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: