- Idaho Code section 63-3076 — Penalty for Divulging Information
- Idaho Code section 63-3077F — Information Furnished to Certain Individuals
Search Category: Income Tax
Income Tax for Seniors and Retirees
- Idaho residents must pay tax on their total income, including income earned in another state or country.
- Part-year residents must pay tax on all income they receive while living in Idaho, plus any income they receive from Idaho sources while living outside of Idaho.
- Nonresidents pay tax only on income from Idaho sources.
We have guides to help you learn more about Idaho Residency Status and Idaho Source Income.
Social Security benefits
While potentially taxable on your federal return, these aren’t taxable in Idaho.
Pensions
By federal law, Idaho taxes your pension if you’re an Idaho resident or part-year resident. If you’re a part-year resident, you’ll include your pension for the months you reside in Idaho on your Idaho return.
Idaho offers limited deductions for pensions. See the Idaho Retirement Benefits deduction.
Other retirement income
Idaho has exemptions for these sources of retirement income:
- Benefits that the Railroad Retirement Board pays
- Canadian Social Security benefits (OAS, QPP, and CPP)
The federal government might still tax these income sources.
Food tax credit
Find out if you qualify for the food tax credit, even if you don’t have to file an Idaho income tax return. This credit provides relief for some of the sales tax you pay on food.
IDeal
Idaho’s college savings program, can help you plan and save to pay for a family member’s higher education while lowering the Idaho income tax you owe. Learn more about this college savings program.
Withholding
Make sure you’re not surprised by a tax bill.
Estates and taxes
Idaho has no gift tax or inheritance tax, and its estate tax expired in 2004.
Tax identity theft
We have several resources to help you protect your identity.
Our Identity Theft page lists what to do about your taxes if you think you’ve been targeted.
Certain Individual Income Tax Guides
Seniors and Retirees
Married People and Community Property
Military
Authorized Software Developers List
- Forms available for electronic filing*: 40, 43, 41, 41S, 65, 66
- Schedules and Payments available for inclusion*: 39NR, 39R, 41A, 42, 44, 49, 49C, 49R, 56, 67, 68, 68R, 75, CG, ID-K1, PTE-01, PTE-12, Idaho ITC Equipment List, ID-529, ID-VP, Form 51, and Form 41ES.
*Availability varies with each software company.
We’ve authorized the companies below to develop software for tax year 2023 Idaho federal/state e-filing. These companies completed the authorization process. Testing occurs in November and December. The state of Idaho doesn’t endorse any specific software.
Note: We might not have tested any subsequent software versions.
| Product/Company Developer | Forms Supported (Including Amended Support) |
|---|---|
| 1040NOW 1040NOW Authorized Date: 12/09/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 66: Fiduciary Income Tax Return |
| April April Tax Solutions Inc Authorized Date: 12/23/2025 | Form 40: Individual Income Tax Return |
| ATX Universal Tax Systems Authorized Date: 12/15/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| Cash App Taxes Cash App Taxes, Inc Authorized Date: 12/01/2025 | Form 40: Individual Income Tax Return |
| CCH Axcess Tax Wolters Kluwer Tax & Accounting Authorized Date: 01/12/2026 | Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income |
| CCH ProSystem FX Tax Wolters Kluwer Tax & Accounting Authorized Date: 01/12/2026 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| Column Tax Column Tax Authorized Date: 01/12/2026 | Form 40: Individual Income Tax Return |
| CSC Corptax Corptax, Inc Authorized Date: 12/29/2025 | Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income |
| CrossLink and CrossLinkOnline CrossLink Professional Tax Solutions Authorized Date: 12/01/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income |
| Drake Tax Drake Software Authorized Date: 12/22/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| Express1040.com TaxHawk, Inc. Authorized Date: 11/21/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| ezTaxReturn ezTaxReturn Authorized Date: 12/02/2025 | Form 40: Individual Income Tax Return |
| FileYourTaxes.com Fileyourtaxes.com Authorized Date: 12/31/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| FreeTaxUSA.com TaxHawk, Inc. Authorized Date: 11/21/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| GoSystem/OneSource Thomson Reuters Authorized Date: 01/14/2026 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| H&R Block BlockWorks HRB Development Authorized Date: 11/14/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| Instead Instead Authorized Date: 01/14/2026 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| Lacerte Intuit Authorized Date: 12/04/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| MyTaxPrepOffice Advanced Tax Solutions Authorized Date: 12/30/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| OLT Pro Desktop OnLine Taxes Authorized Date: 12/12/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| OLT Pro Web OnLine Taxes Authorized Date: 12/12/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| OLT.com OnLine Taxes Authorized Date: 12/12/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| ProConnect Tax Online Intuit Authorized Date: 12/04/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| ProFiler Jackson Hewitt Authorized Date: 01/05/2026 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| ProSeries Intuit Authorized Date: 11/19/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income |
| Pro Tax Pro Fileyourtaxes.com Authorized Date: 12/31/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| TaxAct TaxAct Authorized Date: 01/14/2026 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income |
| TaxHawk.com TaxHawk, Inc. Authorized Date: 11/21/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| Tax Series Tax Technologies, Inc Authorized Date: 11/17/2025 | Form 41: Corporation Income Tax Return Form 65: Partnership Return of Income |
| TaxSlayer Professional TaxSlayer Authorized Date: 12/04/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| TaxWise TaxWise Authorized Date: 01/06/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| TurboTax Intuit Authorized Date: 12/22/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return |
| UltraTax CS Thomson Reuters Authorized Date: 01/06/2026 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41: Corporation Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income Form 66: Fiduciary Income Tax Return |
| WinTax 1040 Taxware Systems Authorized Date: 12/23/2025 | Form 40: Individual Income Tax Return Form 43: Part-year Resident and Nonresident Income Tax Return Form 41S: S Corporation Income Tax Return Form 65: Partnership Return of Income |
Tax Preparers
Handbooks
Contact our substitute forms desk at substituteforms@tax.idaho.gov if you need prior copies of these documents.
Identity Verification Info
The Tax Commission might need to verify your identity. This helps safeguard your information and keeps your refund from going to criminals.
You could receive one of three letters:
- A PIN letter that asks you to enter a personal identification number (PIN) we provided to confirm you filed the tax return we received
- A quiz letter that asks questions to verify your identity
- An ID verification letter that asks you to provide copies of documents
If you received one of these letters, you must respond before we can process your return or pay any refund.
Received a PIN letter?
Follow the instructions in the letter within 30 days of receiving it.
Received a quiz letter?
Only you can take the quiz.
If you can’t take the quiz, don’t pass the quiz, or don’t want to take it, you or your legal representative** can upload, mail, or bring the required documents to the Tax Commission.
** Your legal representative can be a legal guardian or someone you’ve given power of attorney to.
Received an ID verification letter asking for documents only?
Follow the instructions in the letter within 30 days of receiving it.
Required documents
Please DON'T provide original documents; we can’t return them.
Send required documents:
- If you got a quiz letter but didn’t take or pass the quiz.
- If you got the ID verification letter.
You must provide a copy from each of the following four categories below:
- A copy of page one only of the letter you received.
- A copy of your Social Security card, ITIN letter, or Medicare benefits statement.
- A copy of a government-issued identification that has your full name.
Examples include but aren’t limited to:
- Driver’s license or Star Card (current or expired less than a year)
- Idaho identification card
- Passport
- Military identification
- A copy of a document that an organization mailed you less than three months ago showing your full name and address. It must match the name and address used on your current tax return.
Examples include but aren’t limited to:
- Utility bill (gas, electric, cable, cell phone, etc.)
- Bank statement (page one only)
- Payroll stub
- Tax bill
- Insurance policy (vehicle, homeowners, renters, health, life)
- Credit card statement (page one only)
Contact the issuing agency (e.g. Social Security Administration, IRS) if you’ve lost the required government-issued identification.
Returning documents
You can upload, mail, or bring the copies to a Tax Commission office.
Upload the documents
Upload copies securely online.
Mail the documents
Mail your identity verification letter, along with copies of the required documents, to:
Attn: Tax Discovery Bureau
Idaho State Tax Commission
PO Box 36
Boise, ID 83722-0410
We recommend you use registered or certified mail to track your documents and verify delivery.
Bring the documents to a Tax Commission office
Bring your identity verification letter, along with copies of the required documents, to one of our offices. See Office Hours and Locations
Identity Theft
Victim of identity theft? Contact us in one of these ways:
- Email us anytime at fraud@tax.idaho.gov
- Call Mon.-Fri. 8 a.m. – 5:30 p.m. Mountain Time (On the 2nd and 4th Wednesdays of the month the call center opens at 9:30 a.m. Mountain Time):
(208) 334-7660 in the Boise area
(800) 972-7660 toll free
(800) 377-3529 Idaho Relay Service (TDD) for hearing-impaired callers
Identity theft is a fast-growing crime. Thieves steal identities to use a victim’s credit, but also to get tax refunds and government and medical benefits.
Thieves can get your identity by taking your wallet, phone, or mail. They can obtain your information through data breaches at your work or at the businesses you use. They can also trick you into giving them your information.
Watch out for:
- Emails, letters, phone calls, or texts asking for personal information or passwords. This is true even if the communication says it’s from someone you know such as your bank, a government agency, a business you use, or a relative.
- Any communication urging you to pay, call, visit a website, or click a link now.
- Any communication that threatens you with consequences – such as jail time, lost money, or lost data – if you don’t respond immediately.
When in doubt, look up the sender yourself on the internet or from old correspondence you know is from them. Then, contact the sender to see if the communication is legitimate.
Indications you might be a victim
Here are some indicators that you might be a victim of identity theft:
- Your credit card or bank statements show unfamiliar charges.
- You receive an explanation of benefits from your medical insurance provider for services you didn’t receive.
- You’ve stopped receiving your regular mail, such as bills.
- You’re receiving more than your regular mail. For example, you start getting letters from the IRS, or other states’ tax agencies or unemployment agencies.
- Collectors are calling about debts that aren’t yours. This could include tax bills you don’t know about or a payback for unemployment benefits you didn’t receive.
- The IRS rejects your tax return.
- Your tax preparer, employer, or a business you use notifies you that someone breached its security.
- Your credit report shows unfamiliar accounts or charges.
How we protect identity theft victims
We’re committed to:
- Identifying and stopping tax identity theft wherever possible.
- Helping victims safely file their tax returns and receive the refunds they’re entitled to.
Flagging accounts
When the Tax Commission suspects or receives a report of identity theft, we flag the tax account. This stops any refund from processing. We contact the account owner to verify the owner’s identity. In this way, we make sure we’re issuing refunds to the correct individuals.
If you think your refund has been delayed longer than expected, call Taxpayer Services at (208) 334-7660 in the Boise area or toll-free at (800) 972-7660 to check on it.
Future tax filings
The IRS has a process that allows victims of identity theft to continue e-filing their federal tax returns using a special number that changes each year.
Idaho uses a different process. When you file future tax returns, we’ll ask you to take extra steps to identify yourself before we issue any refunds. These steps may include: entering a PIN (number) online, taking a quiz, or sending us additional identity documents.
Trend analysis
The Tax Commission analyzes all our identity theft data and works with the IRS and other state agencies to spot trends and take actions to counteract them. Our goal is to prevent similar attempts to steal state refund money using stolen identities.
Types of identity theft related to tax filing
Take these actions if you’re an identity theft victim:
- File your return as soon as possible because it’s important that your real tax return is on record. You can e-file it, mail it to the Tax Commission, or drop it by one of our offices.
- Follow the steps in the Reporting Tax Identity Theft section below.
Refund fraud
This happens when thieves use stolen Social Security numbers (SSNs) to file tax returns and claim fraudulent refunds.
Often the real SSN owners don’t know about the theft until the Tax Commission or IRS contacts them: The IRS or Tax Commission has discovered two returns e-filed using the same SSN.
- Some thieves only file false federal (IRS) tax returns.
- Other thieves file in multiple states using the stolen ID.
Idaho is part of a network of many states that shares identity theft reports. This helps reduce tax identity theft — but not all states are part of this network.
Dependent identity theft
This happens when people claim dependents on a tax return when they’re not entitled to do so.
This enables the thief to wrongly claim the:
- Earned Income Tax Credit (federal)
- Additional Child Tax Credit (federal)
- Idaho Food Tax Credit
- Idaho Child Tax Credit
Employment identity theft
Identity thieves can use stolen SSNs to get a job. Sometimes they use their own name, or they might use the true owner’s name instead.
Employers must report wages paid to employees to the Idaho Department of Labor and the Social Security Administration. They use the SSN as identification. If a thief is using your SSN, that reported income might mix with your actual income on reports.
Contact the Tax Commission immediately if you receive a notice for unpaid taxes:
- On income you didn’t earn
- From a company you didn’t work for
- From a state you’ve never lived or worked in
Reporting tax identity theft
Report identity theft, get a recovery plan, and put the plan into action.
If you’re a victim of identity theft and are concerned about your taxes being affected, contact the Tax Commission and the IRS as soon as possible.
- Complete IRS form 14039 – Identity Theft Affidavit. Make three copies, keeping one copy for your records.
- Mail one copy to the Tax Commission’s tax identity theft unit at:
Identity Theft, Idaho State Tax Commission, PO Box 36,
Boise ID 83722-0410.
Once we receive a copy of a Form 14039, we flag your account. (See “How we protect identity theft victims,” above.) - Mail or fax a copy to the IRS at the address provided on the form.
- Contact the Federal Trade Commission (FTC) at IdentityTheft.gov. The website allows you to make a report to the FTC, fill out a Form 14039 and lists valuable steps to follow:
- Call the companies where you know the fraud occurred.
- Get your credit reports. Check your credit reports for unauthorized activity using Annual Credit Report.com. By law, you’re entitled to check each of the three credit reporting agencies (Equifax, Experian, and TransUnion) once a year at no charge. Each time you suffer an identity theft incident, you’re entitled to an additional free credit report, but you’ll need to provide a police report for each incident to add a fraud victim alert.
- File a police report. The Tax Commission can’t do this for you, nor can we provide information directly to law enforcement officials.
- Notify your financial institution and other creditors. Close new accounts in your name. You should close any accounts that have been tampered with. Your bank can help you open new accounts.
- Call the companies where you know the fraud occurred.
Forms and guides
- IRS Form 14039 — IRS Identity Theft Affidavit
- FTC: Identity Theft
- IRS: Identity Theft Central
- IRS Publication 4524 Security Awareness and Identity Theft
- Form ID-POA – Power of Attorney
Laws and rules
Conformity to Federal Internal Revenue Code (IRC)
Once Idaho conforms to the IRC, it follows the federal effective date of any federal changes adopted, including any retroactive dates.
2024
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2024. See House Bill 385 – signed by Governor Little on February 1, 2024.
2023
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2023. See House Bill 21 – signed by Governor Little on February 15, 2023.
2022
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2022. See House Bill 472 – signed by Governor Little on February 23, 2022.
2021
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2021. See House Bill 58 – signed by Governor Little on February 18, 2021.
2020
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2020. See House Bill 380 – signed by Governor Little on February 17, 2020.
2019
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2019. See House Bill 13 – signed by Governor Little on February 4, 2019.
2018
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2018. See House Bill 463 signed by Governor Otter on March 12, 2018.
Individuals
For individuals, the changes include:
- Increasing the standard deductions
- Single = $12,000
- Head of Household = $18,000
- Married Filing Jointly = $24,000
- Eliminating the personal exemptions
- Eliminating dependent exemptions
- Eliminating or capping most itemized deductions
- Changing the definitions for qualified expenses from a 529 Education Savings account to include K-12 and private schools
- Creating a nonrefundable Idaho child tax credit of $130 per qualifying child. House Bill 675 subsequently increased the credit to $205.
- Reducing the individual income tax rate 0.475%. The top rate for individuals is now 6.925%.
Business
For businesses, the changes include:
- Increase of IRC Section 179 expense limit to $1 million.
- The section 179 is an immediate expensing or accelerated depreciation election. The new law raises the expense limit from $500K to $1 million.
- Bonus depreciation (section 168(k)) is a separate issue and Idaho doesn’t conform to that section.
- Simplified accounting for small business.
- Simplified accounting increases the threshold for a business to be required to use accrual basis accounting from $5 million in gross receipts to $25 million. For example, a business will be able to take a deduction for some additional items that it previously would have kept as assets until used.
- Interest expense limited to 30%.
- Interest expense deductions for a business are being limited to 30% of the sum of adjusted taxable income and taxable interest income.
- 1031 exchanges limited to real estate.
- The section 1031 exchange allows deferring reporting any gain on the exchange of property except for cash received, until ultimately sold. This provision limits exchanges of like-kind property to real property.
- No longer allows like-kind exchanges for other investment property such as airplanes or art.
- S corporation to C corporation conversion rules.
- The S corporation to C corporation conversion will allow some post-conversion distributions.
- Inclusion of income (more choices).
- The inclusion of income provision requires businesses to report taxable income no later than when it’s reported on their financial statement.
- Repeal Section 199, the domestic production deduction.
- The deduction’s original intent was to encourage investment in domestic facilities. With the new federal territorial tax regime established with the Tax Cuts and Jobs Act, this provision isn’t necessary.
- Repeal employee entertainment expense.
- Employee recreational memberships aren’t allowed. Professional memberships for business are allowed.
- Repeal employee transportation and parking reimbursement.
- Employee commuting and parking expenses are no longer allowed.
- Section 199A – Reduce most pass-through income by 20% on the owner’s income tax return.
- Section 461(l)(2) – Disallow active pass-through losses in excess of $500,000 for joint filers, $250,000 for all others.
- Reduction of the corporate income tax rate by 0.475%. The top rate for corporations is now 6.925%.
2017
Idaho has passed two laws to conform to parts of the Internal Revenue Code (IRC) as of Dec. 21, 2017. The laws affect only tax year 2017.
House Bill 355
(signed by Governor Otter on Feb. 9, 2018)
In addition to the normal conformity, Idaho also conforms to:
- The provision that lowers the threshold to claim medical expenses from 10% down to 7.5%.
- The provision that requires taxpayers to report and pay tax on the repatriation of previously unreported overseas earnings that could apply to 2017. Taxpayers who file on a water’s-edge basis should attach their IRC 965 Transition Tax Statement to their Idaho return.
Idaho still doesn’t conform to bonus depreciation.
House Bill 624
(signed by Governor Otter on March 20, 2018)
Idaho conforms to some of the federal tax breaks that Congress extended as part of the federal budget reconciliation. The Idaho law extends the sunset date of 11 deductions that Idaho normally conforms to.
Below is a list of Internal Revenue Codes that Idaho conforms to for 2017 and their description.
| IRC | Description |
|---|---|
| 108 | Exclusion from gross income of principal residence debt relief |
| 163 | Mortgage insurance premium deduction |
| 222 | Qualified tuition deduction (On Form 40, it's included in your federal adjusted gross income. On Form 43, report on line 22.) |
| 168(e) | 3-year depreciation of certain race horses |
| 168(i) | 7-year recovery for motorsports complexes |
| 179E | Mine safety expense deduction |
| 199 | Puerto Rico production deductions 199 |
| 168(e) | 5-year cost recovery for energy property |
| 179D | Energy efficient commercial building expenses |
| 181 | Film, television, and theater production cost deductions |
| 451 | State energy restructuring |
2016
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2017. See House Bill 26 – signed by Governor Otter on Feb. 13, 2017.
2015
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2016. See House Bill 425 signed by Governor Otter on February 9, 2016.
- Idaho conforms to the IRC section 179 expense provisions. You can claim the IRC section 179 expense on your Idaho return to the extent you claim this deduction on your federal income tax return.
- Idaho doesn’t conform to bonus depreciation.
Since Congress extended the federal provisions for a general sales tax deduction, as well as tuition and related expenses, you can report these expenses as follows:
- Report a deduction for state and local sales tax on: Form 40, line 14, or Form 43, line 34.
- Report qualified tuition and related expenses on: Form 40 — these items will be part of your federal adjusted gross income (AGI), or Form 43, line 22
Idaho conforms to the new federal repair regulations but doesn’t require documentation of that change other than what’s required at the federal level.
2014
Idaho law conforms to the Internal Revenue Code (IRC) as of Jan. 1, 2015. See House Bill 77 signed by Gov. Otter on Feb. 23, 2015.
Idaho conforms to the IRC section 179 expense provisions. You can claim the IRC section 179 expense on your Idaho return to the extent you claim this deduction on your federal income tax return.
Idaho doesn’t conform to bonus depreciation.
Since Congress extended the federal provisions for a general sales tax deduction, as well as tuition and related expenses, you can report these items as follows:
- Report a deduction for state and local sales tax on:
- Form 40, line 14, or
- Form 43, line 34
- Report qualified tuition and related expenses on:
- Form 40 – these items will be part of your federal adjusted gross income (AGI), or
- Form 43, line 22
Idaho conforms to the new federal repair regulations but doesn’t require documentation of that change, other than what’s required at the federal level.
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 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:
- We’ll prepare an official agreement for your final approval, and a tax bureau chief will sign it.
- We’ll send a copy of the agreement to the company representative listed on your application.
- 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.)
- 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 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
Pass-through reporting requirements flowchart. This chart can help you determine the reporting requirements of a pass-through entity and its pass-through owners.- Calculating Idaho Distributable Income
- Guaranteed Payments Guidance
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
CP2000
CP2000 is a federal (IRS) program. It compares the income and deductions reported on your federal tax return with information reported from other sources (e.g., employers, banks, businesses). If the amounts don’t match, the IRS adjusts your tax return and mails you a CP2000 notice.
What to do after getting an IRS CP2000 notice
Income and deduction amounts on your Idaho tax return must match those reported on your federal tax return unless an Idaho or federal law says otherwise.
You must contact the Tax Commission if the IRS has adjusted your federal income tax return. You must do this within 180 days of the final federal determination to avoid a negligence penalty. Interest accrues on any amount you owe, starting after the due date of the original return.
You can either:
- File an amended Idaho individual income tax return. Attach a copy of your federal CP2000 notice and any other relevant documents.
- Provide the Tax Commission with a copy of your federal CP2000 notice and any other relevant documents.
Mail to:
Tax Discovery Bureau – CP2000
Idaho State Tax Commission
PO Box 36
Boise ID 83722-0410
Tip:
Review your tax returns for years surrounding the CP2000 period to see if changes are needed for those years as well. If so, file amended tax returns for those years as soon as possible. This could help you avoid future audits.
IRS notifies Idaho
The IRS forwards information on its CP2000 audits to many states, including Idaho.
Note: You might lose the ability to claim a refund if you don’t amend within one year of the federal CP2000 audit notice. If we receive an amended return after that date but within 10 years of the due date of the original return, you might be eligible for a nonrefundable credit.
How Idaho will notify you of the CP2000 adjustment
We’ll notify you by mail if you don’t file an amended return. This notice will provide you with your taxpayer rights.
Paying
If you agree with Idaho’s calculation of tax, you can either:
- Pay the balance in full. See how to make payments.
- Request a payment plan.
Protesting
If you don’t agree with Idaho’s calculation of tax, you have the right to protest. Read about CP2000 protests below.
Protest
If you disagree with the IRS’s CP2000 notice, follow the instructions provided with the notice. You can also:
- Contact the IRS and request a Tax Account Transcript for comparison.
- If the Tax Account Transcript differs from the federal CP2000 notice, send the Tax Commission copies of the transcript and the federal CP2000, along with an explanation of the difference. Mail the documents to:
Tax Discovery Bureau – CP2000
Idaho State Tax Commission
PO Box 36
Boise ID 83722-0410
If the Tax Account Transcript is the same as the Idaho CP2000 data and you don’t agree with it, you must contact the IRS to submit a request for corrections. If the IRS adopts those changes, Idaho can follow suit.
If not corrected by IRS
If you don’t agree with the CP2000 adjustment and it hasn’t been corrected by the IRS, you can dispute the Idaho adjustment by filing a written protest within 63 days from the date we issue the Notice of Deficiency Determination (NODD). Send your protest to the Tax Commission at the address shown on the NODD. For your written protest to be accepted, it must include these four items:
- Your name, address, and taxpayer identification number.
- The tax period(s) covered by the protest.
- The specific item(s) in the NODD to which you object.
- The specific legal or factual reason(s) you think the notice is in error.
Note:
If you submitted an amended federal return to make changes to the amount of the federal CP2000 adjustment, we must verify that the Internal Revenue Service (IRS) accepted your changes. If the IRS accepted your changes, we’ll adjust the Idaho NODD accordingly. If the IRS didn’t accept your changes, we’ll notify you.
Once we receive your protest documents, we’ll review them to be sure the required information is included (see above).
- If your protest isn’t acceptable, we’ll send you a letter telling you the information we need. You must respond within 28 days. On the 29th day, your protest expires and the NODD becomes due and payable.
- If your protest is accepted, we’ll send you a letter acknowledging your protest within 14 days after receiving it.
Additional information
After you file your protest, you can provide more supporting information for us to consider. If we agree with the information you provide, we’ll send you a modified notice.
Unable to agree
If we’re unable to agree on the resolution of the issues, your file will be transferred to the Tax Commission’s Appeals department. They’ll send you a letter explaining the appeals process, including your hearing rights and how to submit additional information.
Read more about the protest process on the Your Right to Appeal a Notice of Deficiency Determination page.
You can read more about your rights on our Taxpayer Rights page.
Laws and rules
- Notice of redetermination or deficiency, interest — Idaho Code section 63-3045
- Penalties and additions to the tax in case of deficiency — Idaho Code section 63-3046
- Period of limitations for issuing a Notice of Deficiency and collection of tax — “…adjusted as a result of a final federal determination…” [Idaho Code section 63-3068(f)]
- Notice of adjustment of federal or state tax liability — Idaho Code section 63-3069
- Credits and refunds — “…the period of limitations for claiming a refund or credit…” [Idaho Code section 63-3072(d)]
- Income Tax Administrative Rule 890
- Idaho Tax Administration and Enforcement Rule 410
Additional help
- Contact us if you have questions on CP2000 audits.
- Federal Filing Changes and Your Idaho Income Tax Return
- If you’d like someone else to represent you during your audit, complete and return this Idaho Power of Attorney (POA) form.