An Overview of Idaho State Taxes

Kelly Hernandez  | 

Several changes have recently been implemented in Idaho’s tax structure. Changes to important tax regulations and rates have caused higher property taxes for residents and a new local sales tax.

Tax increases are confusing and frustrating, so it’s important to understand how these laws affect you as an Idaho resident. If you’re not sure whether you need to file taxes or how much you owe, reviewing new state regulations can help clarify your tax liability.

Idaho Income Tax

In addition to federal income taxes, Idaho residents are also responsible for state income taxes. Idaho follows a graduated income tax rate system, which means the more income you earn, the higher your tax rate.

If you’re a single filer, the following tax rates apply to you:

Taxable Income Earned Taxes and Tax Rate
$0 to $1,541 1.125%
$1,541 to $3,081 $17.33 plus 3.125% of income over $1,541
$3,081 to $4,622 $65.47 plus 3.625% of the income over $3,081
$4,622 to $6,162 $121.32 plus 4.625% of the income over $4,622
$6,162 to $7,703 $192.57 plus 5.625% of the income over $6,162
$7,703 to $11,554 $279.22 plus 6.625% of the income over $7,703
Over $11,554 $534.37 plus 6.925% of the income over $11,554

If you file your taxes jointly with a spouse, the following tax rates apply to you:

Taxable Income Earned Taxes and Tax Rate
$0 to $3,082 1.125%
$3,082 to $6,162 $34.66 plus 3.125% of income over $1,541
$6,162 to $9,244 $130.94 plus 3.625% of the income over $3,081
$9,244 to $12,324 $242.64 plus 4.625% of the income over $4,622
$12,324 to $15,406 $385.14 plus 5.625% of the income over $6,162
$15,406 to $23,108 $558.44 plus 6.625% of the income over $7,703
Over $123,198 $1,068.74 plus 6.925% of the income over $11,554

The income you earn is taxable, except for Social Security income or interest you receive from U.S. government obligations. You can claim a standard deduction or itemized deduction, whichever is greater. The standard deduction for a single filer is $12,200 and for a joint filer, the deduction is $24,400.

Idaho Grocery Credit Refund

You may qualify for a tax credit against the sales tax you paid on grocery purchases throughout the year through the Idaho grocery credit refund. If you don’t make enough income to file a tax return with the state, you can still file for the grocery credit refund.

If you’re 65 and older, file Form 24 to obtain a credit for your groceries. If you’re younger than 65 but still believe you qualify for the credit, submit Form 40 to the Idaho State Tax Commission.

Most Idaho residents qualify for a $100 credit. If you earn a low income, you may also qualify for tax credits on your federal income tax return, such as the earned income tax credit (EITC).

Idaho Sales Taxes

In Idaho, your purchase of goods and certain services are subject to a 6% sales tax. The sales tax applies to any purchase of tangible property, but not real property, which is the property that’s not moveable, such as land. The sales tax also applies if a service, such as computer repair, is performed in exchange for money.

If you make an out-of-state purchase, such as from an online retailer or catalog order, the seller is required to charge you a use tax instead of a sales tax. The use tax is the same rate as the sales tax.

City Sales Tax

Some cities are permitted to impose a local sales tax in addition to the statewide sales tax rate. Resort cities in the state can choose which items are subject to this additional tax. Many choose to only add this tax to the purchase of alcohol, lodging, and food served in restaurants.

Idaho Property Taxes

The property taxes you owe are determined by the assessed value of your owned property and the tax rate set in your district. Your county assessor analyzes your property characteristics to determine its market value. Your taxing district develops a budget for the year, which determines the tax rates for homeowners in the area.

In 2018, the average urban tax rate in Idaho was 1.438% and the average rural tax rate was 0.951%. Property tax bills are mailed out every November and payment is due by December 20.

You can also choose to pay half of your property taxes by December 20 and the other half by June 20 next year. Some counties accept tax payments online, making it quick and convenient to pay your property taxes.

Tax Relief for Homeowners

  • Homeowner’s exemption: If you own and live in your home, you may qualify for a homeowner’s exemption, which exempts 50% of the value of your home and an acre of land from your tax liability for a maximum of $100,000.
  • Property tax reduction program: If you earned a low income, are 65 or older, or meet other program eligibility requirements, your property taxes may be reduced by 50% of your property value.
  • Property tax deferral program: You can defer paying property taxes on your home if your income is less than $45,756 and you agree to pay your full tax bill plus interest at a later date.
  • Disabled veterans program: If you’re a disabled veteran and living in a home you own, you may qualify to reduce the property taxes you pay through this program.

Idaho Estate Taxes

Idaho does not impose an inheritance or gift tax on the transfer of estate ownership. In 2004, the state’s estate tax also expired. However, if you inherited assets from an individual who lived in another state, you may still owe inheritance taxes to that state. A federal estate tax may also apply to the transaction if the estate is worth $11,580,000 or more.

Tips for Filing Taxes in Idaho

Your Idaho income tax return is due on April 15, the same day as your federal return. You can submit your tax return by mail or you can e-file your taxes online for free. The Idaho Taxpayer Access Point (TAP) system allows you to create an account, file and pay taxes, and check the status of your return.

If you have questions about your taxes, need a payment plan, or want to review eligibility guidelines for tax credits, you can contact a local tax office in Idaho. Before you file your taxes or ask for assistance, gather the documents you need, such as your W2, federal return, and identification. After reviewing Idaho tax regulations and how taxes are calculated, you can file your state return with confidence.

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