpay the threshold may still file late under the extension if they can establish reasonable cause, but penalties and interest will apply. The extension is not truly "automatic regardless of payment"; payment of at least 80% (or the prior-year amount, or a de minimis balance of $50 or less) is a condition precedent to penalty-free use of the six-month extension period.

Source: Idaho Code § 63-3033 Source: Idaho Code § 63-3046

Idaho conforms to the Internal Revenue Code (IRC) as amended and in effect on a rolling conformity date specified in Idaho Code § 63-3004. The conformity date determines which version of the federal tax code Idaho adopts for state income tax purposes, including provisions governing gross income, deductions, exemptions, and credits.

House Bill 559 (signed February 10, 2026)

According to the Idaho State Tax Commission, Governor Brad Little signed House Bill 559 on February 10, 2026, updating Idaho's IRC conformity to the Internal Revenue Code as in effect on January 1, 2026. The bill was enacted with retroactive application to January 1, 2025, meaning Idaho taxpayers filing 2025 tax year returns would apply the IRC as in effect on January 1, 2026.

The Idaho State Tax Commission announced on February 17, 2026, that "House Bill 559 conforms to most of the provisions in the federal One Big Beautiful Bill Act. This includes the larger standard deduction amounts, the enhanced senior deduction, and the deductions for qualified tips from wages, car loan interest, and overtime compensation."

Impact on 2025 tax year standard deduction amounts

Idaho Code § 63-3022(j)(1) allows taxpayers to claim the standard deduction "as defined in section 63 of the Internal Revenue Code." Because Idaho's standard deduction definition directly references the federal IRC, updating the conformity date to January 1, 2026, automatically adopted the standard deduction amounts in effect under the federal IRC as of that date for Idaho 2025 tax year returns.

On February 20, 2026, the Idaho State Tax Commission announced that it "programmed its systems to automatically give the larger standard deduction amounts to taxpayers who take the standard deduction on their 2025 income taxes. This means that those taxpayers who've already filed their taxes won't need to file amended returns to claim the larger standard deduction."

The Tax Commission issued updated instructions for Idaho Form 40 (Individual Income Tax Return) and Idaho Form 43 (Part-Year Resident and Nonresident Income Tax Return) on March 3, 2026, showing how to claim the enhanced senior deduction and the deductions for tips from wages, car loan interest, and overtime compensation for the 2025 tax year. For tax year 2025, the Tax Commission did not add new lines to the tax forms; instead, taxpayers claim those deductions using existing form lines as described in the updated instructions.

Retroactive conformity mechanism

The Idaho State Tax Commission's conformity guidance page explains that "Once Idaho conforms to the IRC, it follows the federal effective date of any federal changes adopted, including any retroactive dates." This principle allowed the provisions of federal tax legislation effective for the 2025 tax year to apply in Idaho for the 2025 tax year once House Bill 559 was enacted in February 2026, even though many taxpayers had already filed their 2025 Idaho returns before the Idaho conformity bill was signed.

Decoupling from certain federal provisions

According to the Idaho State Tax Commission, House Bill 559 did not conform Idaho to all federal provisions. Idaho continues its decoupling from IRC § 168(k) bonus depreciation. House Bill 559 also does not conform to IRC § 168(n) (qualified production property expensing under the federal One Big Beautiful Bill Act). The bill also maintains separate treatment for domestic research and experimental expenditures incurred between January 1, 2022, and January 1, 2025, under which Idaho taxpayers must continue to apply the IRC as in effect immediately prior to enactment of the federal transition rules for those years.

Source: Idaho Code § 63-3004 Source: Idaho Code § 63-3022(j)(1) Source: Idaho State Tax Commission – Conformity to Federal Internal Revenue Code (IRC) Source: Idaho State Tax Commission – Update on filing 2025 Idaho income taxes now that conformity is law (Feb. 17, 2026) Source: Idaho State Tax Commission – More guidance on conformity deductions and filing 2025 Idaho income taxes (Feb. 20, 2026) Source: Idaho State Tax Commission – File now to get your conformity deductions (March 3, 2026)

Idaho allows a resident or part-year resident individual to claim a credit against Idaho personal income tax for income taxes paid to another state, territory, or country on income taxed by both jurisdictions in the same tax year.

Who may claim the credit The credit is available to full-year Idaho residents and part-year residents, but not to nonresidents. The taxpayer must have paid a net income tax to another state, territory, or country on income also subject to Idaho income tax for the same year. Taxes paid by S corporations, partnerships, or LLCs are not directly creditable at the entity level, but partners, shareholders, or members may qualify to the extent the tax is imposed on and paid by them personally and not refunded by the entity (see Rule 700.02).

What income qualifies Only income taxed by both Idaho and the other state in the same year qualifies. If the other jurisdiction taxes the same item in a different year (e.g., due to sourcing or timing differences), that portion is not eligible. The credit applies only to income taxes that are substantially similar to the Idaho income tax—not to franchise, gross receipts, minimum, alternative, excise, or sales/use taxes.

Computation of the credit The credit is the lesser of:

1. The actual net income tax paid to the other jurisdiction on income also taxed by Idaho in the same year; or
2. The Idaho tax due on the same income.

The computation is done separately for each jurisdiction. If a taxpayer pays income tax to multiple states on the same income, a separate credit computation is required for each state. The total credit claimed cannot exceed the Idaho income tax attributable to the double-taxed income (Rule 700.05).

Limits, exclusions, and interactions

• No credit is allowed for taxes to the federal government or for inheritance, gift, property, franchise base, excise, gross receipts, or sales taxes (Rule 700.03).
• No credit is allowed for taxes that have been refunded or offset by credits from the other jurisdiction (Rule 700.05(b)).
• The credit is nonrefundable; it can reduce Idaho tax to zero but cannot create a refund.
• Idaho requires taxpayers to file and pay the other state’s tax as a resident or nonresident, substantiated by returns and proof of payment (Rule 700.06).
• For taxes paid to U.S. localities (e.g., New York City), each credit is computed and limited separately from the state’s credit (Rule 700.07).
• For part-year residents, only double-taxed income received during the Idaho residency period qualifies. Dual residents may face additional limits under the other jurisdiction’s credit rules (Rule 700.08).

Source: Idaho Code § 63-3029 Source: Idaho Admin. Code r. 35.01.01.700

Idaho individual income tax does not provide for a personal or dependent exemption for tax years after 2018.

Repeal of Idaho personal exemption Prior to tax year 2018, Idaho allowed a personal exemption deduction (indexed for inflation), generally conforming to the dependency standards under federal law. However, the Idaho Legislature enacted House Bill 463 (2018), which repealed the longstanding Idaho personal exemption under Idaho Code § 63-3026A as part of Idaho’s response to federal Tax Cuts and Jobs Act (TCJA) changes. This resulted in a $0 exemption amount for individual, spouse, and dependents after 2018.

Subsequent developments and current status Subsequent Idaho legislation did not reinstate a state-level personal or dependent exemption for individual income tax purposes. Instead, Idaho adopted a supplemental child tax credit under Idaho Code § 63-3029L (separate from the federal child tax credit), but this is not a per-person exemption and applies only to dependents under age 17 meeting the federal credit definition. For all other taxpayers and dependents, there is no personal or dependent exemption deduction available on Idaho Form 40 or Form 43.

For practitioners: verify the absence of the personal exemption on the Idaho individual income tax return instructions and the text of Idaho Code § 63-3026A (which remains repealed as of 2026). The Idaho State Tax Commission’s Form 40 instructions for tax year 2025 direct taxpayers to the child tax credit provision but do not permit any personal or dependent exemption deduction.

Summary Idaho does not allow a personal or dependent exemption deduction for individual income tax filers for tax years after 2018. Eligibility for the child tax credit is governed by a separate statute, not as a per-person exemption or deduction.

Source: Idaho State Tax Commission — 2025 Idaho Individual Income Tax Instructions (Form 40, p. 6) Source: Idaho Code § 63-3026A (repealed 2018)

Idaho individual income tax is imposed on Idaho taxable income, which begins with federal adjusted gross income (AGI) and is then subject to a set of Idaho-specific additions and subtractions. This statutory framework, running through Idaho Code § 63-3022 and detailed in IDAPA 35.01.01 (Income Tax Administrative Rules), determines what must be added to or subtracted from a taxpayer's federal AGI to arrive at Idaho taxable income. These modifications are not optional—taxpayers must follow the specific lines and instructions for the relevant year.

Key Additions to Federal AGI

• State and local income taxes deducted federally (if itemized) must be added back. See Idaho Code § 63-3022(a).
• Any federal net operating loss deduction claimed must be added back, with Idaho NOL allowed separately under state rules (§ 63-3022(b)).
• Special depreciation allowances (e.g. IRC § 168(k) bonus depreciation) must be added back. See Rule 105 and § 63-3022(o).
• Non-Idaho municipal bond interest: Interest on state and local bonds outside Idaho must be added back (§ 63-3022(c)).

Key Subtractions from Federal AGI

• Interest income from U.S. government obligations (e.g. Treasury bonds) if included in federal AGI (§ 63-3022(l)).
• Capital gains deduction: Idaho allows a deduction for a portion of qualifying net capital gains (see § 63-3022H and Rule 133).
• Certain retirement benefits: Military retirement, Civil Service retirement, and others have allowed subtractions (§ 63-3022A-B; Rule 154).
• Social Security benefits are not taxed if excluded at the federal level (§ 63-3022(g)).
• Idaho medical savings account contributions and qualified withdrawals (§ 63-3022(d)).

Additional Adjustments

• Nonresidents and part-year residents use Idaho Form 43 and make separate modifications as apportioned by Idaho-source income. The additions/subtractions rules for these filers are governed by § 63-3026A and IDAPA Rules 253-254.

Annual Form Reference The Idaho State Tax Commission issues Form 39R (resident adjustments), Form 39NR (nonresident/part-year adjustments), and detailed instructions each year, which enumerate the current statutory and regulatory adjustments. Practitioners must consult the form instructions for the precise scope, eligibility, and supporting documentation.

Source: Idaho Code § 63-3022 Source: IDAPA 35.01.01, Rule 105 Source: IDAPA 35.01.01, Rule 120-121

Idaho provides a nonrefundable child tax credit for qualifying children under Idaho Code § 63-3029L. For taxable years beginning on or after January 1, 2018, and before January 1, 2026, the credit amount is $205 per qualifying child (regardless of the number of taxpayers claiming the same child), and it applies only against Idaho income tax liability. The credit is available to both residents and part-year residents; nonresidents are not eligible. For part-year residents, the statute and the Idaho State Tax Commission prorate the credit based on the portion of the year the taxpayer was domiciled in Idaho.

Qualifying child definition A qualifying child for the Idaho credit must meet the federal definition under Internal Revenue Code § 24(c): under age 17 at the end of the tax year, a citizen or resident of the United States, and claimed as a dependent by the taxpayer on the Idaho return. The child must have a Social Security number issued before the due date of the return.

Interaction with other credits The Idaho child tax credit is granted in addition to any federal child tax credit or Idaho food tax credit. However, the credit is nonrefundable—if the amount exceeds the state's income tax liability (after applying other credits), the excess is not refunded or carried over.

Recent legislative changes and sunset status Idaho Code § 63-3029L, as currently amended, sunsets the child tax credit for tax years beginning before January 1, 2026. However, legislation enacted as House Bill H0782 (2026) removes this sunset and makes the credit permanent for tax years beginning on or after January 1, 2026. Practitioners should confirm the effective date and bill status for future years, as law is subject to further amendment.

Part-year resident proration For part-year Idaho residents, the child tax credit must be prorated based on the number of days domiciled in Idaho. The Idaho State Tax Commission confirms that only the portion of the credit allocable to the resident period is allowed.

Summary

• Credit is $205 per qualifying child (nonrefundable).
• Applies to residents and part-year residents, not to nonresidents.
• Qualifying child definition is by reference to IRC § 24(c).
• Prorated for part-year residents.
• Scheduled to become permanent per 2026 legislative enactment; practitioners should monitor for subsequent law changes.

Source: Idaho Code § 63-3029L Source: Idaho State Tax Commission — Child Tax Credit Proration for Part-Year Residents

Idaho allows resident individuals to claim a credit for income taxes paid to another state, including entity-level taxes such as pass-through entity taxes (PTET) and taxes paid on composite returns, if the following conditions are met:

Eligibility for Entity-Level Taxes (PTET, composite)

• The credit is allowed for taxes paid by an S corporation, partnership, limited liability company, estate, or trust to another state, to the extent the tax is attributable to the Idaho resident’s distributive share of the entity’s taxable income in the other state. This expressly includes entity-level income taxes such as PTET adopted by other states since 2018. Idaho Administrative Rule 35.01.01.700 directly addresses entity-level taxes, confirming that a resident individual may claim the credit for their share of tax imposed on and paid by the entity to another state if attributable to the individual’s income.

Composite return and PTET regimes

• If the tax is paid to another state via a composite return filed by the entity (i.e., the entity reports and pays nonresident tax on behalf of its owners) or as an entity-level PTET, the Idaho resident-owner is still eligible for the credit. The amount of credit is limited to the individual’s share of the tax actually paid, and must be properly substantiated.

Documentation and Procedural Requirements

• The Idaho State Tax Commission may require proof of filing, payment, and a statement showing the calculation and attribution of the tax. Acceptable documentation generally includes a copy of the other state’s return, K-1s reflecting the Idaho individual’s share, and evidence of tax paid. Any refund of the state tax paid by the entity will reduce the allowable Idaho credit proportionately.

Key limitations

• The credit can only offset Idaho tax attributable to the double-taxed income; excess credit is not refundable. The credit is not allowed for franchise, gross receipts, net worth, minimum, or alternative taxes unless they are measured solely by and imposed on net income. If the entity receives a refund or separately claims a credit for taxes paid, that amount must be netted against the Idaho resident’s credit claim.

This treatment applies to all tax years after Idaho’s issuance of its explicit administrative guidance confirming credit for PTET and composite taxes (as reflected in rules and instructions in effect as of 2026).

Source: Idaho Admin. Code r. 35.01.01.700 (Rule 700, "Credit for Income Taxes Paid Another State or Territory") Source: Idaho Code § 63-3029 Source: Idaho State Tax Commission – EIS00500 Income Tax Credits Guidance

Idaho sources wage income for nonresidents based strictly on the location where services are performed, with allocation determined by physical workdays in Idaho versus elsewhere. There is no “convenience of the employer” doctrine or telework-specific exception for cross-border remote work.

Idaho compensation percentage—workday allocation method Compensation for personal services performed partly in Idaho and partly in other states (including telecommuting for an Idaho employer from out of state) is Idaho source income to the extent the work is physically carried out in Idaho. Idaho Administrative Code (Rule 270) defines the "Idaho compensation percentage" as the ratio of Idaho workdays to total workdays in the year. An "Idaho workday" is any day the employee physically performs service in Idaho, even if only part of the day is spent in-state. If a taxpayer performs personal services both within and without Idaho on the same day, that day counts as an Idaho workday unless it is established that less than half of the work was performed in Idaho.

No "convenience of the employer" doctrine Idaho does not apply a "convenience of the employer" or similar rule (unlike New York, Pennsylvania, or Delaware). Only days physically worked in Idaho are treated as Idaho source income. Time spent working remotely from another state (even if the employer is based in Idaho) is not considered Idaho source income. Idaho’s guidance distinguishes itself from states with aggressive sourcing doctrines: the sourcing test is entirely physical-presence based.

Examples and application A nonresident employee of an Idaho company who spends 60 days per year working in Idaho and 140 days working in Oregon (remotely) will allocate their wage income by the ratio 60/200, presuming 200 total workdays. Only the portion allocable to Idaho workdays is Idaho source income required to be reported on Idaho Form 43.

Safe harbors or exceptions Idaho law provides no de minimis exception, threshold, or border-state safe harbor for occasional in-state work. Any wage income earned for workdays physically spent in Idaho is Idaho-source and reportable if total Idaho-source income exceeds the nonresident threshold ($2,500 per Idaho Code § 63-3030(a)(2)).

Source: Idaho Admin. Code r. 35.01.01.270 Source: Idaho Code § 63-3026A Source: Idaho State Tax Commission — Sourcing Wage Income for Nonresidents

When Idaho retroactively updates its IRC conformity date—such as through House Bill 559 for the 2025 tax year—the handling of already-filed returns depends on the type of conformity item involved.

Automatic adjustment for the standard deduction: For the 2025 tax year, the Idaho State Tax Commission (STC) programmed its systems to automatically increase the standard deduction claimed on previously filed returns. Taxpayers who already filed for 2025 and took the standard deduction do not need to file an amended return to receive the increased amount: the STC will adjust these returns automatically and either issue an additional refund or reduce the tax due as appropriate. The Commission has stated: "Taxpayers who've already filed their taxes won't need to file amended returns to claim the larger standard deduction."

Amended returns required for other new conformity items: For conformity items other than the standard deduction—such as the enhanced senior deduction and deductions for qualified tips from wages, car loan interest, and overtime compensation—taxpayers must file an amended Idaho return to claim those benefits if their original return did not include them. The Idaho State Tax Commission has specifically announced that it will not automatically adjust previously filed returns to reflect newly allowable deductions (apart from the standard deduction) resulting from retroactive conformity. Updated instructions for Idaho Form 40 and Form 43 clarify how to claim these deductions for the 2025 tax year.

Situations requiring taxpayer action:

• If the taxpayer is eligible for new or expanded conformity deductions other than the standard deduction, they must file an amended Idaho return for 2025 to claim the benefit.
• The STC will not automatically adjust for most new deduction items; taxpayer action is required except for the standard deduction.
• Practitioners should consult the latest STC conformity guidance and return instructions for item-specific procedures, as the agency may issue further guidance.

Summary:

• The Idaho STC will automatically adjust the standard deduction for 2025 returns already filed; no taxpayer action needed for that item.
• For all other new conformity deductions from House Bill 559, taxpayers must file an amended return for 2025 to claim additional benefits.
• This bifurcated process is based on the Idaho STC’s published administrative guidance as of March 2026.

Source: Idaho State Tax Commission – Update on filing 2025 Idaho income taxes now that conformity is law (Feb. 17, 2026) Source: Idaho State Tax Commission – More guidance on conformity deductions and filing 2025 Idaho income taxes (Feb. 20, 2026) Source: Idaho State Tax Commission – File now to get your conformity deductions (March 3, 2026)