Substitute W-2 Wage and Tax Statement

If you file your Form 967 through TAP, you’ll no longer receive a paper return in the mail.

File a Form 967, Idaho Annual Withholding Report, if you either:

Had an active Idaho withholding account for any part of the year
Withheld Idaho income tax during the year

Use this form to report the Idaho income tax you withheld, reconcile payments you made during the year with the amount of tax you withheld, and submit your W‑2, 1099 forms, or both containing Idaho withholding.

Form 967 INSTRUCTIONS – Annual Withholding Report

Sign the return if you’re filing on paper. We’ll send you a Form 967 if you cancel your account during the year. You don’t have to wait until the end of the year to file, in this case.

Late filing

We charge penalty and interest on the amount of tax due from the due date until you pay.

We can apply a penalty of $2 per month for each W‑2 and 1099 that you don’t submit by the filing due date. The minimum penalty is $10; the maximum penalty is $2,000.

Reconciling

Gather these records and forms to help you reconcile your Idaho income tax withholding:

Payroll records
Idaho withholding payment records or the Record of Idaho Withholding Payments worksheet
Completed W‑2s and any 1099s with Idaho income tax withholding
Form 967, Idaho Annual Withholding Report

Amounts that should balance

Idaho income tax withheld from employee wages
Idaho income tax you forwarded to the Tax Commission throughout the year
Idaho withholding reported on W-2s and 1099s

Round amounts to the nearest dollar when filing Form 910 or Form 967. Round up to the next dollar if an amount is more than 50 cents.

If they don’t balance:

Review all documents for mathematical errors.
Review payments for dollar amounts and dates submitted.
Review all withholding documents (W‑2s and 1099s) to be sure you included only Idaho income tax withholding.
Check for any corrections (Form W‑2C).

If the totals still don’t match after you’ve completed your review, you might owe tax or be due a refund.

Amending your Form 967

Complete a new Form 967 using the correct amounts. (Contact us if you need a copy.)
Include any corrected W-2s (Form W‑2C) and 1099s with Idaho withholding.
If you filed electronically and have more than 20 W-2s, contact the Tax Commission to discuss filing options.
Check the “Amended” box on the Form 967 and send the corrected forms to: Idaho State Tax Commission, PO Box 76, Boise ID 83707-0076.

Online filing

Your EFW2 data file must be in text format that follows the Social Security Administration’s Publication #42-007 and includes the state-specific records defined in our W‑2 e-file specifications. You can find specifications for the EFW2 file layout on our Software Developers page.

You don’t need to file a separate Form 967 if you’ve submitted a valid EFW2 file. We’ll create your Form 967 from your EFW2 file.

Your Form 967 might still have a File Now link after you upload your file. It takes us one to two business days to process your uploaded file. Once we process your file, the File Now link disappears.

Uploading your EFW2 file

Log in to your TAP account.
On the Home page, locate your withholding account and click Upload an EFW2 file or Upload a 1099 file (on the right).
Click Choose File, select the correct file type, and enter a description.
Click Browse, search your computer or network for the file, and select it.
Click Save.

You also can file your W‑2s by entering the W‑2 detail online through your TAP account.

Error messages

Error messages appear when your file contains invalid data or an incorrect layout. You’ll have to fix the issues noted in the error message problems before you can submit the file. In general, the error message indicates a specific row and position in the row that needs attention.

If you have up to 10 errors in your file, the error screen that appears after saving will list all of the errors.
If you have more than 10 errors, we’ll email the list to the email address we have on file for your account.

Note: You can find the specifications for the EFW2 file layout on our Software Developers page.

If you manage multiple companies

If all the companies have individual files, you’ll have to upload them separately.
If you put all the companies in one file, you can upload it as a single file.

Whichever method you choose, you must include an electronic version of Form 967 for each employer file.

Paper filing

Complete your Form 967, and attach paper W-2s and any 1099s with Idaho income tax withholding to the form. Please make sure all copies of employees’ W‑2s and 1099s are legible.

Mail forms to: Idaho State Tax Commission, PO Box 76, Boise ID 83707-0076.

Read this information if you want to file your 1099s in February.

Requirement to file online

Idaho requires you to file W-2s and 1099s electronically if the IRS requires you to file electronically. IRS requires electronic filing for 10 or more information returns. If you’re required to file electronically but don’t, we’ll reject the Form 967 and consider you a non-filer.

Income You Must Withhold On

All wages, tips, and other compensation that employees earned or were paid for services performed in Idaho are subject to Idaho income tax withholding. The pay may be in cash or in another form. Pay includes salaries, vacation allowances, bonuses, commissions, and fringe benefits. It doesn’t matter how you measure the compensation or make the payment. Generally, if the Idaho compensation is subject to federal income tax, it’s also subject to Idaho income tax.

Compensation you pay to a former employee for services performed while he or she was still employed in Idaho is subject to Idaho income tax withholding.

Example An employee is granted stock options, and those options vest while the employee is performing services in Idaho. The compensation or gain is subject to Idaho income tax withholding when the employee exercises the options. This is true even if the employee lives or works outside of Idaho when he or she exercises the options.

Wages

All wage income is subject to Idaho income tax if an employee earns the income while working in Idaho. This includes:

Employees who aren’t Idaho residents
Employees who are family members
People working only one day in Idaho (e.g., performers, athletes)
People who aren’t citizens of the United States, unless they’re exempt from federal withholding

Reimbursements for employee business expenses

Your requirement to withhold income tax depends on your reimbursement or allowances plan.

If you have an accountable plan you don’t have to withhold Idaho income tax on reimbursements for employee business expenses.
If you have a nonaccountable plan you must withhold Idaho income tax on reimbursements for employee business expenses.

See IRS Publication 15, Circular E, Employer’s Tax Guide, for definitions of accountable and nonaccountable plans.

Wages paid “in kind”

This refers to wages you pay employees in something other than money. Examples include goods, lodging, food, clothing, services or personal use of a company vehicle.

Generally, you must withhold Idaho income tax on the fair market value of such payments when you make them for services employees provided in Idaho.

Exception You don’t have to withhold Idaho income tax for food or lodging provided for the employer’s convenience if the food or lodging qualifies for an exclusion from wages under federal law.

Supplemental wages

Idaho income tax applies to any of these items if the employee earned it while working in Idaho:

Bonuses
Commissions
Overtime pay
Payments for accumulated sick leave
Severance pay
Awards or prizes
Back pay, retroactive pay, other similar payments

Compute withholding one of these ways:

Combine the supplemental payment with regular wages and treat it as a single payment.
Multiply the separately-issued supplemental payment by 5.695 percent.

Employee benefits

Benefits that are taxable under the Internal Revenue Code (IRC) are subject to Idaho income tax withholding if they’re earned for services the employee provided in Idaho. It doesn’t matter when the employee receives the benefit.

Examples of a Taxable Benefit Cars and flights on aircraft that the employer provides, free or discounted commercial flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. These are also called fringe benefits.

Benefits such as 401(k) plans and cafeteria plans that the IRC considers tax deferred are also tax deferred for Idaho and not subject to income tax withholding.

Stock options

We consider granting stock options to be compensation for services, whether treated as compensation or capital gain income for federal income tax purposes. This income is subject to Idaho income tax withholding if the employee performed services in Idaho between the time the option was granted and the time the option vested. For more information, see Idaho Income Tax Rule 271.

Tips

Tips employees receive for work they do in Idaho are subject to Idaho income tax withholding. Report as Idaho income the same tip amount you reported as federal income. See IRS Publication 531, Reporting Tip Income.

Filing Information Returns (1099s, W-2s)

Copies of these forms are due to the Tax Commission by the last day of February.

How to file

1099s are information returns you use to report certain payments and services.

Form 967 and W-2s are due by the last day of January, and 1099s are due by the last day of February. If you have 1099s to file, you can use one of these options:

File all forms (967, W-2s, and 1099s) by the last day of January.
- Following this schedule can help you reconcile your withholding because you’ll be working with all your records at once.
- You can file online using TAP, or you can file by paper.
- How to upload an EFW2 file to Idaho.
File your Form 967 and W-2s by January 31, and file your 1099s by the last day of February.
- Make sure to include the amount of Idaho withholding from the 1099s along with the withholding from the W-2s in the “Total Idaho Tax Withheld” amount you reported on the Form 967.
- Also, include the number of 1099s with Idaho withholding on Form 967.
- If you’re participating in the Combined Federal/State Filing program, check the appropriate box on the form.
- Read Filing 1099s in February, below.

Filing 1099s in February

If you choose the second option, follow these instructions when you file your 1099s:

Filing online through TAP

Report in the RV record (the electronic Form 967) only the withholding amounts from the 1099s included in the file.

Log in to your TAP account.
On the Home page, locate your withholding account and click File/View Returns (on the right).
Click Upload an EFW2 file or Upload a 1099 file.
Click Browse, select the correct type, and enter a description.
Click Browse to search your computer or network for your EFW2 or 1099 file and select it.
Click Save.

Once you’ve successfully uploaded your file, you’ll see a confirmation screen that you can print.

You can file these returns using TAP, but you can’t enter the data on them manually, one by one. See:

IRS Pub 1220, Filing Information Returns Electronically
Information Return 1099 E-Filing Guide
Software Developers page

Filing by paper (and the 1099s include Idaho withholding):

On Form 967, line 2, “Total Tax Withheld,” enter the Idaho withholding from the 1099s and the Idaho withholding from the W-2s you filed earlier.
Include the number of 1099s with Idaho withholding on Form 967, line 9.
Write “AMENDED” on Form 967.
Mail Form 967 and your 1099s to: Idaho State Tax Commission, PO Box 76, Boise ID 83707-0076.

For more information about completing the Form 967, see the Form 967 INSTRUCTIONS – Annual Withholding Report.

Filing by paper (and the 1099s don’t include Idaho withholding):

Complete Form 96 – Annual Information Return (or include a copy of IRS Form 1096).
Mail the form and your 1099s to: Idaho State Tax Commission, PO Box 36, Boise ID 83722-0410.

1099 Combined Federal/State Filing program

This program allows payers and agents to file an information return with the federal government, and it authorizes the release of this information to the applicable states. You must get permission from the IRS in advance to participate. See IRS Publication 1220.

If your information returns have Idaho withholding, you must complete Form 967, Idaho Annual Withholding Report.

If you file your 1099s and other information returns through the Federal/State Combined Filing program:

Don’t file 1099s electronically through the Tax Commission’s website.
Don’t submit paper copies of 1099s with your Form 967.

Agency Contacts for Employers

Internal Revenue Service

https://www.irs.gov/

Federal Tax Withholding, FUTA, FICA, IRS Publication 15, Circular E, Employer’s Tax Guide

Boise office: 550 W. Fort St., Boise ID 83724

(800) 829-4933

Idaho Department of Labor

https://labor.idaho.gov/

Boise office: 317 W. Main St., Boise ID 83735

(800) 448-2977 toll free or (208) 332-3576 in the Boise area (Employer Services)

(208) 332-3579 (Wage payment labor law issues)

(208) 332-3570 (Unemployment Insurance, Job Service)

Idaho Industrial Commission

https://iic.idaho.gov/

State Workers Compensation Law, Industrial Accident Insurance

Main office: 11321 W. Chinden Blvd, Boise Idaho 83714 (Building #2)

(800) 950-2110 toll free or (208) 334-6000 in the Boise area

U.S. Citizenship and Immigration Services (USCIS)

https://www.uscis.gov/

(Under Homeland Security Dept.)

Employment Eligibility Verification

Boise office: 1185 S. Vinnell Way, Boise ID 83709

(800) 375-5283 toll free or (208) 685-6600 in the Boise area

Idaho Secretary of State

https://www.sos.idaho.gov/

Business DBAs, Articles of Incorporation, UCC

Boise office: 450 N. 4th St., Boise ID 83702

(208) 334-2300

Small Business Administration

https://www.sba.gov/

General information for businesses and employers

Boise office: 380 E. Parkcenter Blvd., Ste. 330, Boise ID 83706

(208) 334-9004

Withholding Laws & Rules

Income tax withholding

Topic	Laws and rules
State Withholding Tax On Percentage Basis Withholding, Collection and Payment of Tax	Idaho Code section 63‑3035
State Withholding Tax for Farmers	Idaho Code section 63‑3036
Information returns	Idaho Code section 63‑3037 Income Tax Rule 830
Requirements Of An Idaho Withholding Account Number	Income Tax Rule 870

2022 Income Tax Rules Examples

Learn more about Idaho tax statutes

Learn more about our Rules

Withholding Recordkeeping

Use the Record of Idaho Withholding Payments Worksheet to help you track your withholding information.

Withholding records

Your withholding records should include:

Taxable wages
Idaho income tax withheld
Amount paid
Date paid
Penalty or interest, if included with payments

Payroll records

You must keep your payroll records for at least four years. They should include:

Name, address, and Social Security number of each employee
Dates of employment
Dates and amount of all wage payments and taxes withheld
Hours and location of work
A federal Form W-4 for each employee (and a Form ID W-4, if available)
Canceled payroll checks
Copies of all W-2s and 1099s
Federal Form I-9, Employment Eligibility Verification

Employees’ unclaimed or uncashed payroll checks

The Unclaimed Property Act requires that you try to locate the owner of any money you hold. If you can’t locate the owner within a year, you must file an unclaimed property holder report and turn the money over to the Unclaimed Property Section of the State Treasurer’s Office for safekeeping.

Withholding Guides

Guide Name	Revision Date
Save Yourself from an Unexpected Tax Bill - Act NOW!	01-07-2019
Your Guide to Backup Withholding	01-07-2013
2024 Information Return 1099 E-Filing Guide	12-12-2024
Due Dates for Sales/Use, Travel & Convention, Greater Boise Auditorium District, E911, and Withholding - flyer	02-23-2022
Sample Form 910	02-19-2019
Sample Form 967	02-19-2019
Sample Form W-2	02-19-2019
Should I Withhold Income Tax?	02-19-2019
Table for Percentage Computation Method of Withholding	05-21-2024
Table for Wage Bracket Method of Withholding	05-21-2024