Idaho has a 5.8 percent flat individual income tax and a 5.80 percent corporate income tax rate. The state sales tax rate is 6.00 percent. Average combined state and local sales tax rate is 6.02 percent.
Income Tax Brackets and Credits
Idaho income tax rates range from 0 percent to 6.5 percent. Sales tax rate is 6 percent. Tax deductions and credits are available to reduce tax liability. These include a standard deduction, a child tax credit, and a grocery tax credit.
Filing and Payment Procedures
You must file Idaho income tax returns if you are a resident, part-year resident with Idaho income, or a nonresident with Idaho income.
Paying Idaho state income tax involves accessing Idaho’s state tax website to make an electronic payment using the state’s online payment system.
Taxation Overview
Idaho taxes higher earnings at a higher rate. Some retirement income is exempt. Sales taxes are among the lowest in the U.S. However, groceries are taxed. Alcohol, tobacco, and property taxes are also generally low.
Tax-Friendly Features
In 2023, Idaho moved to a single 5.8 percent flat income tax rate on income over certain thresholds. Before, rate tiers were based on income levels. The change simplifies the previous progressive bracketed system.
Idaho offers tax deductions and credits to reduce your tax liability, including a standard deduction, a child tax credit, and a grocery tax credit.
Idaho taxes higher earnings at a higher rate. In 2011, rates for top earners were 7.80% compared to 6.00% in 2022 showing Idaho has lowered rates in the past decade.
If you work in another state but live in Idaho, Idaho taxes that income. Expenses for out-of-state stays may be deductible.