Idaho State Tax Commission

New law changes what pandemic-related income is taxable

A new law has changed what pandemic income is taxable by Idaho. Idaho House Bill 251 makes some one-time federal relief money provided to Idaho businesses in 2020 nontaxable.  

This includes:

  • Rebound Idaho grants for small businesses and the self-employed
  • Paycheck Protection Program (PPP) loans that are forgiven
  • Economic Disaster Loan (EIDL) advance funds 

The law also makes emergency rental assistance program funds taxable by Idaho. If you received those funds, you need to include them as income on your Idaho tax return.

As a reminder, here’s what’s taxable and what isn’t for 2020 income tax returns:

2020 TAXABLE INCOME

  • Idaho unemployment insurance benefits
  • Pandemic Unemployment Assistance (PUA) for self-employed workers, independent contractors, and gig workers
  • Idaho’s Return-to-Work bonuses for employees who were idled as a result of the pandemic and who returned to work from April 20 through July 15, 2020
  • Emergency rental assistance program funds

2020 INCOME THAT’S NOT TAXABLE

  • Federal economic “stimulus” payments 
  • Rebound Idaho grants for small businesses and the self-employed
  • Paycheck Protection Program (PPP) loans 
  • Idaho’s Strong Families Strong Students grants
  • Economic Disaster Loan (EIDL) advance funds 

REPORTING UNEMPLOYMENT BENEFITS, REBOUND IDAHO GRANTS

Idaho unemployment insurance benefits should be included in Idaho income when filing 2020 Idaho income tax returns. Any unemployment benefits deducted on federal Form 1040, Schedule 1, line 8, should be added back to the Idaho return as follows: 

  • If filing Form 40, report the income on Form 39R, Part A, line 6, “Other Additions.” 
  • If filing Form 43, don’t include the federal unemployment insurance exclusion on line 19, “Other Income.” Report the exclusion amount on Form 39NR, Part A, line 4, Column A, “Other Additions.”

Rebound Idaho grants are taxable by the federal government but not by Idaho. To deduct them from Idaho income, use Form 39R, Part B, line 23, “Other Subtractions.”

IF YOU OWE TAXES

If Idaho income tax wasn’t withheld when you received the taxable income, you may owe more tax than expected or have a smaller-than-expected refund.  

If you owe taxes, you can pay them online using the free Quick Pay service at tax.idaho.gov/quickpay. It’s a great option if you want to spread out payments for your income taxes between now and the April 15 due date. Some e-file providers also offer a direct debit payment option. 

If you need a payment plan, sign up for a Taxpayer Access Point (TAP) account. If you qualify, you can request a plan through TAP after your return is processed. 

Please contact your financial or tax advisor with any questions about your 2020 taxable income. 

For other questions: 

  • Call us at (208) 334-7660 in the Boise area or toll free at (800) 972-7660.
  • Email us at taxrep@tax.idaho.gov.

 

Posted 03-22-2021
tax pros general

This information is for general guidance only. Tax laws are complex and change regularly. We can't cover every circumstance in our guides. This guidance may not apply to your situation. Please contact us with any questions. We work to provide current and accurate information. But some information could have technical inaccuracies or typographical errors. If there's a conflict between current tax law and this information, current tax law will govern.