Page last updated 06-21-2018
Changes for 2018 Idaho income tax returns
Idaho recently passed a law to follow the Internal Revenue Code for tax year 2018. The law includes additional tax breaks and a new child tax credit. You'll see significant changes to the Idaho income tax return starting with the 2018 return. See the changes listed below.
Adjust your income tax withholding
Due to the new law changes, we encourage you to review your federal Form W-4, Employee's Allowance Certificate, to see if you have the right amount of federal and state income tax withheld from your paycheck. Having too little tax withheld can mean an unexpected tax bill when you file in 2019. Having too much tax withheld can mean less money in your paycheck.
- Use the IRS withholding calculator or the W-4 instructions to see if you need to adjust withholding for your federal taxes. If so, you'll need to fill out a new W-4 to give to your employer.
- Adjust the W-4 to include any changes to Idaho withholding. Even if you have no changes to your federal withholding, you should check to see if you need to change how much tax is withheld for Idaho. Using the federal allowance number for Idaho could cause miscalculations for your Idaho withholding. See our 2018 W-4 Worksheet for Idaho for more information.
Individual income tax return changes:
- The standard deductions have increased:
- Single = $12,000
- Head of Household = $18,000
- Married Filing Jointly = $24,000
- Personal exemptions have been eliminated.
- Dependent exemptions have been eliminated.
- Most itemized deductions have been eliminated or capped.
- Qualifying expenses from a 529 Education Savings account now include K-12 and private schools.
- Idaho has a new nonrefundable Idaho child tax credit of $205 for each qualifying child.
- The individual income tax rate has been reduced by 0.475%. The top rate for individuals is now 6.925%.
Business income tax return changes:
- Miscellaneous business income tax changes have been adopted (see Conformity Page for details).
- The corporate income tax rate has been reduced by 0.475%. The top rate for corporations is now 6.925%.
For more information about the tax law changes for 2017 and 2018, read Idaho Conformity and Tax Reform.
Changes for 2017 Idaho income tax returns
- If you itemize:
- You can claim medical expenses that are higher than 7.5% of your adjusted gross income. (The rate was previously 10%.)
- You can claim mortgage insurance premiums treated as qualified residence insurance.
- If you lose your principal residence due to a foreclosure, you don't have to include any forgiven debt in your taxable income.
- You can claim a deduction for qualified tuition and related expenses. (On Form 40, it's included in your federal adjusted gross income. On Form 43, report on line 22.)
- You must report and pay tax on the repatriation of previously unreported overseas earnings that could apply to 2017. If you file on a water's-edge basis, attach your IRC 965 Transition Tax Statement to your Idaho return.
See the Conformity page for the full list of federal tax breaks extended by Idaho law.
If you already filed your 2017 taxes, check to see if you need to amend your return. If you e-filed, your software package may support e-filing an amended return.