Idaho State Tax Credits and Deductions

Idaho offers a range of tax credits and deductions designed to help residents reduce their tax liabilities while promoting economic growth and community support. From incentives for charitable donations and energy-efficient investments to deductions for medical expenses and mortgage interest, understanding these opportunities can significantly impact your financial planning. By leveraging the available credits and deductions, Idaho taxpayers can not only lower their tax bills but also contribute to the state’s development and environmental sustainability. This guide provides detailed descriptions of each tax credit and deduction available in Idaho, helping you to navigate and utilize them effectively to maximize your savings.

Idaho State Tax Credits

Grocery Credit

The Grocery Credit is designed to offset the sales tax on food purchased for home consumption. The credit amount varies depending on the taxpayer’s age and income level.

Eligibility: All full-year residents are eligible, and the credit amount increases for seniors aged 65 and older.

Amount: The base credit is $100 per person, while seniors aged 65 or older receive an additional $20, making their credit $120 per person.

Child Tax Credit

This Child Tax Credit provides relief to taxpayers with dependent children. It is a nonrefundable credit that can reduce the state income tax liability.

Eligibility: Taxpayers with dependent children under the age of 17 who qualify for the federal child tax credit are eligible.

Amount: The credit is $205 per qualifying child.

Investment Tax Credit

The Investment Tax Credit encourages businesses to invest in new equipment and tangible personal property.

Eligibility: Businesses that purchase qualifying new equipment or property for use in Idaho.

Amount: The credit is 3% of the cost of new equipment and tangible personal property, with a limit of 50% of the tax liability after other credits.

School Donation Tax Credit

The School Donation Tax Credit supports donations to educational entities, including public and private schools, libraries, and educational foundations.

Eligibility: Individuals and businesses that make qualifying donations to Idaho educational institutions.

Amount: The credit is 50% of the donation amount, with a maximum credit of $500 for individuals and $1,000 for married couples filing jointly.

Youth and Rehabilitation Facilities Credit

The Youth and Rehabilitation Facilities Credit incentivizes donations to youth and rehabilitation facilities in Idaho.

Eligibility: Taxpayers who donate to qualifying youth and rehabilitation facilities.

Amount: The credit is 50% of the donation amount, with a maximum credit of $100 for individuals and $200 for married couples filing jointly.

Research Activities Credit

The Research Activities Credit encourages businesses to engage in research and development activities within the state.

Eligibility: Businesses conducting qualified research activities in Idaho.

Amount: The credit is 5% of qualified research expenditures that exceed a base amount.

Alternative Fuel Tax Credit

The Alternative Fuel Tax Credit promotes the use of alternative fuels by offsetting the cost of equipment and facilities necessary for refueling vehicles with alternative fuels.

Eligibility: Businesses and individuals that purchase and install qualified alternative fuel refueling equipment.

Amount: The credit is 50% of the cost of qualified equipment, up to a maximum of $1,000 for individuals and $10,000 for businesses.

Historic Preservation Tax Credit

The Historic Preservation Tax Credit supports the preservation and rehabilitation of historic buildings.

Eligibility: Property owners who incur expenses in the rehabilitation of certified historic structures.

Amount: The credit is 20% of the qualified rehabilitation expenses, consistent with the federal historic preservation tax credit.

Idaho State Tax Deductions

Standard Deduction

The standard deduction is a fixed dollar amount that reduces the income on which you are taxed. Idaho follows the federal standard deduction amounts.

Amount: For the 2024 tax year, the standard deduction amounts are:

• $12,950 for single filers and married individuals filing separately.
• $25,900 for married couples filing jointly.
• $19,400 for heads of household.
• Itemized Deductions

Taxpayers can choose to itemize deductions instead of taking the standard deduction. Itemized deductions include expenses such as medical expenses, mortgage interest, charitable contributions, and state and local taxes.

Eligibility: Taxpayers whose total itemized deductions exceed the standard deduction amount.

Medical Expense Deduction

Idaho allows taxpayers to deduct qualified medical expenses that exceed 10% of their adjusted gross income (AGI).

Eligibility: Taxpayers with high medical expenses relative to their income.

Mortgage Interest Deduction

Taxpayers can deduct interest paid on a mortgage for their primary residence or second home.

Eligibility: Homeowners who pay mortgage interest on a qualified home loan.

Charitable Contributions Deduction

Taxpayers can deduct donations made to qualifying charitable organizations.

Eligibility: Taxpayers who make charitable contributions to eligible organizations and choose to itemize deductions.

State and Local Taxes Deduction

Taxpayers can deduct state and local income taxes or state and local sales taxes, as well as property taxes paid during the tax year.

Eligibility: Taxpayers who choose to itemize deductions.

Casualty and Theft Losses Deduction

Taxpayers can deduct losses resulting from theft, vandalism, fire, storm, or other casualties.

Eligibility: Taxpayers who suffer a qualifying loss and choose to itemize deductions.