Affected Business Entity Election 2023

Federal forms

You need to file some of these with Idaho.

Form W-2

Use the W-2 form to report an employee’s income and amounts you withheld for a specific year.

The form must be complete, correct, and legible.

We compare the W-2 information you submit with the W-2s your employees filed. Errors can delay employees’ tax returns or slow the processing of your annual withholding reconciliation.

Tips

Complete all required fields.
Use the EIN that the IRS issued to you. Note: If you’re a service provider, use the EINs the IRS issued to your clients.
Use the Idaho state account number (9-digit number) that we issued to you.
Make sure all W-2 copies are legible.
Use the correct W-2 for the reporting year.
File Form 967 with your W-2s and 1099s.
Don’t send us a paper copy of W-2s if you file them online.

Use this chart, “Sample Form W-2,” to complete the Idaho withholding information. See the IRS website for complete information.

Corrected forms

You must issue employees a corrected W-2 using Form W-2c if you issued them an incorrect W-2. Send copies of the W-2c to all federal, state, and local agencies that you sent the original W-2 to.

Form W-3

The Form W-3, Transmittal of Wage and Tax Statements, is for IRS use only. You can’t use it in place of Idaho’s Form 967, Idaho Annual Withholding Report.

Form W-4 and Form ID W-4

You don’t have to send federal Form W-4s or Idaho Form ID W-4s to the Tax Commission.

Suspected incorrect number of allowances

Send a copy of the form of any employee you suspect is claiming the incorrect number of allowances. Mail it to: TDB/Withholding, Idaho State Tax Commission, PO Box 36, Boise ID 83722-0410.

Separate Idaho Form ID W-4

Encourage employees to complete a federal Form W-4 as well as an Idaho Form ID W-4. Read more at tax.idaho.gov/w4.

Information returns (1099s, 1098, W-2G)

Information returns are tax statements you use to report certain types of payments and activities to the IRS. You must also file the following IRS information returns with the Tax Commission in certain circumstances. File:

Form 1099-MISC, Miscellaneous Income, if you issued it for transactions related to property located or used in Idaho.
Form 1099-NEC, Nonemployee Compensation, if you issued it for services performed in Idaho.
Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., if you withheld Idaho income tax.
Form 1099-S, Proceeds from Real Estate Transactions, if you issued it for transactions related to property located in Idaho.
Form 1099-A, Acquisition or Abandonment of Secured Property, for secured property located in Idaho.
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, for property located in Idaho or services performed in Idaho.
Form 1099-C, Cancellation of Debt, for secured property located in Idaho.
Form 1098, Mortgage Interest Statement, for property located in Idaho.
Form W-2G, Certain Gambling Winnings, for gambling that took place in Idaho.

Idaho forms

Form 910

You must forward the Idaho taxes you’ve withheld on behalf of your employees on a regular basis. You can forward the taxes by filing online or through the mail. (See Withholding Filing and Withholding Paying.)

You must file Form 910 for every filing period (e.g., monthly, quarterly). If you have no withholding to report, you must file a “zero” Form 910, either online or through the mail (but not both).

This is a sample of a paper Form 910.

Read more about “Filing Form 910” uon the Withholding filing page.

Form 967

Send Form 967 to us once a year. On it, you report the taxable wages and reconcile the total amount of Idaho taxes you withheld during the calendar year to the amount you paid us during the same year.

Use Form 967 to send us the state copy of the Form W-2s, Wage and Tax Statements, and any 1099s with Idaho income tax withheld.

You can do this either online using TAP or through the mail.

Idaho requires you to file W-2s and Form 967 electronically if you’re an employer who meets the IRS requirements to file W-2s electronically and you have 10 or more employees in Idaho.

This is a sample of a paper Form 967.

Form 96

You must file Form 96, Annual Information Return, on or before the last day of February. Report only the forms that apply to you. You can file a federal Form 1096 instead of this Idaho Form 96.

Substitute withholding forms

You can develop your own substitute withholding forms. Our Substitute Forms Specifications contain all the information you’ll need to create substitute forms and get them approved. Please contact the Substitute Forms Help Desk if you need more help.

Income you don’t have to withhold on

As an Idaho employer, you're always required to have a withholding account and report payroll.

You don’t have to withhold Idaho income tax in any of the following situations:

The employee isn’t a resident of Idaho and earns less than $1,000 in Idaho in a calendar year.
You employ an agricultural laborer who earns less than $1,000 in a calendar year.
The employee is exempt from federal withholding.
The employee is an American Indian who is an enrolled member of a federally recognized tribe, earns the income on a reservation, and lives on a reservation.
The employee gives you a Form ID W-4 stating he or she is exempt from withholding because he or she didn’t owe Idaho income taxes in the previous year and expects not to owe for the current year. Note: The exemption is only good for the current year. The employee must give you a new Form ID W-4 each year.

Motor carriers

If you’re an interstate motor carrier or private motor carrier and your employee has regularly assigned duties in more than one state, you only need to withhold income tax for the employee’s state of residence.

In general, a motor carrier provides motor vehicle transportation for compensation to the public or under a contract. A private motor carrier transports property it owns or leases by motor vehicle, and it transports the property for sale, lease, rent, or to further a commercial enterprise. See United States Code, Title 49, sections 13102 and 14503 to determine if the employee qualifies.

Air carriers

If your employees have regularly assigned duties on aircraft in more than one state, you must withhold income tax for their state of residence and the state in which they earn more than 50 percent of their wages. The percent of wages earned in a state is based on scheduled flight time in the state compared to total scheduled flight time for the year. See United States Code, Title 49, section 40116(f) to determine if the employee qualifies.

Railroad carriers

If you’re an interstate rail carrier and your employees have regularly assigned duties in more than one state, you only need to withhold income tax for the employees’ state of residence. See United States Code, Title 49, section 11502 to determine if the employee qualifies.

Water carriers

Don’t withhold any state income tax if your employee is a master or seaman who works on a vessel engaged in foreign, intercoastal, interstate, or noncontiguous trade. See United States Code, Title 46, section 11108 to determine if the employee qualifies.

IRA, pension or other similar payments

You don’t have to withhold Idaho income tax if you’re a payer of retirement income. Voluntarily, you can apply for an Idaho withholding account and pay the Idaho income tax withholding as a convenience to your payees. If you choose voluntarily to withhold, you must file Form 1099-Rs showing Idaho withholding by the due date. If you don’t choose to withhold Idaho income tax, you might want to notify payees and recommend they consider making estimated payments.

The income from an IRA, pension or other similar retirement payments is subject to Idaho income tax.

Active-duty military wages

You don’t have to withhold income tax on:

Military wages of a person stationed in Idaho if that person’s domicile isn’t Idaho.
Military wages of a person stationed outside Idaho if that person’s domicile is Idaho and their full-time active duty outside Idaho is for 120 consecutive days or more.

Note: You must withhold Idaho income tax on wages that a military person not on active duty earns in Idaho.

For military spouse information, see the Military page.

Withholding – Help for the self-employed and retired

If you’re self-employed or receive a pension payment, use the income tax tables to help you decide how much to set aside to pay your income tax.

Idaho doesn’t require estimated tax payments from individuals, but you can make payments at any time using either of these methods:

Form 51, Estimated Payment of Idaho Individual Income Tax
Quick Pay online (no login needed)

For more information, visit our W-4 page.

Withholding – Types of Employees

Generally, employees are any individuals who perform services for you when you have the right to control what they will do and how they will do it. This is true even when you choose not to exercise your control over the employee and allow the employee freedom of action. It’s also true regardless of how payments are measured or paid or whether the employee works full-time or part-time.

If an employer/employee relationship exists, it doesn’t matter what you call the relationship. Generally, people who perform services for you are employees unless they’re in business for themselves and offer the same service to others.

Corporate officers

A corporate officer who works for the corporation is an employee.

Statutory employees

If an employee qualifies as a statutory employee under federal law, you’re not required to withhold Idaho income tax. See IRS Publication 15-A, Employer’s Supplemental Tax Guide, or Publication 1779, Independent Contractor or Employee. for more information.

Family members

If a family member – even your spouse or child – gets paid for providing services, you must withhold Idaho income tax just as you would for a non-family member.

Domestic employees

If you hire an employee to work in your home:

The employee’s wages are subject to Idaho income tax.
You must have an Idaho withholding account and report the wages.
You’re not required to withhold Idaho income tax from the employee’s wages.
You must issue W-2 forms to your employees and file Form 967 and your employees’ W-2 forms by the due date.

Note: The person you hired might not be your employee if both these statements are true:

You hire someone who has a business providing household help.
That business provides services to more than one client.

Farm and ranch help

Withhold Idaho income tax from the employee’s check if all of the following apply:

You hire an employee to help you in your agricultural business.
You’re required to withhold for federal purposes.
The employee earns $1,000 or more during the calendar year.

You can file your Idaho withholding Form 910 either quarterly or annually depending on your situation:

File Form 910 quarterly if you file employment reports with the Idaho Department of Labor.
File Form 910 annually if you don’t have to file employment reports with the Idaho Department of Labor.

You must file Form 967, Idaho Annual Withholding Report, and the Idaho (“state”) copy of your employees’ W-2 forms.

Out-of-state employees

Employees who don’t live in Idaho

You must report the wages of any person working in Idaho. The wages are subject to Idaho income tax because the employee earned them in Idaho. You must withhold Idaho income tax if the person earns $1,000 or more in Idaho during the year.

Report all wages employees earned in Idaho as Idaho wages on Form W-2. It doesn’t matter if you withheld Idaho income tax or not.

Out-of-state companies and withholding Idaho income tax

You must withhold Idaho income tax if you’re an out-of-state employer and you have an employee who’s physically working in Idaho.

If the employee isn’t an Idaho resident, but earns more than $1,000 in Idaho in one year:

You must withhold Idaho income tax.
You must have an Idaho withholding account and report the employee’s wages to Idaho.

You don’t have to withhold Idaho income tax if the employee isn’t physically working in Idaho.

You can get an Idaho withholding account and voluntarily withhold Idaho income tax if the employee lives in Idaho and wants you to withhold tax.

Employees sent to another state to work

If you have employees who are Idaho residents working in another state:

Contact the state where the employee is working to determine that state’s withholding requirements.
You can also withhold Idaho income tax for income the employee earned in another state. All the employee’s income is taxable in Idaho because he or she is an Idaho resident.

Employees vs. independent contractors

Idaho law follows federal law regarding who’s an employee and who’s an independent contractor. The Internal Revenue Service (IRS) uses three characteristics to determine the relationship between a business and a worker.

Behavioral control

These facts show whether the business has a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business doesn’t actually have to direct or control the way the worker does work, as long as the business has the right to direct and control the work.

Financial control

These facts show whether the business has a right to direct and control the financial and business aspects of the worker’s job. These include:

The extent to which the worker has unreimbursed business expenses. An employee can also have unreimbursed business expenses.
The extent of the worker’s investment in the facilities used in performing services.
The extent to which the worker makes his or her services available to the relevant market.
The extent to which the worker can realize a profit or incur a loss.

Relationship of the parties

These facts show how the parties perceive their relationship. These include:

Written contracts describing the relationship the parties intended to create.
The extent to which the worker is available to perform services for other similar businesses.
Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay.
The permanency of the relationship.
The extent to which services the worker performs are a key aspect of the regular business of the company.

For more information about how to determine whether someone providing services is an independent contractor or an employee, see IRS Publication 15, Circular E, Employer’s Tax Guide and Publication 15-A, Employer’s Supplemental Tax Guide.