States / Idaho
ID state income tax · checked October 14, 2026
Does Idaho tax tips and overtime?
No. Idaho follows the federal tips and overtime deductions, starting with 2025 returns.
| Idaho return | Tips | Overtime |
|---|---|---|
| 2025 | Not taxed (follows federal) | Not taxed (follows federal) |
| 2026 | Not taxed (follows federal) | Not taxed (follows federal) |
The details
H 559, signed February 10, 2026, updated Idaho’s conformity retroactive to January 1, 2025, including the qualified tips and overtime deductions at the federal limits.
The Idaho State Tax Commission says 2025 filers claim them on existing lines of Form 40 or Form 43, and people who filed before the update can amend.
The federal deductions apply either way. See who qualifies for no tax on tips, how the overtime deduction works, and where both go on Schedule 1-A.
States with the same 2026 treatment
All 50 states and D.C. · Hawaii · Illinois
Questions
Does Idaho tax tips in 2026?
For 2026, Idaho doesn’t tax the qualified tips you deduct on your federal return.
Does Idaho tax overtime in 2026?
For 2026, Idaho doesn’t tax the qualified overtime you deduct on your federal return.
What about my 2025 Idaho return?
For 2025, Idaho doesn’t tax the qualified tips you deduct on your federal return. For 2025, Idaho doesn’t tax the qualified overtime you deduct on your federal return.
Does the federal deduction still apply?
Yes. Whatever your state does, you can still claim the federal deductions on Schedule 1-A if you qualify: up to $25,000 of qualified tips per return and up to $12,500 of qualified overtime ($25,000 joint), phasing down above $150,000 of MAGI ($300,000 joint).