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July 21, 2021

Idaho law adjusts 2021 personal income tax rates and brackets, revised 2021 income tax withholding tables issued

In May 2021, Idaho Governor Brad Little signed into law H.B. 380 which, effective retroactive to January 1, 2021, lowers the top personal income tax rate from 6.925% to 6.5%, reduces the income tax brackets from seven to five and provides Idaho income taxpayers with a one-time nontaxable sales/income tax rebate.

To accommodate the personal income tax adjustments under H.B. 380, the Idaho State Tax Commission (STC) issued revised 2021 income tax withholding tables which employers are instructed to implement as soon as possible. Employers are not required to make retroactive adjustments to Idaho income tax withheld prior to their implementation of the revised income tax withholding tables. (Table for Percentage Computation Method of Withholding, rev. 7/7/2021; Table for Wage Bracket Method of Withholding, rev. 7/13/2021.)

Supplemental rate income tax withholding

According to the STC website, effective immediately, the supplemental rate of income tax withholding is lowered from 6.925% to 6.5%.

This supplemental rate may be used to compute Idaho income tax withholding on bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay, and other similar payments. Alternatively, the employer can combine the supplemental wage payment with regular wages and compute Idaho income tax withholding on the combined amount.

Idaho Form ID W-4

While the STC accepts the federal Form W-4 for computing Idaho income tax withholding, employees are encouraged to use Idaho Form ID W-4 (rev. 12-22-2020) to achieve a more accurate withholding result.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (


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