The Idaho retirement income tax leaves Social Security alone, but it reaches IRA income and pension income that is not on a short statutory list of deductible pensions. The Idaho State Tax Commission publishes the rate as 5.3 percent of Idaho taxable income for 2025, the most recent year it states. Idaho's Retirement Benefits Deduction is narrow. It applies only to a short list of specific government pensions.

Whether your pension is on Idaho's short list is the first question to answer. The statute names retirement benefits paid by the Federal Employees Retirement System (FERS) as excluded, and military retirement has its own test.

In This Guide

Idaho Retirement Income Tax at a Glance

Idaho splits retirement income into two very different worlds. Social Security is fully out. A short list of government pensions gets a capped deduction, each with an eligibility test. Retirement income outside that list gets no retirement-benefits deduction, and the Tax Commission states that income from an IRA, pension or other similar retirement payments is subject to Idaho income tax.

Income type Treatment Limit or amount Who qualifies
Social Security Not taxed by Idaho n/a n/a
Listed government pension other than military Deduction, reduced by retirement benefits you or your spouse received under the federal Social Security and Railroad Retirement acts Capped and recalculated each year. Tax year 2025 maximum: $48,216 single, $72,324 married filing jointly, before the reduction At least 65, or at least 62 and classified as disabled; a married taxpayer must file jointly. For CSRS, FSRDS and offset-program annuities, the Tax Commission's 2025 instructions add that the employee must have established eligibility before 1984
Military retirement Deduction, with the same cap and the same reduction Same tax year 2025 maximum ($48,216 single, $72,324 married filing jointly), before the reduction At least 62, classified as disabled at any age, or employed during the year and earned enough to be required to file a federal return; a married taxpayer must file jointly
Pension outside the statute's list (FERS is named as excluded) Subject to Idaho income tax; no retirement-benefits deduction n/a n/a
IRA income and other similar retirement payments Subject to Idaho income tax n/a n/a
Railroad Retirement Board benefits Exempt from Idaho income tax n/a n/a

Is There an Idaho Retirement Income Tax Break for Seniors?

Yes. Idaho exempts Social Security and Railroad Retirement Board benefits. It also offers a narrow Retirement Benefits Deduction that reaches only a specific set of government pensions.

The deduction has a pension-type test and an age or status test. Both are laid out under which pensions qualify below.

Does Idaho Tax Social Security Benefits?

No. Idaho does not tax Social Security benefits, as the Idaho State Tax Commission states in its guidance for seniors and retirees.

Railroad Retirement Board benefits are exempt from Idaho income tax as well.

For retirees whose income is mostly Social Security plus modest account withdrawals, this exemption does a lot of work. Past it, the Retirement Benefits Deduction is narrow.

Which Pensions Qualify for the Idaho Retirement Benefits Deduction?

The Retirement Benefits Deduction is narrow. It applies only to these government pensions:

The statute also names two systems that are out: retirement benefits paid by the Federal Employees Retirement System (FERS) or the foreign service pension system get no deduction.

The police category has conditions of its own. Retired Idaho city police benefits qualify in three cases:

On top of the pension-type limit, there is an age test. For the CSRS and FSRDS annuities and their offset program, the firefighters' fund, and the city police benefits, you qualify if you are at least 65, or at least 62 and classified as disabled.

Both thresholds are inclusive, and the line matters in both directions. A CSRS retiree who has just turned 65 passes the age test, not waiting for 66. A retiree who is exactly 62 and classified as disabled passes it too, not one year short. But a 63-year-old CSRS retiree who is not classified as disabled is out until 65, and so is a 61-year-old CSRS retiree who is classified as disabled.

The law spells out who counts as disabled. For this deduction, Idaho Code 63-3022A(4) defines "disabled" as an individual who is a disabled person described in Idaho Code 63-701, or an individual who qualifies as a person with a "permanent disability" under Idaho Code 49-117(7)(b)(iv). The Idaho State Tax Commission's 2025 individual income tax instructions list these individuals as classified as disabled:

The federal annuities carry one more condition in those 2025 instructions. For the CSRS, FSRDS and offset-program annuities, the instructions state that to qualify for the deduction the employee must have established eligibility before 1984. If you are not sure when eligibility was established, ask the Tax Commission or a tax professional before you claim the deduction.

Idaho Code 63-3022A, published by the Idaho Legislature, is the controlling statute. The Idaho State Tax Commission's Retirement Benefits Deduction page explains the deduction.

Military retirement does not run through that gate at all. Idaho treats it separately, and a military retiree qualifies if any one of three things is true: the retiree is at least 62, is classified as disabled at any age, or was employed during the year and earned enough to be required to file a federal return. So a 62-, 63-, or 64-year-old military retiree who is not disabled still qualifies, which the general 65-or-62-and-disabled rule would wrongly rule out.

That test covers the pension itself. The Tax Commission states that income from an IRA is subject to Idaho income tax, and that holds for a military retiree too.

Every one of these pensions also carries over to a surviving spouse. A widow or widower who has not remarried may deduct the late spouse's CSRS or FSRDS annuity, Idaho firefighters' fund or city police benefits, or military retired pay, provided he or she meets the same test that category applies to the retiree. For the non-military pensions, that means at least 65, or at least 62 and disabled.

Two further conditions apply to everyone.

First, a married taxpayer must file a joint return to take the deduction. The statute sets the deductible amount for a taxpayer who files jointly, for one who is not married, and for an unremarried widow or widower.

Second, the deduction is capped and reduced. The statute ties the cap to Social Security: under Idaho Code 63-3022A(2), the deductible amount may not exceed "maximum retirement benefits under the social security act." For a taxpayer who is not married, the statute defines that as the maximum Social Security benefits payable for the tax year to a person attaining full retirement age in the tax year who has earned the maximum creditable earnings. For a taxpayer who files a joint return with a spouse, it is the maximum payable to such a person whose spouse has no Social Security benefits except those payable on that person's record of earnings.

The Idaho State Tax Commission recalculates and publishes the maximum each year. For tax year 2025, the year the Commission's 2025 instructions cover, the maximum amounts are $48,216 for a single filer and $72,324 for married filing jointly. Those are 2025 figures, so check the instructions for the year you are filing. If you are a surviving spouse, confirm with the Commission which maximum applies to you.

The amount is then reduced by any retirement benefits the taxpayer or the taxpayer's spouse received under the federal Social Security Act or the federal Railroad Retirement Act. The 2025 instructions state that those benefits further reduce the maximum amounts, and that the amount deducted cannot be more than the amount of qualified benefits included in federal income. The worked example below shows the arithmetic.

You claim the deduction on the supplemental schedule to the Idaho return. A Form 40 filer completes Form 39R, where the Retirement Benefits Deduction is line 8 of Part B (Subtractions). A Form 43 filer completes Form 39NR, where it is line 22.

Few pensions qualify, and a qualifying pension still has to clear the test for its category, the joint-return rule, and the reduction.

How Idaho Taxes IRA and Other Pension Income

This is where retirees without a listed government pension land. The statute's list of deductible retirement benefits is closed, so retirement income outside it gets no Idaho retirement-benefits deduction, and the Idaho State Tax Commission says that income from an IRA, pension or other similar retirement payments is subject to Idaho income tax. That sentence does not list account types one by one, and it does not name 401(k) plans. If your savings sit in a 401(k), confirm with the Tax Commission or a tax professional how your distributions are treated.

That matters most for retirees whose income comes from an IRA or a pension that is not on the list, rather than a qualifying government pension. Plan on that income being subject to Idaho income tax, with no retirement-benefits deduction against it.

If a large share of your savings sits in Roth accounts, ask the Idaho State Tax Commission or a tax professional how your distributions are treated before you plan withdrawals.

If you are weighing how much to draw from these accounts to cover care, retirement accounts for care walks through the tradeoffs.

How Your Pension Type Changes Your Idaho Tax Bill

Two Idaho retirees with the same income can owe very different amounts depending on whether their pension is on the state's short list. Social Security comes out for everyone; other retirement income gets the deduction only if it is one of the listed government pensions.

Picture two single retirees in tax year 2025, each 67, with $24,000 in Social Security retirement benefits and $40,000 in other retirement income. The first draws that $40,000 from a CSRS federal pension, established eligibility before 1984, and is past 65, so the Retirement Benefits Deduction reaches that income. Assume all $40,000 is included in federal income.

The 2025 maximum for a single filer is $48,216. The $24,000 of Social Security retirement benefits comes off that figure: $48,216 minus $24,000 is $24,216. That is less than the $40,000 pension, so in this illustration the deduction is $24,216, and the other $15,784 of the pension ($40,000 minus $24,216) gets no retirement-benefits deduction.

The second draws the same $40,000 from an IRA. That income is subject to Idaho income tax with no retirement-benefits deduction against it, and the Tax Commission's published rate for 2025 is 5.3 percent of Idaho taxable income.

Same headline income, but only the first retiree can use the deduction, and the $24,000 of Social Security retirement benefits has already cut it roughly in half. This is an illustration only. The retirees and their incomes are hypothetical, the maximum is the tax year 2025 figure, and the result is not a prediction of your own outcome.

This is general information, not personalized tax advice. Before you plan withdrawals, confirm with the Idaho State Tax Commission or a tax professional that your pension is on the list. Confirm that you meet the test for your category too.

If retirement savings are part of how you will fund care, building a senior care funding plan is a useful next step.

Not sure whether your pension qualifies in Idaho? Chat with Brevy's care navigator to sort out your situation.

Frequently Asked Questions

Does Idaho tax Social Security?

No. Idaho does not tax Social Security benefits.

Does Idaho tax IRA and pension income?

Yes. The Idaho State Tax Commission states that income from an IRA, pension or other similar retirement payments is subject to Idaho income tax. A pension on the Retirement Benefits Deduction list can still get that deduction. The Commission's wording does not name 401(k) plans one by one, so confirm how your own distributions are treated with the Tax Commission or a tax professional.

Who qualifies for the Retirement Benefits Deduction?

Idaho's Retirement Benefits Deduction covers only federal CSRS and FSRDS pensions, the offset program of either system, the Idaho Firefighters' Retirement Fund, three kinds of retired Idaho city police benefits, and military retirement. For everything except military retirement, which has its own test, you must be at least 65, or at least 62 and classified as disabled. For the CSRS, FSRDS and offset-program annuities, the Tax Commission's 2025 instructions add that the employee must have established eligibility before 1984. A married taxpayer must also file a joint return, and the deduction is capped and reduced by retirement benefits you or your spouse received under the federal Social Security and Railroad Retirement acts.

Does Idaho tax military retirement pay?

Military retirement is one of the categories Idaho's Retirement Benefits Deduction reaches, and it has its own test rather than the general one. A military retiree qualifies if any one of these is true: at least 62, classified as disabled at any age, or employed during the year and earning enough to be required to file a federal return. A 62-, 63-, or 64-year-old military retiree who is not disabled therefore qualifies. A married retiree must file jointly, and the deduction is capped and reduced by retirement benefits you or your spouse received under the federal Social Security and Railroad Retirement acts.

Does Idaho tax Roth IRA withdrawals?

Ask the Idaho State Tax Commission or a tax professional how your Roth distributions are treated. The Commission's statement that this guide relies on says income from an IRA is subject to Idaho income tax, and it does not single out Roth accounts.

Does FERS qualify for the Idaho deduction?

No. The deduction reaches the federal Civil Service Retirement System (CSRS), and the statute names retirement benefits paid by the Federal Employees Retirement System (FERS) as excluded. Confirm which system pays your pension; a FERS pension gets no Idaho retirement-benefits deduction.

What is Idaho's income tax rate on retirement income that gets taxed?

The Idaho State Tax Commission publishes the individual income tax rate as 5.3 percent of Idaho taxable income for 2025, the most recent year it states. Check the Tax Commission's current figure before you file for a later year.

Next Steps

If you are retired in Idaho, the first question is whether your pension is on the state's short list. Your age, your filing status, and the cap and reduction covered above shape the rest.

If you are mapping out how to pay for care, how to pay for senior care covers the main routes.

Learn More

FinancialHow to Pay for Senior Care in IdahoHow to pay for senior care in Idaho: Medicare stops at day 100, Idaho doesn't tax Social Security, plus property tax relief, Medicaid rules and home equity. FinancialIdaho Senior Property Tax ReliefIdaho's Circuit Breaker cuts property taxes $250-$1,500 for homeowners 65+ with 2026 income up to $40,030. Apply Jan 1-Apr 15, 2027 at your county assessor. FinancialHow Each State Taxes Retirement IncomeNine states tax no retirement income, and four more exempt qualifying retirement plan withdrawals. See how every state taxes Social Security, pensions and IRAs. FinancialHow to Pay for Senior CareHow to pay for senior care: what it costs nationally and how Medicaid, Medicare, VA benefits, and private pay each fit. Who qualifies, what's covered, in 2026. FinancialBuilding a Senior Care Funding PlanA step-by-step plan to pay for senior care: estimate the cost, inventory income and assets, find the payers you qualify for, sequence them, and get help. FinancialRetirement Accounts for CareHow to use a retirement account to pay for senior care: the tax on IRA and 401(k) withdrawals, the early-penalty exceptions, RMDs at 73, and the tax-spike trap.

Find personalized help making sense of the Idaho retirement income tax at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.

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Brevy Care Team

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