Moving to Idaho

Idaho taxes a resident on everything and a nonresident on Idaho-source income only, and the year you move you are both. You are an Idaho resident if Idaho is your domicile, the permanent home you intend to return to, or if you keep a home in Idaho all year and spend more than 270 days of the year here. A part-year resident files Form 43 with Form 39NR, reports all income received while living in Idaho plus Idaho-source income from the rest of the year, and takes the federal deductions in proportion. A nonresident files Form 43 only if Idaho-source gross income is more than $2,500. Idaho has no reciprocal agreement with any state, so an Idaho resident who works in Oregon or Utah pays both states and takes a credit on Form 39R for the other state’s tax, while one who works in Washington, which has no tax on wages, owes Idaho the full 5.3% with nothing to credit. Pensions and IRA withdrawals are Idaho income only for the months you lived here; wages are Idaho income for the days you worked here.

The move itself is not a tax event. What matters is the date your domicile changed, because that date divides the year on Form 43, and the facts behind it, because the state you left will want to be sure you are gone.

Three kinds of filer

A married couple can have different statuses; Form 43 has a residency box for each spouse. Idaho filing status must match the federal return.

Domicile is the center of your personal and business life, and you have only one. The Idaho State Tax Commission’s guide lists what it looks at when someone claims to have changed it: where your family lives, a comparison of the homes you keep in each place, where you do business, where and how you spend your time, where you keep the things with sentimental value, and whether you gave up your Idaho driver’s license and homeowner’s exemption. Its own example is the person whose family stays in Idaho while he takes a job out of state and comes home periodically; he is still domiciled in Idaho and files as a resident. The 270-day rule catches the other case: someone domiciled elsewhere who keeps an Idaho house and spends most of the year in it is a resident whether he means to be or not.

Leaving Idaho: the 445-day rule

Idaho has a safe harbor for the former resident who moves away but does not want to argue about domicile. The 2025 instructions treat you as a nonresident if you lived outside Idaho for at least 445 days in a 15-month period, then spent fewer than 60 days in Idaho during the tax year, kept no personal residence in Idaho for yourself or your family during any part of the year, did not claim Idaho as your federal tax home, were not on a senator’s or representative’s staff, and held no federal elective or appointive office other than military or career Foreign Service. Meet all of it and Idaho stops taxing your non-Idaho income without a fight over where your heart is. Miss one, and the ordinary domicile facts decide.

The year you move: Form 43

Form 43 has two columns. Column A is your federal total; column B is the Idaho amount. Lines 7 through 20 list income by type, and only the Idaho share goes in: wages for work performed in Idaho or paid while you were a resident, interest and dividends received while a resident, capital gains on Idaho property or on sales made while a resident, and pension and IRA payments received while a resident. Interest on a personal bank account earned while a nonresident is not Idaho income even if the bank is in Boise. Line 28 compares the two AGIs, Form 39NR adds Idaho’s additions and subtractions, and line 38 is the Idaho percentage: Idaho total adjusted income over federal total adjusted income.

Then the deductions are cut down. Line 36 is the full federal standard deduction (or line 35, itemized deductions less the state and local income or sales tax, if larger), and line 39 multiplies it by the Idaho percentage. The qualified business income deduction and the new Schedule 1-A deductions for tips, overtime, seniors and car-loan interest go on line 40 after apportionment on Idaho Worksheet 1-A, which uses the same Idaho-over-total ratio. Line 41 is Idaho taxable income and line 42 is the tax from the rate worksheet: the zero bracket, then 5.3%. The food tax credit on line 63 is prorated at $12.92 per month of Idaho domicile, with more than 15 days counting as a month, and a part-year resident cannot get a refund of any food credit above the tax. The $100 credit for maintaining a home for an aged or disabled relative is not available on Form 43 at all.

No reciprocity, and the credit instead

A reciprocal agreement lets commuters pay tax only where they live. Idaho has none with any state. An Idaho resident who commutes to a job in Oregon, Utah, Montana, Nevada, Wyoming or Washington reports the wages to Idaho as a resident, and if the work state taxes them too, takes the credit for income tax paid to another state on Form 39R, Part C, carried to Form 40 line 21, with a copy of the other state’s return attached. The credit is the smaller of the other state’s tax on the doubly taxed income and Idaho’s tax on it. If the other state’s tax on those wages is at least Idaho’s 5.3%, the credit cancels the Idaho tax on them; if it is less, Idaho collects the difference. A separate Form 39R is needed for each state. Nevada, Wyoming and Washington levy no tax on wages, so a resident of Post Falls or Lewiston who crosses into Washington every morning pays Idaho the full 5.3% and has nothing to credit.

The commuter going the other way is a nonresident with Idaho-source wages. A Spokane resident who works in Coeur d’Alene owes Idaho tax on the Idaho wages, files Form 43 once they exceed $2,500, and gets whatever credit his home state offers. Washington offers none because it has no income tax to credit against.

Remote work across the line

Idaho sources wages by where the work is done. The Department’s rule is a day count: for an employee who works both in and outside Idaho, Idaho compensation is total compensation times Idaho work days over total work days for that employer, counting only days you actually worked, not holidays, vacation or sick days, and figured separately for each employer. Idaho has no convenience-of-the-employer rule that would tax a nonresident for days worked from home outside the state. So a Spokane resident who works from home for a Coeur d’Alene company owes Idaho tax only for the days he drives in. An Idaho resident who works from a home office in Meridian for a Seattle company owes Idaho on all of it, because a resident is taxed on everything, and Washington takes nothing to credit. An Idaho resident who works from home for a California or Oregon company owes Idaho on all of it and owes the employer’s state only if that state reaches work done outside its borders, which is a question for that state’s rules, with the Idaho credit available for whatever it does tax.

Stock options and severance have their own sourcing rules, which the Department’s page notes but does not spell out; bring the grant and separation paperwork.

Retirement income and the move

Federal law since 1996 bars a state from taxing the retirement income of a person who no longer lives there. Idaho follows it: pension and IRA distributions are Idaho income only for the period you were an Idaho resident, received payment by received payment. A retiree who moves to Idaho in June reports the July-to-December 1099-R payments on Form 43 and pays 5.3% on them, less any retirement benefits deduction he qualifies for, apportioned. A retiree who leaves Idaho in June reports January through June and stops. Social Security is never Idaho income in any month. The Roth-conversion timing that follows from this is in Idaho for retirees: convert before you arrive from a no-tax state, or after you leave for one.

Military families

A service member stationed in Idaho whose home of record is elsewhere owes no Idaho tax on military pay, and files Form 43 only if other Idaho-source income, a part-time job, say, exceeds $2,500. An Idaho resident on active duty outside Idaho for 120 or more consecutive days subtracts the pay earned outside Idaho on Form 39R, Part B, line 11. Under the federal servicemember rules as amended in 2022, a service member and spouse may elect to be treated as residents of the member’s home state, the spouse’s home state or the state of the permanent duty station; a spouse who elects a state other than Idaho and works for an Idaho employer files Form ID-MS1 with the employer each year to stop Idaho withholding.

Community property

Idaho is a community property state. Income either spouse earns while domiciled in Idaho belongs to both, which matters for separate returns and for a couple with two domiciles: the Idaho-domiciled spouse follows Idaho’s rules for his or her assets, and the spouse domiciled elsewhere follows that state’s rules. Earnings from a period when you were domiciled in a separate-property state stay separate. A couple where one spouse has moved to Idaho ahead of the other should raise this before filing separately.

The checklist for the year you move