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Tool | August 2013

State-by-State Guide to Taxes on Retirees

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The Bottom Line
Map of Idaho


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 $21,136 and above. However, seniors get a generous retirement-benefits deduction. Property is assessed at full market value, but your 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 Idaho resort cities, counties and auditorium districts have a local option sales tax, in addition to the state sales tax, which can add 0.5% to 5%, depending on the area.

Income Tax Range

Low: 1.6% (on taxable income up to $2,818 for married joint filers and up to $1,409 for individual filers)

High: 7.4% (on taxable income of $21,136 or more for married joint filers and $10,568 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, such as a civil-service pension or military pension. The amount deducted must be reduced by retirement benefits paid under the Federal Social Security Act and the Federal Railroad Retirement Act. The maximum amount that may currently be deducted by married couples filing jointly (age 65 or older) is $45,234, and for singles (age 65 or older), $30,156.

Property Taxes

Property is assessed at its full market value. A general property tax is imposed for local purposes. The state property tax is suspended as long as the sales and use tax are in effect. A homeowner's primary residence is eligible for an exemption of 50% of the assessed value of the home, up to a maximum of $81,000 for 2013. Median property tax on the state's median home value of $171,700 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, 2013. 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 $41,440 or less. Despite the deferral, though, 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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