TaxtirementState guides · ID
How Idaho taxes retirement income
- Idaho doesn't tax Social Security benefits.
- Exclusions and subtractions for retirement income (details below):
- Retirement benefits deduction (Form 39R Part B line 8) — narrow: only specific public pensions: from age 65, a dollar limit (see below), income limits apply.
- Military retirement benefits deduction: from age 62.
- Rates for 2026: 0% to 5.3%, graduated.
At a glance
| Income tax | Yes |
|---|---|
| Rates (2026) | 0% to 5.3%, graduated |
| Starts from | Federal adjusted gross income (AGI) |
| Standard deduction | $16,100 single, $32,200 married filing jointly (same as federal) |
| Age 65 and older | $1,650 extra deduction per person |
| Social Security | Not taxed |
| Retirement income exclusions | 2 (see below) |
| Roth conversions | Taxable |
| Capital gains | Special treatment (see below) |
| Local income tax | None |
Tax rates
Brackets apply to Idaho taxable income. Other filing statuses are in the rules reference.
| Rate | Single: taxable income | Married filing jointly: taxable income |
|---|---|---|
| 0% | $0 to $4,937 | $0 to $9,875 |
| 5.3% | $4,937 and up | $9,875 and up |
Social Security
Idaho doesn't tax Social Security benefits.
Pensions, IRAs and 401(k)s
Retirement benefits deduction (Form 39R Part B line 8) — narrow: only specific public pensions
Age 65+, or 62+ and disabled. Deduction = lesser of (cap - SS/RR benefits received) or qualifying benefits included in federal income. FERS annuities, PERSI Base Plan, private pensions, IRAs, 401(k)s and Roth conversions do NOT qualify. The cap equals the maximum annual Social Security benefit (single) and 150% of it (joint).
Income limit: Cap is per return, not per person: 2025 $48,216 single / $72,324 married filing jointly, reduced dollar-for-dollar by Social Security and Railroad Retirement benefits received by the taxpayer and spouse (gross Box 5 amounts). MFS filers cannot claim it.
Military retirement benefits deduction (Form 39R line 8e, retired service members)
Qualifying retired service members age 62+ (or disabled at any age, or under 62 employed with a federal filing requirement) may deduct military retirement benefits included in federal income; under HB 40 (2025) no longer reduced by Social Security. Details beyond scope for most households.
Roth conversions
A Roth conversion counts as taxable income for Idaho. Whether a retirement income exclusion can cover part of it depends on the rules above.
Capital gains
Ordinary, except a 60% deduction (Form CG) for capital gain net income from qualified Idaho property: Idaho real property held 12+ months, tangible personal property used in an Idaho revenue-producing enterprise held 12+ months, certain livestock, timber held 24+ months, certain partnership interests. Gains on stocks, bonds, mutual funds and other intangibles do NOT qualify.
Credits and relief for older residents
- Food Tax Credit (formerly grocery credit): refundable $155 per person (taxpayer, spouse, dependents) for full-year residents, or actual Idaho sales tax on qualifying food up to $250 per person with receipts; persons 65+ not required to file can claim on Form 24.
- Credit for maintaining a home for a family member 65+ (not self/spouse) — Form 40 line 44.
More detail from our research notes
Idaho tax = (Idaho taxable income - threshold) x 5.3%. 2025 worksheet thresholds $4,811 single/MFS, $9,622 joint/HOH/QSS. 2026 thresholds stored: $4,937 single/MFS, $9,875 joint/HOH/QSS, derived by Idaho Code 63-3024(3) : base $2,500 / $5,000 (63-3024(2)(a)-(b)) x CPI-U annual average of the preceding year / CPI-U 1998, truncated to whole dollars. BLS CPI-U (CUUR0000SA0) 2025 annual average 321.943 ( M13); 1998 average 163.0 ( mean of the 12 months 163.008): 2,500 x 321.943 / 163.0 = 4,937.78 -> $4,937; 5,000 x 321.943 / 163.0 = 9,875.55 -> $9,875. The formula reproduces the published 2025 values (2,500 x 313.689 / 163.0 = 4,811.18 -> $4,811; 9,622.36 -> $9,622) and 2024's $9,346 (5,000 x 304.702 / 163.0 = 9,346.69, showing truncation). See research/verification/pe-triage/west.md ID-2. The 5.3% rate (HB 40, 2025) continues for 2026 — the 2026 withholding tables (July 2026) still use 5.3%. Idaho conforms to the IRC as of January 1, 2026 (HB 559, signed Feb 2026, retroactive to 2025): federal standard deduction (OBBBA amounts; 2025 worksheet $15,750/$31,500/$23,625; 2026 federal $16,100/$32,200/$24,150 stored), federal additional aged/blind amounts, and Schedule 1-A deductions (enhanced $6,000 senior deduction, tips, overtime, car loan interest) all flow through. Itemized deductions = federal Schedule A less state/local income or sales taxes. Taxable Social Security and Railroad Retirement are subtracted (39R line 7). Pensions, IRA/401(k) distributions and Roth conversions are fully taxable except the narrow public-pension deduction above. Idaho Child Tax Credit sunset for 2026.
Pending confirmation
These points were still being confirmed against Idaho's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.
4 items
- 2026 zero-tax bracket thresholds $4,937 / $9,875 are derived from Idaho Code 63-3024(3) and the BLS 2025 CPI-U average (see notes; uncertainty about +/-$1 from rounding); confirm on the 2026 Form 40 tax worksheet (EIN00046 for 2026, expected Jan 2027, https://tax.idaho.gov/forms).
- 2026 Idaho standard deduction assumed equal to federal 2026 amounts ($16,100/$32,200/$24,150; add'l 65+ $1,650 married / $2,050 unmarried per Rev. Proc. 2025-32 sec. 4.15(3)) based on IRC conformity (HB 559, 2026); confirm with 2026 Form 40 instructions (Jan 2027).
- 2026 retirement benefits deduction caps (2025: $48,216 / $72,324); 2026 should equal the 2026 SS maximum annual benefit at FRA ($4,152 x 12 = $49,824) and 150% ($74,736) - not yet published; 2026 Form 39R instructions expected Jan 2027 (https://tax.idaho.gov/forms).
- Military retirement deduction details (HB 40 changes) not fully captured.
Sources
Every figure comes from these documents, mostly the state's own forms, instructions and statutes.
- 2025 Individual Income Tax Instructions (rev. 03-02-2026): 5.3% rate, $4,811/$9,622 tax worksheet, standard deduction worksheet, 65+ amounts, Food Tax Credit $155, IRC conformity date; Itemized deductions (Form 40 lines 13-16: Schedule A less income tax, 5a if 5d within the cap else 5e - 5b - 5c; Idaho standard = federal) and Form 39R line 18 health insurance premiums worksheet (2025 Form 40 instructions EIN00046 pp. 7-8, 34-35)https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_03-02-2026.pdf
- 2025 Form 39R and instructions: SS subtraction line 7, retirement benefits deduction line 8 ($48,216/$72,324, qualifications), capital gains deduction line 10https://tax.idaho.gov/wp-content/uploads/forms/EFO00088/EFO00088_03-02-2026.pdf
- 2026 withholding tables (5.3% slope; child tax credit sunset)https://tax.idaho.gov/wp-content/uploads/pubs/EPB00745/EPB00745_07-23-2026.pdf
- Withholding tables updated for 2026 (press release, July 31, 2026)https://tax.idaho.gov/pressrelease/withholding-tables-updated-for-2026/
- HB 559 conformity deductions (senior, tips, overtime, car loan) — press releasehttps://tax.idaho.gov/pressrelease/file-now-to-get-your-conformity-deductions/
- Idaho Code 63-3024 (2)-(3): 5.3% over $2,500 / $5,000 (joint, HOH), thresholds indexed by annual CPI-U over 1998 CPI-U ; BLS CPI-U series CUUR0000SA0 2025 annual average 321.943 and 1998https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3024/
- Federal 2026 standard deduction ($16,100/$32,200/$24,150) and additional aged/blind amounts, which Idaho adoptshttps://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
- federalStandardDeduction*, federalAged*: 2026 federal standard deduction and additional amounts, Rev. Proc. 2025-32 sec. 4.15; IRS Rev. Proc. 2025-32 sec. 4.15(3): 2026 additional standard deduction $1,650, $2,050 if unmarriedhttps://www.irs.gov/pub/irs-drop/rp-25-32.pdf
- Idaho Code 63-3024 as of 2026-10-02: 5.3% over $2,500/$5,000, CPI-indexed thresholds; last amended 2025 ch. 13 (HB 40). No 2026 act changed the ratehttps://legislature.idaho.gov/statutesrules/idstat/title63/t63ch30/sect63-3024/
Taxtirement's Idaho calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.
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This page summarizes Idaho's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.