Affected Business Entity Payment of Business Income Tax

Tax Update for Summer 2024

Welcome to the Summer 2024 Tax Update business community newsletter. This edition features articles about new tax laws, lower credit card and e-check payment fees, expanded call center hours, our free educational webinars, and Taxpayer Access Point (TAP) guidance.

New tax laws – What you need to know

The 2024 Idaho Legislature passed tax laws that lowered income tax rates, increased school facilities funding, clarified sales tax exemptions for structures and equipment used to store small grains, and more. For additional details about the legislation highlighted in this newsletter, visit the link to each bill below.

Income tax

Idaho conforms to the Internal Revenue Code for 2024

Idaho conforms to the Internal Revenue Code (IRC) as of January 1, 2024, with the following exception:

IRC section 85, Unemployment Compensation, is applied as in effect on January 1, 2020.

House Bill 385 – Effective January 1, 2024

Changes to Idaho’s tax rate

Idaho’s tax rate is now 5.695% for all taxpayers. For individuals, the rate applies to taxable income over:

$2,500 if you’re filing single
$5,000 if you’re filing jointly

The base amounts of $2,500 and $5,000 are indexed for inflation. Since 1998, the Tax Commission has adjusted the income tax thresholds each year to account for inflation.

House Bill 521 – Effective January 1, 2024

Income earned on an American Indian reservation

Income earned by a nonresident who’s a registered member of an American Indian tribe isn’t subject to Idaho taxes when the member works on an Idaho Indian reservation. Income the member earns in Idaho outside a reservation is subject to Idaho taxes.

Note: This isn’t a new policy; it codifies the state’s understanding of existing federal law.

House Bill 410 – Effective January 1, 2024

Deduction/credit burden of proof

Evidence that shows a taxpayer’s right to claim a tax deduction or credit includes a credit card statement (or other document from a financial institution) along with a notarized, sworn statement that an expenditure was for an identified deduction purpose.

House Bill 488 – Effective July 1, 2024

Property tax

Homestead exemption penalties

Taxpayers claiming more than one homestead exemption for property tax are subject to a penalty. The first violation is a financial penalty; subsequent violations are misdemeanors.

The Tax Commission may share information with the Secretary of State to determine that a taxpayer is voting or running for office based only on the location of their primary residence.

House Bill 449 – Effective July 1, 2024

Sales tax

Grain bin exemption

The structures and equipment used to store small grains are exempt from sales taxes. These items include: grain bin structures, augers, dryers, fans, sweep augers, and other equipment and supplies used in quality control functions to prepare a crop for storage in a grain bin.

House Bill 751 – Effective January 1, 2024

School facilities funding

This law increases funding from existing sales tax revenue for school facilities projects.

House Bill 521 – Effective July 1, 2024

Other

Cash payments to state agencies

Cash is an acceptable payment method in Idaho state government. Any official, department, board, commission, or agency that accepts payments must accept cash without charging a fee.

Note: The Tax Commission has always accepted cash and has never charged fees for cash payments.

House Bill 417 – Effective July 1, 2024

Interest charged on tax deficiencies

The law changes how interest accrues during an audit.

House Bill 445 – Effective January 1, 2024

Lower credit card and e-check fees

E-payments are a convenient way to make tax payments and are now more cost-effective. As of May 1, 2024, processing fees are lower for e-checks, credit cards, and debit cards. The e-check fee is now $1, down from $5. The debit and credit card fees dropped from 3% to 2.5%. To learn more about e-payments or to make a payment, go to tax.idaho.gov/e-pay.

Expanded call center hours

We’ve expanded our call center hours in our ongoing efforts to provide excellent customer service. The new hours are 8 a.m. to 5:30 p.m. Mountain Time (7 a.m. to 4:30 p.m. Pacific Time) Monday through Friday.

For general tax questions, call (208) 334-7660 in the Boise area or toll free at (800) 972-7660. Deaf and hard of hearing callers can call the Idaho Relay Service at (800) 377-3529. We close the call center for training on the 2nd and 4th Wednesdays of the month from 8 a.m. to 9:30 a.m. Mountain Time.

We’re committed to protecting you. We’ll share your sensitive information only with you or your legal representative. So, we’ll ask for information to verify your identity when you call us.

Free tax and business webinars

Did you know the Idaho State Tax Commission offers free webinars on various tax-related topics? If you’re self-employed, a bookkeeper seeking guidance, or a new business owner looking for information about tax permits, we can help.

Join our free webinars to learn about these topics and more:

Tax and business basics for small businesses.
Tax and business basics for self-employed.
Taxpayer Access Point (TAP) tips and tricks. (1 hour)
The Idaho Business Registration (IBR) process for business permits. (1 hour)
NEW: Open question-and-answer forum for business and tax-related questions with our experts. (1 hour)

Check out the events calendar on our website to see the webinar schedule. For more information and to sign up for a webinar, visit the Tax Commission’s Eventbrite page.

Taxpayer Access Point (TAP) guidance

Taxpayer Access Point (TAP) is a free, secure online platform for taxpayers who frequently file Idaho tax returns and make payments on certain tax types. Businesses are the primary users of TAP.

Why you should get a TAP account

Using TAP allows your business to electronically file returns for most permit-based taxes, make online payments, get tax due-date reminders, and schedule tax payments up to 90 days in advance. You can also print copies of filed returns, print certain letters we send you, and view your account history. You can’t e-file income tax returns through TAP.

Services that don’t require a TAP account.

You don’t need a TAP account to:

Get the status of your income tax refund
Verify your identity
Pay through the Quick Pay tool
Respond to our inquiry letters
Request a Payment Plan (if you’ve received a letter from us in the past two years)
Apply for property tax relief
Request a temporary seller’s permit and register for an upcoming event

How do I get a TAP account?

Follow these instructions to register for a TAP account. The registration and approval process takes about 10 to 12 days.

Before registering for a TAP account, you’ll need a tax account with the Tax Commission. If you’re a business that wants to file and pay taxes through TAP, you first need a permit (account) for that tax type. If you’re new to Idaho, you must wait until we’ve received and processed your first income tax return before you register.

Learn more about TAP with our self-help tools in TAP Help.

Watch our videos, follow us on social media

Can I request a payment plan? What are estimated payments? How do I get copies of my tax records? Find those answers and more when you watch our videos.

Subscribe to idahostatetax on YouTube to see the latest videos or check out our recorded webinars.

You can also follow idahotax on Facebook, Instagram, Twitter, and LinkedIn.

Stay informed

Nonprofit Guides

Nonprofits and
Income Tax

Nonprofits and
Sales Tax

Individual Income Tax Filing and Paying

You must file individual income tax returns with Idaho if you're any of the following:

An Idaho resident
A part-year Idaho resident with income from Idaho sources or income earned while an Idaho resident
A nonresident of Idaho with income from Idaho sources

The only exception is if you make less than a certain amount. See Income requirement for filing.

Due date

File your return and pay any tax due on or before April 15, 2025, for the 2024 calendar year. Please contact us if you forgot to file a tax return.

Filing

You can choose to file electronically, saving time and postage. If you decide to e-file both your federal and state returns, you must use the same tax software to do so.

These tax software packages enable you to prepare and electronically file your federal and Idaho individual income tax forms for free if you meet certain criteria.
Here are other tax software packages that you can use: E-file Income Taxes.
Taxpayer Access Point (TAP) doesn’t support electronic filing of income tax returns.

If you don’t qualify for free filing, or don’t want to use tax software:

Extension

A valid extension means you can avoid a penalty for filing late. There aren’t any extensions allowing you to pay late. You’ll owe interest on any payments made after the original due date. Need more time to file? See if you qualify. Read our guide on valid extensions for filing.

Paying

You can pay income tax you owe in one of these ways:

Pay securely online from your bank account (free) or using a credit card (fee) through Quick Pay.
Pay from your bank account (free) or using a credit card (fee) through TAP, if you have a TAP account. (You can’t file income tax returns in TAP.)
Pay by check through the mail or in person. If you’re mailing a payment without its return, complete and attach this form: Form ID-VP – Income Tax Voucher Payment.
Pay in person — including with cash — at one of our locations.

If you can’t pay what’s due

We always recommend paying the total amount by the due date if you can. Paying in full prevents your owing interest and possibly a penalty. If you can’t pay in full by the due date:

File as soon as possible.
See if you can request a payment plan.
Pay what you can before the due date to reduce the interest you’ll owe. An easy way to make one-off payments from your bank account is through the ACH debit option in Quick Pay. (See other payment methods on the E-pay page.)
Check and change your income tax withholding with your employer to reduce or eliminate what you’ll owe next year.

Refunds

For information about your refund, see the Tax Refund page.

Amended returns

Double-check your tax return for accuracy before you mail it or submit it through an online e-filing service. You can correct a return you’ve already filed by filing an amended return. Please note that amended returns are processed after all original returns have been processed. Expect delays.

To amend a return, follow these steps:

Check which return you originally filed – Form 40 or Form 43. Download a blank copy.
Check the AMENDED box at the top of the blank return.
Complete the return as it should have been filled out.
Attach an explanation of why you’re amending the return.
If you need to, include copies of forms or schedules missing from the original filing.
If you amended your federal return, attach a copy of Form 1040X.
Mail your amended return, any supporting documentation, and any payment due to: Idaho State Tax Commission, PO Box 56, Boise ID 83756-0056.

Idaho Retirement Benefits Deduction

Idaho allows limited deductions for certain pensions. Even if you qualify, you generally can’t deduct the full amount or your benefits. Each year the state recalculates the maximum allowed.

For more information beyond this page, see the instructions for individual income tax, Part B – Subtractions. Look for the subsection for Retirement Benefits Deduction for Qualified Retirement Benefits. This subsection also includes definitions, such as what “disabled” means.

Federal pensions and the deduction

Some federal pensions might qualify for the deduction from Idaho income tax. You as the pensioner might qualify if all of these are true:

You’re at least 65, or at least 62 and disabled.
You’re filing jointly if you’re married.
Your pension is one of these:
- From the U.S. military.
- Under the Foreign Service Retirement and Disability System (FSRDS).
- Under the Civil Service Retirement System (CSRS). See the instructions to determine if your pension is from CSRS (not the Federal Employees Retirement System, or FERS).

Surviving spouse benefits: You might qualify for the deduction if you receive your deceased spouse’s federal pension from one of the sources listed above. You can’t have remarried, and you must be at least 65, or at least 62 and disabled.

Idaho pensions and the deduction

Only a very few Idaho pensions qualify for the deduction from Idaho income tax. You as the pensioner might qualify if all of these are true:

You’re at least 65, or at least 62 and disabled.
You’re filing jointly if you’re married.
Your pension is one of these:
- From the Firefighters Retirement Fund (FRF) that the Public Employee Retirement System of Idaho (PERSI) administers.
- Benefits for a retired police officer of an Idaho city for Idaho employment not included in the federal Social Security retirement system. PERSI administers the benefits.
- Benefits from a policemen’s retirement fund for retired police officers of an Idaho city. The fund must no longer admit new members as of January 1, 2012. An Idaho city or PERSI must administer the fund.

See the instructions or contact your plan administrator if you have questions about qualifying.

Surviving spouse benefits: You might qualify for the deduction if you receive your deceased spouse’s Idaho pension from one of the sources listed above. You can’t have remarried, and you must be at least 65, or at least 62 and disabled.

Tax Update for Summer 2023

Welcome to the Summer 2023 issue of Tax Update — our business community newsletter. This edition features articles about new tax laws, taxable sales for recreation and admissions, and our new callback feature.

New tax laws – What you need to know

The 2023 Idaho Legislature passed tax laws providing property tax reduction, capping the cigar tax, increasing the dependent care tax deduction, and more. Below are some highlights. For more details about the legislation, visit the Legislature’s website.