Idaho’s 5.3% rate and its Idaho-property deduction
Idaho taxes income above a small indexed floor at one rate, 5.3%. Gains from ordinary investments such as stocks, funds or out-of-state property are taxed at that rate once they reach Idaho taxable income.
Idaho property is treated differently. A 60% deduction is available for gains on qualifying Idaho real property held at least 12 months, and on certain Idaho business property, livestock and timber held for longer periods. On an eligible Idaho land sale, that cuts the effective state rate to roughly 2.1%. The deduction does not reach shares of a publicly traded company. Because the 2026 indexed floor was not yet published at review, the calculator asks for it rather than guessing.
| Parameter | Value | Effective | Primary source |
|---|---|---|---|
| Individual income tax rate | 5.3% of taxable income above the indexed floor | Current section, last amended 2025 | Idaho Code 63-3024(2) |
| Floor written in the statute | $2,500 single; $5,000 joint, with heads of household and surviving spouses treated as joint | Adjusted every year by the Tax Commission’s inflation factor | Idaho Code 63-3024(2)–(3) |
| Latest published indexed floor | $4,811 single; $9,622 married | Tax year 2025; no 2026 row on the schedule at the October 12 review | Idaho State Tax Commission rate schedule |
| Capital gains deduction | 60% of capital gain net income from qualified Idaho property, capped at the capital gain net income in taxable income | Every taxable year after 2001 | Idaho Code 63-3022H(1)–(2) |
| Qualified property, main types | Idaho real property held 12 months; tangible property used 12 months by an Idaho business; breeding cattle or horses and Idaho timber held 24 months | Idaho situs at the time of sale | Idaho Code 63-3022H(3) |
| Return worksheet | Net qualifying gain after loss carryover × 60%, limited to capital gain net income in federal AGI | 2025 form, lines 8–11 | Idaho Form CG |
Idaho’s rate requires an approved current-year indexed floor
Idaho’s current section 63-3024 specifies a 5.3% rate above a filing-status-dependent annually indexed zero-tax floor. That floor is part of the formula, not an optional deduction. The Tax Commission’s most recent annual instructions at the October 2 review are for 2025, with $4,811 / $9,622 figures; a verified final 2026 annual floor was not established from those instructions. This calculator therefore requires the independently approved actual 2026 threshold and leaves tax unknown when it is blank.
Idaho’s capital-gain deduction is limited to qualifying Idaho property under section 63-3022H. Eligible property types, holding periods, location and netting must be checked on the state capital-gain worksheet; the 60% deduction is not a blanket exclusion for ordinary portfolio stock. Separately reconcile any applicable precious-metal treatment and state basis before preparing taxable income. Prior-year CG instructions retain their actual printed year.
Enter approved Idaho taxable income, the current-year indexed floor for the actual state filing status, and complete usable credits in both annual scenarios. The rate estimate taxes only positive excess over that floor. A sale does not automatically populate any of these state fields. Unsupported return effects and unavailable annual parameters can instead be reflected in independently prepared final state liabilities.
Idaho preparation checklist
- Independently approved actual 2026 indexed threshold; no substitution of 2025 figures
- Qualifying Idaho property and holding period
- Surviving-spouse joint floor category