by Jennifer J. Troyer, Esq.
On September 1, 2022, Idaho Governor Brad Little signed legislation lowering the corporate and personal income tax rates and creating a rebate for personal income taxpayers. (L. 2022, H1 (1st S.S.), generally effective 01/01/2023.)
Corporate income tax rate.
Effective January 3, 2023, the tax rate imposed on corporations is 5.8%, reduced from 6%.
Personal income tax rate.
Effective January 3, 2023, the tax rate imposed on individuals, trusts, and estates is 5.8% of taxable income over $2,500 (over $5,000 for joint returns, surviving spouses, and heads of household). For electing small business trusts, as defined in IRC § 1361, the tax rate is 5.8% of taxable income over $2,500. The income tax threshold is adjusted annually for inflation. Currently, the tax rate is imposed at graduated rates ranging from 1% to 6% on bracket amounts that are annually adjusted for inflation.
Tax rebate.
Effective September 1, 2022, after filing a 2021 Idaho Form 40 (Individual Income Tax Return) or a Form 24 (Grocery Credit Refund) on or before December 31, 2022, full-year Idaho resident taxpayers who also filed in 2020 will be paid a one-time, nontaxable rebate equal to the greater of 10% of the tax amount or $300 per individual return ($600 per joint return).
These changes are in addition to changes made earlier in 2022 to reduce the corporate and personal income tax rates and to create a personal income tax rebate (see State Tax Update, 02/09/2022).
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