Idaho tax deductions and write-offs (2026)

Partly. Military retirees who are 62 or older, disabled, or (under 62) working enough to have to file a federal return can deduct military retired pay up to a cap tied to the maximum Social Security benefit. For 2025 the cap is $48,216 single or $72,324 joint, reduced by any Social Security or Railroad Retirement benefits received. The 2025 laws HB 40 and HB 479 dropped the old age 65 requirement for military retirees, effective 2025. The 2026 cap had not been published when we checked; it is indexed annually. Unremarried surviving spouses can also qualify. Other retirement income: Private pensions and 401(k)/IRA withdrawals are taxed at Idaho's flat rate with no general retirement exclusion.

Yes. Private pensions and 401(k)/IRA withdrawals are taxed at Idaho's flat rate with no general retirement exclusion. The 2026 maximum is indexed to the Social Security wage base;.

No. Idaho does not tax Social Security benefits, regardless of age or income; the federally taxable amount is subtracted on Form 39R.

No: Idaho doesn't offer a state earned income credit. No state earned income tax credit as of tax year 2026. A related break for older or lower-income homeowners: Property Tax Reduction (circuit breaker) up to $1,500 for 65+, disabled, widowed, and others with 2025 income of $39,130 or less.

Only instead of income tax: itemizers in Idaho pick sales tax (6% state rate, about 6.03% with local taxes) or state income tax, whichever is bigger. Groceries are taxed at the full 6% rate; residents receive a refundable food tax credit of $155 per person (or up to $250 with receipts) to offset it.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Idaho adds its own break: Property Tax Reduction (circuit breaker) up to $1,500 for 65+, disabled, widowed, and others with 2025 income of $39,130 or less.

No: Idaho doesn't offer a renter's credit or rent rebate. Idaho has no state tax credit or rebate specifically for renters. Idaho's Property Tax Reduction (circuit breaker) program requires owning and living in your home; renters can still claim Idaho's refundable grocery credit on their income tax return. Renters who itemize federally can deduct sales tax (6% state rate, about 6.03% with local) or Idaho income tax, whichever is bigger.

No: Idaho doesn't base registration on your car's value, so it isn't deductible as personal property tax. Passenger vehicles pay $69 (1-2 years old), $57 (3-6 years) or $45 (7+ years) per year regardless of value.

Idaho has a flat 5.3% income tax and a grocery credit to offset sales tax on food.

Yes on your Idaho return: $6,000 single / $12,000 joint per return. Only contributions to the state's own plan count. Rollovers out to another state's plan are taxed to the extent deducted in the current and prior year.

No: Idaho doesn't offer a state child tax credit. Idaho's $205-per-child nonrefundable Child Tax Credit expired after 2025 (Idaho Code 63-3029L). A 2026 bill to make it permanent (S1450) stalled in committee, and the Tax Commission confirmed the sunset. Idaho has no care credit but allows a deduction of up to $12,000 for dependent care expenses that qualify for the federal credit.

Yes, as a business expense: Idaho charges $100 online / $120 paper to form an LLC; ongoing: $0 annual report. Due by end of the anniversary month; failure to file leads to administrative dissolution.