- Idaho resident: Taxed on income from all sources.
- Part-year Idaho resident: Taxed on income received while an Idaho resident.
- Idaho nonresident: Taxed on Idaho source income.
- Tax is also due on Idaho source income received any time during the year while not residing or domiciled in Idaho.
Idaho source income defined
Idaho source income is income from either of these:
- Transactions or activities that take place in Idaho
- Property in Idaho
Idaho compensation
Compensation is income from wages and salary and other amounts your employer pays you for the services you perform. Compensation for services performed in Idaho is Idaho source income. If you:
- Work only in Idaho during the year: All your compensation is Idaho compensation.
- Work only outside Idaho during the year: You have no Idaho compensation.
Note: All compensation received while you’re domiciled or residing in Idaho is taxable by Idaho. Learn more about Idaho Residency Status. - Work both in and outside Idaho during the year: You or your employer must compute an Idaho compensation percentage. You can then calculate your Idaho compensation from that job.
Your W-2 form should show your compensation from Idaho and any other states.
To compute your Idaho compensation, divide Idaho work days by total work days
- Work days include only those days you provided personal services for your employer. Don’t include any days off when you didn’t provide personal services for your employer (e.g., holidays, vacation).
- Idaho work days are the total days you worked in Idaho for a particular employer during the year.
- Total work days are the total days you worked for that employer both in and outside Idaho during the year.
Tip: Generally, if you work a five-day work week all year, you’ll have 260 total work days. Subtract any vacation, holidays, sick leave days, and other days you take off.
Jake lives in Washington and worked only for XYZ Company during the year. He worked in Idaho from January through October. He worked in Washington from November through December. XYZ Company paid him $40,000 for the year. Jake computes his Idaho compensation percentage and Idaho compensation as follows:
- Idaho work days = 220 days less 6 holidays,
2 sick days, and 10 vacation days = 202 - Total work days = 260 days less 9 holidays,
4 sick days, and 15 vacation days = 232 - Idaho compensation percentage
= 202 Idaho work days/232 total work days = 87% - 87% x $40,000 (compensation from XYZ Co. for the year)
= Idaho compensation of $34,800
If Jake had more than one employer:
He should make a calculation for each employer if he worked in and outside Idaho for other employers.
Special rules apply in computing compensation from stock options and severance pay.