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Combined Reporting

This guide was created to help businesses understand how to compute their Idaho income tax. It applies to unitary businesses, as explained below, that operate in Idaho and in other states or countries.

Unitary business

If your business is conducted through more than one division or commonly-controlled corporation, it may be considered to be a “unitary business.” A business is unitary if the activities or operations conducted by one division or corporation benefit, or are integrated with, depend on, or contribute to operations conducted by another division or commonly controlled corporation. This connection produces a sharing or exchange of value among the businesses and a significant flow of value to the separate parts. If part of this value flows to or from the business being conducted in Idaho, the separate parts will be considered one unitary business for determining Idaho taxable income and all the incomes of the entities in the unitary business will be added together.

The unitary business principle was first developed in the 1870s when local governments were imposing a property tax on railroads operating within their jurisdictions. The courts during that time recognized that the value of the railroad system was more than the cost of rails and ties located within a particular state. The system connected two distant points and represented an integrated economic unit, of which each state could claim its appropriate share. All of the railroad’s property was valued as a single unit and a portion of the unit’s value was assigned to each state by a mathematical formula. The application of the unitary approach evolved when states started to impose a tax measured by the income of corporations.

There are several tests for determining unity, many developed from court decisions. Some of these are listed in the Laws and Rules section. Idaho applies the unitary business principle to the fullest extent allowed by the U.S. Constitution. This allows Idaho to apportion the business income of a unitary business as long as there is some flow of value with the business conducted in Idaho.

Combined report

We use the terms combined report or combined reporting method to refer to the series of calculations a unitary business uses to determine the amount of business income attributable to each member of the unitary group that is required to file in Idaho. Combined report doesn’t mean the return filed in Idaho, so we’ll use the term combined reporting method throughout this guide.

The combined reporting method can only be used by C corporations. It can’t be used by an S corporation.

Apportionment

We use apportionment to prorate business income or loss to Idaho based on its activities in Idaho compared to its activity everywhere. Single sales factor is the default apportionment method. You can elect to use a three-factor method if you are an electrical corporation, telephone corporation or communications corporation as defined by Idaho Code, or in a special industry defined by the Multistate Tax Commission special industry rules that Idaho adopted. An Idaho factor is computed for each activity. The factors are then used to compute the Idaho apportionment factor, which is applied to the business income of the unitary business to determine the portion earned in Idaho.

Allocation

We use allocation to assign nonapportionable income to the state or other country where it was earned. In some cases this may be a corporation’s commercial domicile, which is the principal place where the taxpayer’s trade or business is directed or managed.

Example

pdf Combined Reporting Example

Voluntary Disclosure Agreement Program

Idaho’s voluntary disclosure agreement (VDA) program helps out-of-state businesses involved in multistate commerce voluntarily resolve problems with tax debt and prior tax filings.

Benefits of participating

  • Possible waiver of some or all penalties.
  • Limit the tax due to an agreed-upon look-back period. The length of the look-back period generally is at least three years. This can vary depending on your business activities and tax owed.
  • The look-back period for voluntary disclosure may be shorter than it would be if the Tax Commission discovered your noncompliance first.

Qualifying for the program

To qualify for a VDA, your business must:

  • Owe more than $500 for the look-back period.
  • Not have had any business locations in Idaho during the look-back period.
  • Not be under current review by the Tax Commission or the Multistate Tax Commission (MTC).

Your business must agree to:

  • Register for all applicable permits.
  • File returns or schedules specified in the agreement.
  • Pay the tax due plus any accrued interest for the look-back period.

Applying for the VDA

To review program requirements or enter your business into the VDA program, go to the pdf Voluntary Disclosure Agreement Application. You don’t have to reveal the name of your company or any information that could readily identify it until we finalize an agreement with you.

Contact us at VoluntaryDisclosure@tax.idaho.gov if you have any questions.

Entering the VDA

We’ll review your application and contact you if it meets the program requirements.

If we accept your application, the next steps are as follows:

  1. We’ll prepare an official agreement for your final approval, and a tax bureau chief will sign it.
  2. We’ll send a copy of the agreement to the company representative listed on your application.
  3. Within 30 days, you must:
    • Sign the agreement.
    • Return the agreement to us with the required tax registration, tax returns, tax schedules, and payment of all tax due. (We’ll calculate and bill interest later.)
  4. After we receive all required materials, we’ll issue an assessment and notify you. Your company must pay the assessment within 30 days. (You must make any payments of $100,000 or more electronically.) We will charge an automatic penalty if we don’t receive your payment within 30 days. Interest also will continue to accrue.

Note: We can withdraw the offer at this stage. We’ll notify your company’s representative if that happens.

Important program information

Your VDA will specify the look-back period and becomes effective only when you or your representative signs it.

  • We won’t assess tax, penalty, or interest for any period before the look-back period if you agree to and comply with the terms of the agreement.
  • If any information in support of the agreement is misrepresented, the Tax Commission can consider the agreement void and assess additional tax, penalty, and interest.
  • If your company has collected tax from customers or withheld tax from employees but hasn’t yet forwarded those taxes to the state, you must send them to us now.

Multi-state voluntary disclosure program

Consider applying for multistate voluntary disclosure through the MTC if your business owes taxes in more than one state. Find out more about the MTC’s Voluntary Disclosure Program.

Pass-Through Entities

Pass-through entities (PTEs) include:

  • Partnerships
  • Limited-liability companies taxed as a partnership or S corporation
  • S corporations
  • Trusts and estates

Income, losses, deductions and credits typically flow through the entity and are taxed at the owner level. Owners should include their share of income or loss on their individual income tax return. The entity can choose to pay the tax for Idaho nonresident individuals on the entity’s composite return. (See Idaho Code section 63-3006C.)

ABE election

Idaho’s affected business entity (ABE) election provides any partnership or S corporation the option of paying its Idaho income tax as a pass-through entity (PTE) at the corporate rate. This election allows each individual or company that’s a member of the partnership or S corporation to receive a credit against what they owe for Idaho income tax.

Key facts to know about ABE:

  • The PTE can make the ABE election for any taxable year by selecting the election’s checkbox on a timely filed original return.* All filing requirements, including extensions, also apply to ABEs.
  • The PTE must make the election each year it wants to file as an ABE.
  • Each ABE must pay any tax due on or before April 15 (calendar-year filers), or the fifteenth day of the fourth month following the close of each taxable year.
  • PTEs making the ABE election can’t take the Idaho capital gains deduction on the sale of Idaho property. ABEs must pass this deduction to owners to take on their individual returns.
  • ABE estimated payments are voluntary payments and don’t qualify for refund interest.
  • An entity with no prior tax return filed in Idaho that’s electing an ABE for the first time must pay 80% of the tax due by the original due date to qualify for an extension.

For more about the ABE election, see federal guidance Notice 2020-75 and Idaho Code section 63-3026B, 63-3033.

 

* The Tax Commission provides an ABE election form. Keep this election form on file for your records; don’t send it to the Tax Commission. Simply filing the income tax return with the ABE checkbox selected is sufficient for making the election.

PTEs, owners, and reporting

The information below defines the reporting requirements for each pass-through owner type, with an emphasis on nonresident individuals. The PTE must include both the following items with its business income tax return:

  • A completed Form PTE-12, Idaho Schedule for Pass-Through Owners
  • A Form ID K-1, Partner’s, Shareholder’s, or Beneficiary’s Share of Idaho Adjustment Credits, for each pass-through owner, regardless of type

Resident and part-year resident individuals

These owners must report the income from the PTE on their Idaho income tax returns. The entity can’t include these owners in a composite filing, and these owners aren’t subject to withholding.

  • Include information for resident and part-year resident individual owners on the Form PTE-12. Enter R in the Filing Code column.
  • Complete Form ID K-1 for each owner. Put the amount of Idaho distributable income on line 34, Column B.

Corporations, partnerships, trusts, and estates or
Nonresident individual owners with Idaho distributable income of less than $1,000

These owners must report the income from the PTE on their Idaho returns if they have other reporting requirements. The entity can’t include these owners in a composite filing, and these owners aren’t subject to withholding.

  • Include the information for corporations, partnerships, trusts, estates, and nonresident individuals with income of less than $1,000 on the Form PTE-12. Enter N in the Filing Code column.
  • Complete Form ID K-1 for each owner. Put the amount of Idaho distributable income on line 34, Column B.

Nonresident individual owners with Idaho distributable income of at least $1,000

A PTE has three options for its nonresident individual owners with Idaho distributable income of at least $1,000:

  • Option #1: Form PTE-NROA, Idaho Nonresident Owner Agreement
  • Option #2: Composite filing
  • Option #3: Withholding
Option #1: Form PTE-NROA

The nonresident individual owner can submit a signed agreement (Form PTE-NROA) to the PTE. This allows the nonresident individual owner to file an Idaho return to report the Idaho-source distributable income from the entity and pay the tax due. The Tax Commission can assess the PTE for the taxes due if the nonresident individual doesn’t file the return and pay the tax due.

If the pass-through entity receives Form PTE-NROA for a nonresident individual owner and approves it, the entity doesn’t include the individual in a composite filing or pay withholding on Form PTE-01, Idaho Income Tax Withheld for an Individual Nonresident Owner of a Pass-through Entity, to the Tax Commission on the owner’s behalf.

  • Include the nonresident individual owner’s information on Form PTE-12. Enter A for Owner Agreement in the Filing Code column.
  • The  Form ID K-1 for nonresident individuals using Form PTE-NROA won’t include tax the entity paid (Part XI, line 57) or withheld (Part V, line 35).
Option #2: Composite filing

Under the composite filing option, the PTE pays the tax for the nonresident individuals on the entity’s return at the corporate tax rate.

  • Include the nonresident individual’s information on Form PTE-12. Enter C for Composite Return Filing in the Filing Code column.
  • Complete Part XI of Form ID K-1 for each nonresident individual owner. Put the amount of tax paid on line 57.
    • The entity also must enter the amount of tax paid on line 57 for each individual owner on its Form PTE-12 under column c. (These amounts must match.)

With this option, the entity return will show a tax due amount. The entity won’t use Form PTE-01 because no withholding payment is being made.

Option #3: Withholding

The PTE pays Idaho income tax withholding calculated at the highest individual tax rate on the nonresident individual’s Idaho source distributable income from the PTE.

  • The PTE submits withholding to the Tax Commission using a Form PTE-01 for each nonresident individual owner.
    • The PTE must pay withholding to the Tax Commission by the 15th day of the fourth month following the end of the tax year.
    • When a PTE has a fiscal year end other than that of the owner, the credit passes through in the same period that the owner reports the income or loss for federal tax purposes.
    • Put the owner’s tax year in the “payment is for tax year” section of the Form PTE-01.
  • Include the nonresident individual’s information on the Form PTE-12. Enter W for Withholding in the Filing Code column.
  • Complete Form ID K-1 for each nonresident individual owner. Put the amount of Idaho distributable income on line 34, Column B.
    • The PTE also must enter the amount of withholding paid for each individual owner on the entity’s Form PTE-12 under column d. (These amounts must match.)

Under this option, the entity return won’t show a tax due amount or any estimated payments. File a Form PTE-01 for each nonresident individual owner the PTE pays withholding on.

Other helpful PTE information

Forms and publications

  • Form ID K-1, Partner’s, Shareholder’s, or Beneficiary’s Share of Idaho Adjustment Credits
  • Form PTE-12, Idaho Schedule for Pass-Through Owners 
  • Form PTE-01, Idaho Income Tax Withheld for an Individual Nonresident Owner of a Pass-Through Entity
  • Form PTE-NROA, Idaho Nonresident Owner Agreement
  • All business income tax forms and publications for the current year

Income Tax for Partnerships

A partnership must file Idaho Form 65 if either of the following are true:

  • You’re doing business in Idaho.
  • You’re a limited-liability company (LLC) treated as a partnership for federal income tax purposes and doing business in Idaho.

Doing business in Idaho includes, but isn’t limited to, the following activities:

  • You own or lease, as a lessor or lessee, any property in Idaho.
  • You solicit business in Idaho.
  • You’re a member of a partnership or S corporation with business in Idaho.
  • You have any Idaho activity from which you receive, realize or derive income.
  • You have an agent — such as a collector, repair person, delivery person, etc. — acting on your behalf in Idaho.
Other business entities

Still not sure if you should file a business income tax return as a partnership? Explore the other business entity types that must file an Idaho tax return:

Tax rates

The Idaho business tax rate is on taxable income. Below is a history of tax rates:

YearIdaho business tax rate is on taxable income
20245.695%
20235.8%
20226%
20216.5%
2018-20206.925%
2012-20177.4%
2001-20117.6%

Tax due for nonresident individual partners

A partnership must pay pass-through withholding on a nonresident individual partner’s income from that partnership. This income includes the individual’s share of income, loss, and deductions.

If a partnership chooses not to withhold, they have two other options:

  • Composite return—the partnership pays the tax for the individual owner on the entity’s return at the corporate rate.
  • Nonresident Owner Agreement—the individual owner can submit a signed agreement (Form PTE-NROA) to the partnership and the partnership doesn’t include the individual in a composite return or pay withholding to the Tax Commission on the owner’s behalf.

Partnerships that pay tax for individual shareholders on a composite return can’t take all the same deductions that Idaho allows on an individual return. For example, partnerships aren’t allowed deductions for carryovers or carrybacks of net operating losses or capital losses.

See additional information, including Form PTE-12 and Form PTE-01, on our Pass‑Through Entities page.

What to file

Include a complete copy of your federal income tax return with your Idaho income tax return.

Assembling your tax return

To make sure your return is correctly processed, include all forms and schedules in the following order:

Find all business income tax forms for the current year

Find business income tax forms for prior years

Amended returns

Use Form 65 to amend your Idaho income tax return. Make sure you check the Amended Return box and enter the reason for amending.

If you amend your federal return, you must file an amended Idaho return. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date the return was filed, whichever is later.

When to file

File your Idaho income tax return on or before the 15th day of the fourth month following the close of your tax year. For a calendar year filer, this is April 15. If the last day for filing a return falls on a Saturday, Sunday, or legal holiday, the return is on time if you file it on the next business day.

Please contact us if you forgot to file a tax return.

Extensions

Learn more on our Valid Extension for Filing page.

Penalties and interest

Learn more on our Penalties and Interest page.

Where to file

E-file your return

The Tax Commission, with the IRS, allows electronic filing of federal and state business income tax returns. To see a list of software companies that provide this service, visit our Filing Business Income Taxes Online page.

Mail your return

See our mailing address information on our Contact Us webpage.

Payments

Visit our E-pay page for more information about electronic payments.

Federal regulations

Idaho follows federal regulations on the following items:

  • Accounting methods and period: Any changes must have prior approval from the IRS. Include a copy of the federal approval with your return.
  • Bonus depreciation for property acquired during 2008 and 2009: Learn more on our Bonus Depreciation page.
  • Check-the-box regulations: If an entity is classified or taxed as a partnership for federal income tax purposes, it’s treated as a partnership for Idaho income tax purposes.

Federal audit

If your federal taxable income or tax credits change because of a federal audit, you must send written notice to the Tax Commission within 120 days of the final federal determination (see Rule 890). Include copies of all IRS schedules.

  • If you owe more Idaho tax and don’t send the written notice within 120 days, we will apply a 5% penalty and charge interest on the tax due.
  • If you’re owed an Idaho refund, you must file an amended Idaho income tax return to get the refund. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date you filed the return, whichever is later. If the statute-of-limitations period has ended, you have one year from the date of the final determination to file for the refund.

Net operating loss (NOL)

Idaho doesn’t allow a partnership to take a deduction for an NOL carryback or carryforward. The partnership must pass the loss through to the partners so they can take the deduction on their individual income tax returns. If a partnership elects to be an Affected Business Entity, it is allowed to claim an NOL. (See the Pass‑Through Entities page).

Keeping records

Keep copies of your tax returns and all supporting documents for at least seven years. Visit the IRS website for more information about record keeping.

Laws and rules

Learn more about Idaho business income tax:

Income Tax for S Corporations

A corporation filing as an S corporation for federal income tax purposes must file Idaho Form 41S if either of the following are true:

  • You’re doing business in Idaho.
  • You’re registered with the Idaho Secretary of State to do business in Idaho.

Idaho accepts the federal approval of the S corporation election. Include a copy of the federal approval or a federal Form 2553 with your Form 41S the first year you file.

Doing business in Idaho includes, but isn’t limited to, the following activities:

  • You own or lease, as a lessor or lessee, any property in Idaho.
  • You solicit business in Idaho.
  • You’re a member of a partnership or S corporation with business in Idaho.
  • You have any Idaho activity from which you receive, realize or derive income.
  • You have an agent — such as a collector, repair person, or delivery person — acting on your behalf in Idaho.

Exemptions

An S corporation under the protection of Public Law 86‑272 is exempt from filing an Idaho income tax return.

Other business entities

Still not sure if you should file a business income tax return as a corporation? Explore the other business entity types that must file an Idaho tax return:

Tax rates

The Idaho business tax rate is on taxable income. Below is a history of tax rates:

YearIdaho business tax rate is on taxable income
20245.695%
20235.8%
20226%
20216.5%
2018-20206.925%
2012-20177.4%
2001-20117.6%

Tax due for nonresident individual shareholders

An S corporation is required to pay pass-through withholding on a nonresident individual shareholder’s income from that S corporation. This income includes wages, salaries, any other compensation, and the individual’s share of income, loss or deductions.

If an S corporation chooses not to withhold, they have two other options:

  • Composite return—the S corporation pays the tax for the individual owner on the entity’s return at the corporate rate.
  • Nonresident Owner Agreement—the individual owner can submit a signed agreement (Form PTE-NROA) to the S corporation and the S corporation doesn’t include the individual in a composite return or pay withholding to the Tax Commission on the owner’s behalf.

S corporations that pay tax for individual shareholders on a composite return can’t take all the same deductions that Idaho allows on an individual return. For example, S corporations aren’t allowed deductions for carryovers or carrybacks of net operating losses, capital losses, or personal exemptions.

These provisions apply to an S corporation that’s doing business in Idaho.

See additional information, including Forms PTE-12 and PTE-01, on our Pass‑through Entity page.

What to file

Include a complete copy of your federal income tax return with your Idaho business income tax return.

Assembling your tax return

To make sure your return is correctly processed, include all forms and schedules in the following order:

Find all business income tax forms for the current year

Find business income tax forms for prior years

Amended returns

Use Form 41S to amend your Idaho income tax return. Make sure you check the Amended Return box and enter the reason for amending.

If you amend your federal return, you also must file an amended Idaho income tax return. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date you filed the return, whichever is later.

When to file

File your Idaho income tax return on or before the 15th day of the fourth month following the close of your tax year. For a calendar year filer, this is April 15. If the last day for filing a return falls on a Saturday, Sunday, or legal holiday, the return is on time if you file it on the next business day.

Please contact us if you forgot to file a tax return.

Extensions

Learn more on our Valid Extension for Filing page.

Penalties and interest

Learn more on our Penalties and Interest page.

Where to file

E-file your return

The Tax Commission, with the IRS, allows electronic filing of federal and state business income tax returns. To see a list of software companies that provide this service, visit our Filing Business Income Taxes Online page.

Mail your return

See our mailing address information on our Contact Us webpage.

Payments

Visit our E-pay page for more information about electronic payments.

Federal regulations

Idaho follows federal regulations on the following items:

  • Accounting methods and period: Any changes must have prior approval from the IRS. Include a copy of the federal approval with your return.
  • Bonus depreciation for property acquired during 2008 and 2009: Learn more on our Bonus Depreciation page.
  • Check-the-box regulations: If an entity is classified or taxed as a corporation for federal income tax purposes, it’s treated as a corporation for Idaho income tax purposes.
  • Disregarded entities: If an entity is classified as a disregarded entity for federal tax purposes, it’s treated as a disregarded entity for Idaho income tax purposes. Your return must have a schedule listing the names and federal identification numbers of disregarded entities included in your return. This is separate from the Idaho Form 41A. The total of the apportionment attributes of the disregarded entity is included in the owner’s Idaho apportionment factor.
  • Qualified Subchapter S Subsidiaries (QSSS): Idaho treats a QSSS in the same manner as the IRS. The total of the apportionment attributes of the QSSS is included in the parent S corporation’s Idaho apportionment factor.

Federal audit

If your federal taxable income or tax credits change because of a federal audit, you must send written notice to the Tax Commission within 120 days of the final federal determination (see Rule 890). Include copies of all IRS schedules.

  • If you owe more Idaho tax and don’t send the written notice within 120 days, we will apply a 5% penalty and charge interest on the tax due.
  • If you’re owed an Idaho refund, you must file an amended Idaho income tax return to get the refund. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date you filed the return, whichever is later. If the statute-of-limitations period has ended, you have one year from the date of the final determination to file for the refund.

Net operating loss (NOL)

Idaho doesn’t allow an S corporation to take a deduction for an NOL carryback or carryforward. The S corporation must pass the loss through to the shareholders so they can take the deduction on their individual income tax return. If a partnership elects to be an Affected Business Entity, it is allowed to claim an NOL. (See the Pass‑Through Entities page).

Combined reporting

Visit our Combined Reporting page.

Related documents

Visit the Income Tax Hub for links to related guides.

Keeping records

Keep copies of your tax returns and all supporting documents for at least seven years. Visit the IRS website for more information about record keeping.

Laws and rules

Learn more about Idaho business income tax:

Income Tax for Corporations

Definition

You must file income tax returns for your corporation if any of the following are true:

  • You’re doing business in Idaho.
  • You’re registered with the Idaho Secretary of State to do business in Idaho.
  • You have income attributable to Idaho.

Doing business in Idaho includes, but isn’t limited to, the following activities:

  • You own or lease, as a lessor or lessee, any property in Idaho.
  • You solicit business in Idaho.
  • You’re a member of a partnership or S corporation with business in Idaho.
  • You have any Idaho activity from which you receive, realize or derive income.
  • You have an agent — such as a collector, repair person, or delivery person — acting on your behalf in Idaho.

Exemptions

A corporation under the protection of Public Law 86‑272 is exempt from filing an Idaho income tax return.

Examples of corporations

The following are examples of corporations that must file a business income tax return:

  • A corporation subject to the income or franchise tax
  • A corporation in business solely to perform contracts with the U.S. Department of Energy at the Idaho National Laboratory. This corporation is subject to the Idaho franchise tax.
  • A common law trust treated as a corporation for federal income tax purposes
  • A cooperative bank without capital stock operated for mutual purposes and without profit
  • A domestic building and loan association
  • A domestic savings and loan association
  • A federal savings and loan association with substantially all the business confined to making loans to members
  • A homeowners’ association
  • An inactive or name-holder corporation
  • A limited-liability company treated as a corporation for federal income tax purposes
  • A mutual savings bank that doesn’t have capital stock represented by shares
  • A nonproductive mining corporation
  • A nonprofit organization that receives unrelated business income, as defined in the Internal Revenue Code (IRC). If you don’t receive unrelated business income, you aren’t required to file an Idaho corporate income tax return. However, if you file a federal Form 990, you may send a copy to the Tax Commission
  • A publicly traded partnership treated as a corporation under IRC Section 7704
  • A real estate investment trust (REIT)
  • A regulated investment company (RIC)
  • A receiver, trustee in dissolution, trustee in bankruptcy, or assignee who possesses or holds title to all or substantially all the property or business of a corporation, even if the property or business isn’t being operated

Other business entities

Still not sure if you should file a business income tax return as a corporation? Explore the other business entity types that must file an Idaho tax return:

Tax rates

Visit the Business Income Tax Rate page for the current Idaho business income tax rate.

Idaho imposes the franchise tax on a corporation for the privilege of doing business in Idaho. This includes a corporation in business solely to perform contracts with the U.S. Department of Energy at the Idaho National Laboratory. See Idaho Code section 63‑3025A. The franchise tax rate is the same as the business income tax rate.

Corporations aren’t subject to both the franchise tax and the income tax.

What to file

Include a complete copy of your federal income tax return with your Idaho business income tax return.

Assembling your tax return

To make sure your return is correctly processed, include all forms and schedules in the following order:

Find all business income tax forms for the current year

Find business income tax forms for prior years

Amended returns

Use Form 41 to amend your Idaho income tax return. Make sure you check the Amended Return box and enter the reason for amending.

If you amend your federal return, you also must file an amended Idaho income tax return. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date you filed the return, whichever is later.

When to file

File your Idaho income tax return on or before the 15th day of the fourth month following the close of your tax year. For a calendar year filer, this is April 15. If the last day for filing a return falls on a Saturday, Sunday, or legal holiday, the return is on time if you file it on the next business day.

Please contact us if you forgot to file a tax return.

Extensions

Learn more on our Valid Extension for Filing page.

Penalties and interest

Learn more on our Penalties and Interest page.

Where to file

E-file your return

The Tax Commission, with the IRS, allows electronic filing of federal and state business income tax returns. To see a list of software companies that provide this service, visit our Filing Business Income Taxes Online page.

Mail your return

See our mailing address information on our Contact Us webpage.

Payments

Visit our E-pay page for more information about electronic payments.

Estimated payments

You don’t have to make estimated payments the first year your corporation is in Idaho. After that, you must make estimated payments if both of these apply:

  • Your corporation must make federal estimated payments.
  • Your corporation’s estimated Idaho tax liability is $500 or more.

Use Form 41ES to determine the estimated payment amount.

  • You can make the estimated payment electronically using the Quick Pay option on our website. For more information, visit our E‑pay page at tax.idaho.gov/epay.
  • You can make the estimated payment with a check using the voucher at the bottom of Form 41ES.

Use Form 41ESR if you underpaid estimated taxes during the year. Include it with Form 41 when you file.

Federal regulations

Idaho follows federal regulations on the following items:

  • Accounting methods and period: Any changes must have prior approval from the IRS. Include a copy of the federal approval with your return.
  • Bonus depreciation for property acquired during 2008 and 2009: Learn more on our Bonus Depreciation page.
  • Check-the-box regulations: If an entity is classified or taxed as a corporation for federal income tax purposes, it’s treated as a corporation for Idaho income tax purposes.
  • Disregarded entities: If an entity is classified as a disregarded entity for federal tax purposes, it’s treated as a disregarded entity for Idaho income tax purposes. Your return must have a schedule listing the names and federal identification numbers of disregarded entities included in your return. This is separate from the Idaho Form 41A. The total of the apportionment attributes of the disregarded entity is included in the owner’s Idaho apportionment factor.

Federal audit

If your federal taxable income or tax credits change because of a federal audit, you must send written notice to the Tax Commission within 120 days of the final federal determination (see Rule 890). Include copies of all IRS schedules.

  • If you owe more Idaho tax and don’t send the written notice within 120 days, we will apply a 5% penalty and charge interest on the tax due.
  • If you’re owed an Idaho refund, you must file an amended Idaho income tax return to get the refund. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date you filed the return, whichever is later. If the statute-of-limitations period has ended, you have one year from the date of the final determination to file for the refund.

Net operating loss (NOL)

An NOL occurs when the amount of Idaho taxable income, after making modifications, is less than zero. You can’t subtract the NOL if the corporation wasn’t doing business in Idaho.

Idaho calculates the Idaho NOL differently than the IRS calculates the federal NOL. So, you always must add back the NOL claimed on your federal income tax return.

You can use an NOL by deducting it from your income in another year or years. Include pdf Form 56 or your own schedule with your Idaho return for any year you carry the NOL to.

VIDEO: Idaho NOL: 5 most common mistakes

Combined reporting

Visit our Combined Reporting page.

Keeping records

Keep copies of your tax returns and all supporting documents for at least seven years. Visit the IRS website for more information about record keeping.

Businesses exercising the option to carryback or carry forward need to keep records for all affected years.

Laws and rules

Learn more about Idaho business income tax:

Business Income Tax Basics Guide

You must file income tax returns for your business entity if any of the following are true:

  • You’re transacting business in Idaho.
  • You’re registered with the Idaho Secretary of State to do business in Idaho.
  • You have income attributable to Idaho.
  • You’re a fiduciary.

Transacting business in Idaho is indicated by, but not limited to, the following activities:

  • You own or lease, as lessor or lessee, any property in Idaho.
  • You solicit business in Idaho.
  • You are a member of a partnership or S corporation with business in Idaho.
  • You have any Idaho activity from which you receive, realize or derive income.
  • You have an agent — such as a collector, repair person, or delivery person — acting on your behalf in Idaho.

Business Income Tax Rate

Rates

The Idaho business tax rate is on taxable income. Below is a history of tax rates:

YearIdaho business tax rate is on taxable income
20245.695%
20235.8%
20226%
20216.5%
2018-20206.925%
2012-20177.4%
2001-20117.6%

Permanent Building Fund (PBF) tax

Most businesses must pay the $10 PBF tax. These businesses include:

  • C corporations must pay the $10 tax.
  • Unitary group of corporations must pay $10 for each corporation required to file in Idaho, whether the corporations file individually or the unitary group includes them in a group return.
  • S corporations must pay $10 for each shareholder for whom it pays the Idaho income tax due.
  • Partnerships must pay $10 for each partner for whom it pays the Idaho income tax due.
  • Estates and trusts must pay $10 for each beneficiary for whom it pays the Idaho income tax due.

See Idaho Code section 63-3082.

Business Entities

Review these resources for more in-depth information:



Business Income Tax Filing

Due date

File your return and pay any tax on or before the 15th day of the fourth month following the close of your tax year.

  • For a calendar year filer, this is April 15.
  • If the last day for filing a return falls on a Saturday, Sunday, or legal holiday, the return is on time if you file it on the next business day.

Please contact us if you forgot to file a tax return.

E-File

The Tax Commission, with the IRS, provides electronic filing of federal and state corporation income tax returns.

These software companies provide electronic filing of business income tax forms 

Find forms

Find all Idaho business income tax forms here 

Form ID K-1

Use Form ID K-1 to provide the partner, shareholder, or beneficiary of a pass-through entity with information required to complete the pass-through owner’s Idaho income tax return.

Learn more about Form ID K-1 

Bonus Depreciation

Depreciation is a federal income tax deduction that lets a taxpayer recover the cost of capital expenditures over time. Read our guide on bonus depreciation.

Idaho NOL: 5 most common mistakes

This video applies to NOLs through tax year 2018.

Learn the five most common mistakes seen on individual returns claiming an Idaho net operating loss.

Combined reporting

Visit our Combined Reporting page.

Extension

Need more time to file? See if you qualify. Read our guide on valid extensions for filing.

Business Income Tax Paying

Payment options

You can pay your business income tax in one of three ways:

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. Read our guide on valid extensions for filing.