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Idaho Retirement Benefits Deduction

Idaho allows limited deductions for certain pensions. Even if you qualify, you generally can’t deduct the full amount or your benefits. Each year the state recalculates the maximum allowed.

For more information beyond this page, see the instructions for individual income tax, Part B –  Subtractions. Look for the subsection for Retirement Benefits Deduction for Qualified Retirement Benefits. This subsection also includes definitions, such as what “disabled” means.

Federal pensions and the deduction

Some federal pensions might qualify for the deduction from Idaho income tax. You as the pensioner might qualify if all of these are true:

  • You’re at least 65, or at least 62 and disabled.
  • You’re filing jointly if you’re married.
  • Your pension is one of these:
    • From the U.S. military.
    • Under the Foreign Service Retirement and Disability System (FSRDS).
    • Under the Civil Service Retirement System (CSRS). See the instructions to determine if your pension is from CSRS (not the Federal Employees Retirement System, or FERS).

Surviving spouse benefits: You might qualify for the deduction if you receive your deceased spouse’s federal pension from one of the sources listed above. You can’t have remarried, and you must be at least 65, or at least 62 and disabled.

Idaho pensions and the deduction

Only a very few Idaho pensions qualify for the deduction from Idaho income tax. You as the pensioner might qualify if all of these are true:

  • You’re at least 65, or at least 62 and disabled.
  • You’re filing jointly if you’re married.
  • Your pension is one of these:
    • From the Firefighters Retirement Fund (FRF) that the Public Employee Retirement System of Idaho (PERSI) administers.
    • Benefits for a retired police officer of an Idaho city for Idaho employment not included in the federal Social Security retirement system. PERSI administers the benefits.
    • Benefits from a policemen’s retirement fund for retired police officers of an Idaho city. The fund must no longer admit new members as of January 1, 2012. An Idaho city or PERSI must administer the fund.

See the instructions or contact your plan administrator if you have questions about qualifying.

Surviving spouse benefits: You might qualify for the deduction if you receive your deceased spouse’s Idaho pension from one of the sources listed above. You can’t have remarried, and you must be at least 65, or at least 62 and disabled.

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