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Tool | October 2015

State-by-State Guide to Taxes on Retirees

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Idaho

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The Bottom Line
Map of Idaho

Mixed Tax Picture

The Gem State taxes all income, except Social Security and Railroad Retirement benefits. Its top tax rate of 7.4% applies to taxable income of $21,436 and above for joint filers. However, there is a generous retirement-benefits deduction for those with qualifying public pensions. A homeowner's primary residence is eligible for an exemption of up to 50% of assessed value. Idaho does not have an inheritance tax or estate tax.

State Sales Tax

6% (prescription drugs are exempt). Some resort localities can add a tax of up to 3%.

Income Tax Range

Low: 1.6% (on taxable income up to $2,858 for married joint filers and up to $1,429 for individual filers)

High: 7.4% (on taxable income of $21,436 or more for married joint filers and $10,718 or more for individual filers)

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Idaho does not tax Railroad Retirement benefits. It offers a retirement-benefits deduction if you are age 65 or older and receive qualifying retirement benefits -- a civil-service pension, Idaho firefighters pension, an Idaho city police pension or military pension. The amount deducted must be reduced by Social Security retirement benefits and Railroad Retirement benefits. The maximum amount for 2014 that could be deducted by married couples filing jointly (age 65 or older) was $47,556, and for singles (age 65 or older), $31,704.

IRAs

Taxable at ordinary income tax rates.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Taxable at ordinary income tax rates.

Private Pensions

Taxable at ordinary income tax rates.

Public Pensions

Idaho offers a retirement-benefits deduction if you are age 65 or older and receive qualifying retirement benefits -- a civil-service pension, Idaho firefighters pension, an Idaho city police pension or military pension. The amount deducted must be reduced by Social Security retirement benefits and Railroad Retirement benefits. The maximum amount for 2014 that could be deducted by married couples filing jointly (age 65 or older) was $47,556, and for singles (age 65 or older), $31,704.

Property Taxes

A homeowner's primary residence is eligible for an exemption of 50% of the assessed value of the home, up to a maximum of $89,580 for 2015. Median property tax on Idaho's median home value of $159,000 is $1,188, according to the Tax Foundation.

Tax breaks for seniors: If you are a qualified Idaho homeowner, you may be eligible for property tax relief. To qualify, you must own and occupy the home as your primary residence, meet income requirements and be either age 65 or older, a widow or widower, blind, a former prisoner of war, a fatherless or motherless minor, or a qualifying disabled person. This program may reduce property taxes on your home and up to one acre of land by as much as $1,320.

Idaho also has a property-tax deferral program that allows eligible applicants to temporarily defer property taxes on their home and up to one acre of land. Residents must live in a primary-residence home or mobile home and have lived there since before April 15, 2015. They must meet one of seven requirements, two of which are being 65 or older or being a widow or widower. They also must have an income of $42,776 or less. Despite the deferral, taxes and interest must eventually be repaid to the state.

Inheritance and
Estate Taxes

There is no inheritance tax or estate tax.


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