If you work in Idaho, the state requires that your employer withhold Idaho income tax from your paycheck. The amount withheld depends on your filing status, how many Idaho withholding allowances you claim, and your payroll frequency. To calculate the correct withholding, use the Idaho income tax chart for the year you’re submitting your return, or the federal withholding table for the year you’re filling out Form ID W-4.
Idaho residents are taxed on their total income, including wages, salaries, self-employment, and other business income. Interest, dividends, and capital gains are also taxable, but several deductions are available to reduce your overall tax burden. These include the standard deduction, a child tax credit and a grocery store sales tax refund.
You can use the online calculator on the Idaho Department of Revenue website to determine your state income tax liability. However, it’s best to consult a financial advisor before making any final decisions about your taxes
Idaho State Income Tax Exemptions
Idaho is one of only 16 states that does not have a process for reviewing tax exemptions, also known as preferences. Thus, the state needs help to accurately assess these policies’ effectiveness or estimate their value to taxpayers.
However, The state offers several deductions, including the home mortgage interest deduction and the personal property tax credit. It also provides a deduction for long-term care insurance premiums. The state also allows residents to claim a foreign tax credit on income earned abroad.
Idaho State Income Tax Due Dates
The Idaho State Tax Commission (STC) requires businesses to file returns and pay taxes quarterly, semiannually, or annually. The STC assigns filing and payment frequencies to each business based on its estimated tax liability. Businesses should register with the STC and obtain a permit before tax filing.
The deadline to file 2023 Idaho personal income taxes is April 15. If you can’t file your return by the due date, you can get a six-month extension by paying 80% of your total tax liability or 100% of the amount reported on your previous year’s return.