Tool | November 2017

State-by-State Guide to Taxes on Retirees

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 $21,810 and above for joint filers. There is a generous retirement-benefits deduction -- but only for those with qualifying public pensions. Idaho does not have an inheritance tax or estate tax.

State Sales Tax

6.0% state levy. Localities (typically resort communities) can add as much as 3%, but the effect on the state average is negible: It's 6.03%. Food is taxable, but the state attempts to offset the levy with a $100 per-person tax credit. Seniors can get $120.

Income Tax Range

Low: 1.6% (on taxable income up to $2,908 for married joint filers and up to $1,454 for individual filers)

High: 7.4% (on taxable income of $21,810 or more for married joint filers and $10,905 or more for individual filers)

Effective income tax rate: 6.4%/individual, 6.7%/joint

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, 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 2016 that could be deducted by married couples filing jointly (age 65 or older) was $47,502, and for singles (age 65 or older), $31,668.

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 -- such as 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 2016 that could be deducted by married couples filing jointly (age 65 or older) was $47,502, and for singles (age 65 or older), $31,668

Property Taxes

The median property tax on Idaho's median home value of $165,300 is $1,243.

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 18, 2016. 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 $43,503 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.