Idaho Tax Calculator 2026 — 5.8% Flat Income Tax Rate

Q: What is Idaho's income tax rate in 2026?

Idaho has a flat income tax rate of 5.8%. This was implemented in 2023 when Idaho converted from a graduated system with rates up to 6.5% to the current flat rate. Idaho uses federal taxable income as its starting point, conforming to the federal standard deduction, which simplifies filing for most residents.

Q: What is Idaho's sales tax rate?

Idaho's state sales tax rate is 6.0%. Local jurisdictions can add small additional taxes, bringing the average combined rate to approximately 6.02%. Groceries are taxed at the full rate in Idaho, unlike most states. Idaho does not hold sales tax holidays.

Q: Does Idaho tax groceries?

Yes, Idaho taxes groceries at the full 6% state sales tax rate, making it one of only a handful of states that fully tax food purchases. To offset this burden, Idaho provides a grocery tax credit of $100 per person ($120 for those 65 and older) on the state income tax return, which partially compensates lower-income families.

Q: What is Idaho's property tax rate?

Idaho's effective property tax rate is approximately 0.63%, below the national average. However, rapidly rising property values in the Boise metro area and other growing communities have led to significant increases in actual tax bills. Idaho offers a homestead exemption that reduces assessed value by 50% up to $125,000 for owner-occupied primary residences.

Q: Does Idaho tax retirement income?

Idaho taxes most retirement income at the regular 5.8% flat rate, including 401(k) distributions, IRA withdrawals, and private pension payments. Social Security benefits are not taxed. Idaho does not provide a special subtraction for pension or retirement income, making it less retirement-friendly than some neighboring states.

Idaho Tax Calculator

Annual Gross Income ($)

Filing Status

Income Tax
5.8%
flat rate (new)
Sales Tax
6.02%
avg combined
Property Tax
0.63%
below average

Idaho Income Tax

Idaho implemented a flat 5.8% income tax rate effective for the 2023 tax year, replacing a graduated system that had rates ranging from 1% to 6.5%. This represented Idaho's largest-ever tax cut, signed into law by Governor Brad Little in 2022 as House Bill 1. The conversion to a flat tax was part of a broader push among western and southern states to simplify tax systems and attract residents and businesses.

Idaho conforms to the federal tax code and uses federal taxable income as the starting point for state calculations. This means Idaho taxpayers benefit from the federal standard deduction ($14,600 for single filers, $29,200 for married filing jointly in 2024) without needing to calculate a separate state standard deduction. This conformity greatly simplifies the filing process for most Idaho residents.

Idaho does make certain state-specific adjustments. The state provides an additional deduction for Idaho small employer health insurance premiums, allows a subtraction for contributions to Idaho's 529 education savings plans (up to $6,000 per taxpayer), and provides the grocery tax credit. Idaho also conforms to the federal treatment of qualified business income (QBI) deductions, which benefits pass-through business owners.

Idaho Sales Tax

Idaho's state sales tax rate is 6.0%, with minimal local additions bringing the average combined rate to approximately 6.02%. Idaho has one of the more uniform sales tax structures in the nation, with very few local jurisdictions adding their own taxes. This makes the sales tax predictable and straightforward across the state.

One notable feature of Idaho's sales tax is that it applies to groceries at the full 6% rate. Idaho is one of only a handful of states that fully taxes food purchases. To offset this burden, the state provides a grocery tax credit of $100 per person ($120 for residents aged 65 and older) on the state income tax return. For a family of four, this $400 credit covers the sales tax on approximately $6,700 in grocery purchases. Beyond groceries, Idaho exempts prescription medications from sales tax but taxes over-the-counter drugs. Clothing, electronics, and most other consumer goods are fully taxable.

Idaho Property Tax

Idaho's effective property tax rate is approximately 0.63%, below the national average. However, Idaho's booming population growth and rapidly rising property values, particularly in the Boise-Nampa-Meridian metro area, have caused actual property tax bills to increase significantly in recent years. The median home value in the Boise area has more than doubled since 2015, leading to political pressure for property tax relief.

Idaho offers a homestead exemption that reduces the assessed value of an owner-occupied primary residence by 50%, up to a maximum reduction of $125,000 in assessed value. This exemption applies to the land and home combined. For seniors aged 65 and older (or disabled or widowed individuals) with household income under $35,632, Idaho provides the "Circuit Breaker" property tax reduction program that can reduce property taxes by up to $1,500 per year. The legislature has also passed temporary property tax relief measures in response to rapidly rising valuations.

Idaho's Growth and Tax Competitiveness

Idaho has been one of the fastest-growing states in the nation, with particularly strong migration from California, Oregon, and Washington. The state's lower cost of living, lower taxes, and quality of life have attracted both individuals and businesses. The move to a flat 5.8% tax rate was explicitly designed to enhance Idaho's competitiveness with neighboring states. Between 2020 and 2024, Idaho's population grew by over 8%, driven largely by domestic migration.

The influx of higher-earning residents from high-tax states has actually boosted Idaho's tax revenue, helping to fund the rate reduction. However, the rapid growth has also created challenges including housing affordability, infrastructure strain, and increased demand for public services. Idaho has used its revenue surplus to invest in education, transportation, and tax relief simultaneously.

Idaho Outdoor Recreation and Tax Credits

Idaho offers several tax credits related to its natural resources and outdoor economy. The state provides a youth hunting license credit and various agricultural tax exemptions reflecting Idaho's significant farming and ranching industries. Idaho's agricultural exemptions include machinery, irrigation equipment, and livestock feed. The state also does not tax timber value until harvest. These provisions reflect Idaho's strong connection to its natural resource economy, which employs a significant portion of the rural workforce.

Idaho vs. Neighboring States

Washington — Washington has no income tax, a clear advantage over Idaho's 5.8%. However, Washington's combined sales tax (10.25% avg) is dramatically higher, and property tax (0.84%) is slightly higher. High earners save significantly in Washington; moderate earners may be comparable.
Oregon — Oregon has graduated income tax rates up to 9.9%, much higher than Idaho's 5.8% flat rate. Oregon has no sales tax, which is a major advantage. Property tax is 0.87%. Idaho is better for income tax; Oregon is better for consumption taxes. Overall, Idaho is more favorable for most earners.
Montana — Montana has graduated rates up to 6.75%, higher than Idaho. Montana has no sales tax and a property tax of 0.74%. Idaho has a lower income tax rate but adds 6% sales tax. The comparison depends on spending patterns.
Utah — Utah's flat rate of 4.65% is lower than Idaho's 5.8%. Sales tax (7.19% avg) is slightly higher, and property tax (0.58%) is comparable. Utah is slightly more tax-friendly overall.
Wyoming — Wyoming has no income tax and no corporate tax. Sales tax is 5.36% average, and property tax is 0.56%. Wyoming is more tax-friendly across the board but has fewer services and job opportunities.
Nevada — Nevada has no income tax and 8.24% average sales tax. Property tax is 0.53%. Nevada is better for income tax; Idaho is better on sales tax.

Frequently Asked Questions

What is Idaho's income tax rate in 2026?

Idaho has a flat 5.8% income tax rate, implemented in 2023 to replace a graduated system with rates up to 6.5%. Idaho uses federal taxable income as its starting point, conforming to the federal standard deduction.

What is Idaho's sales tax rate?

Idaho's state rate is 6.0%, with minimal local additions averaging about 6.02% combined. Groceries are taxed at the full rate, but the state provides a $100 per person grocery tax credit ($120 for those 65+).

Does Idaho tax groceries?

Yes, Idaho taxes groceries at the full 6% rate. To offset this, the state provides a grocery tax credit of $100 per person ($120 for age 65+) on the income tax return, partially compensating lower-income families.

What is Idaho's property tax rate?

Idaho's effective rate is about 0.63%. A homestead exemption reduces assessed value by 50% (up to $125,000) for primary residences. Rising home values, especially in Boise, have increased actual tax bills significantly.

Does Idaho tax retirement income?

Most retirement income is taxed at the flat 5.8% rate, including 401(k) and IRA distributions. Social Security benefits are exempt. Idaho does not provide a special pension subtraction, making it less retirement-friendly than some states.