18 March 2025 Idaho law lowers personal income tax rate retroactive to January 1, 2025 On March 6, 2025, Idaho Governor Brad Little signed into law H.B. 40, which retroactive to January 1, 2025, lowers the income tax rate for individuals, trusts and estates from 5.695% to 5.3% on income exceeding $2,500 ($5,000 for married persons filing joint). This is the largest tax cut in the state's history according to the Governor's press release and the fourth consecutive year that the Idaho legislature has retroactively lowered its personal income tax rate. - In 2022, H.B. 436 lowered the state's top personal income tax rate from 6.5% to 6.0% for taxpayers that earn $3,000 or more. H.B. 436 also lowered the tax rate from 3.1% to 3.0% for taxpayers earning at least $1,000 but less than $3,000 and eliminated the tax rate of 5.5% that applied to income of at least $4,000 but less than $5,000, effective January 1, 2022.
- In 2023, H.B. 1 replaced the graduated tax rates with a flat rate of 5.8%.
- In 2024, HB. 521 lowered the tax rate from 5.8% to 5.695%.
Ernst & Young LLP insights The revised income tax withholding formula and tables, once available, will be published here. | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: Workforce Tax Services - Employment Tax Advisory Services | | Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor |
Document ID: 2025-0705 |
