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Idaho State Taxes: What You’ll Owe in the 2026 Tax Season

Valerie Bauman,

AARP

Published February 11, 2026

a man’s hands on a calculator and holding money

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Idaho is among the handful of states that has a flat income tax rate. It also has the third-lowest property taxes in the country, according to the Tax Foundation.

The big picture:

Income tax: 5.3 percent flat tax
Property tax: A statewide average of 0.48 percent in 2023, according to the Tax Foundation
Sales tax: 6 percent

How is income taxed?

Idaho has a 5.3 percent flat tax.

What about investment income?

Capital gains and investment income are taxed at 5.3 percent for 2025, after any deduction is applied. Idaho allows a deduction of up to 60 percent of the capital gain net income from the sale or exchange of qualifying Idaho property.

Does Idaho tax Social Security benefits?

No.

How is property taxed?

Property tax in Idaho was taxed at an average of 0.48 percent of assessed value in 2023, according to the Tax Foundation. Property is taxed at the county level, with rates ranging from 0.29 percent in Clark County to 0.87 percent in Nez Perce County. The lowest median property taxes paid was $592 in Clark County, while the highest was $2,643 in Ada County.

What about sales and other taxes?

Sales tax: Idaho has a 6 percent sales tax. Some items may be exempt from sales tax, including prescriptions and medical products. Find more information about exemptions here.

Gas and diesel: Both are taxed at 33 cents per gallon, including a 1-cent fee for the cleanup of any potential fuel spills.

Vehicle tax: Vehicles are taxed at the state’s 6 percent sales tax rate and may have additional local sales tax. Registration fees vary depending on the age of the vehicle and its engine type (internal combustion, hybrid or electric). You can calculate your registration fees by entering your vehicle information into the state’s registration calculator. Registrations include administration fees, which vary by county.

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Alcohol: Distilled spirits are sold exclusively through the Idaho State Liquor Division and its contract stores, which collect sales tax on all liquor sales. Spirits/liquor are taxed at a rate of approximately $12.94 per gallon. Additionally, wholesalers and distributors are charged taxes on beer: 15 cents per gallon if the beer is below 5 percent alcohol by volume. Wineries/cideries, distributors and direct shippers also pay a tax on wine of 45 cents per gallon. Additionally, the state’s 6 percent sales tax also applies to all alcohol purchases.

Lottery: The Idaho Lottery automatically withholds federal and state income taxes from winnings above $5,000. The federal tax withholding rate is 24 percent, and the Idaho tax rate is 5.3 percent. The Lottery is also required to report winnings of $600 or more to the IRS and the Idaho State Tax Commission.

Will my heirs or my estate have to pay state inheritance or estate taxes?

Idaho has no estate or inheritance tax.

Are there any tax breaks for older residents?

Property tax reduction: Older residents who meet certain criteria can qualify for Idaho’s Property Tax Reduction program, also known as the “circuit breaker.” The program can reduce a homeowner’s property taxes on their residence and up to one acre of land by $250 to $1,500. To qualify, the property must be your primary residence. You must also be 65 or older and have 2025 income of $39,130 or less, after deducting medical expenses. To learn more, visit the Idaho State Tax Commission’s website.

Homeowner’s Exemption: Homeowners may apply for an exemption through their local county assessor’s office. The exemption reduces the assessed value of a homeowner’s primary residence and up to one acre of land by 50 percent, up to a maximum of a $125,000.

Property Tax Benefit for Disabled Veterans: To be eligible for this benefit, you must be an Idaho resident, homeowner and qualified veteran with a 100 percent service-connected disability. The program could reduce the property taxes on your home and up to one acre of land by as much as $1,500. The benefit has no income limit. You must obtain a letter from the U.S. Department of Veterans Affairs that verifies your 100 percent service-related disability rating, or your 100 percent compensation due to individual unemployability, as of Jan. 1, 2026. Learn more here.

Are military benefits taxed?

Military retirement benefits are taxed at 5.3 percent for 2025 after any deduction. You may be eligible for a deduction on your military retirement benefits if you are 62 or older, disabled, or have worked enough during the year to be required to file a federal tax return. If you are married, you must file jointly to get this deduction. The maximum amounts you can deduct are $72,324 if you’re married and filing jointly, or $48,216 if you’re single.

What is the deadline for filing Idaho taxes in 2026?

The deadline to file your 2025 tax return is April 15, 2026.

More AARP Financial Resources

AARP Retirement Calculator Determine if you are saving enough to retire when — and how — you want.
AARP’s Social Security Calculator Figure out when to claim and how to maximize your Social Security benefits.
AARP Tax Tools Explore resources to help you calculate and prepare taxes.

Valerie Bauman is a journalist and author with two decades of experience working for publications, including Newsweek, Bloomberg and The Associated Press. Throughout her career, she’s covered politics and the law, including pharmaceutical litigation, mass torts and election law.