Skip to content
State and Local Tax

Idaho Lowers Income Tax Rates, Creates Rebate

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).

 

Get all the latest tax, accounting, audit, and corporate finance news with Checkpoint Edge. Sign up for a free 7-day trial today.

More answers