How is the Legislative Change for the State of Idaho Commission New Flat Tax Rate Delivered? (Doc ID 2962491.1)

Last updated on OCTOBER 09, 2023

Applies to:

Goal

How is the new flat tax rate delivered?

The Idaho State Tax Commission implemented a new flat tax of 5.8% on income over $2,500 ($5,000 for married filing joint) that took effect January 1, 2023 under H.B.1will be reflected.

Accordingly, until the withholding formula is updated (by July 2023), the withholding rates that apply for January through June 2023 range from 1.0% to 6.0% (1%,3%, 4.5% and 6%), rather than the flat 5.8% under H.B. 1 that applies effective January 1, 2023.

Employers may want to consider communicating to employees that the current Idaho withholding formula may not result in Idaho income tax withholding that matches their estimated Idaho
personal income tax liabilities for 2023.   Employees may wish to consider adjusting their ID W4, Employee’s Withholding Allowance.

Solution

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