taxnews.ey.comPrint

16 May 2025

Idaho Tax Commission updates income tax withholding formula to reflect 2025 tax cut

The Idaho Tax Commission has updated its Table for Percentage Computation Method of Withholding to reflect the drop in the personal income tax rate from 5.695% to 5.3%, which took effect retroactive to January 1, 2025, under H.B. 40.

In 2025, Idaho lawmakers passed the largest tax cut in the state's history and retroactively lowered the personal income tax rate for the fourth consecutive year. (See Tax Alert 2025-0705 for more information.)

Ernst & Young LLP insights

Employers should implement the updated Idaho withholding formula as soon as possible and suggest that employees review their Idaho ID W-4 in light of the 2025 income tax rate change.

* * * * * * * * * *
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: 2025-1070

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2025, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement