How Idaho taxes retirement income
Idaho does not tax Social Security benefits. Pensions and 401(k)/IRA withdrawals are taxed as ordinary income. Social Security benefits are completely exempt from Idaho state income tax. Pension and 401(k)/IRA distributions are otherwise taxed as ordinary income at the 5.3% flat rate for the general population, Idaho has no broad retirement-income exemption like Illinois/Pennsylvania/Mississippi. A narrow Idaho Retirement Benefits Deduction (Idaho Code 63-3022A) exists, but only for specific occupational pensions: pre-1984 federal Civil Service Retirement System (CSRS)/Foreign Service Retirement and Disability System annuitants, retired service members, PERSI firefighters, and certain retired Idaho city police officers, each also subject to age (65, or 62+ if disabled) and filing-status conditions. It does NOT apply to private-sector pensions, FERS, or general 401(k)/IRA withdrawals, so 'yes' remains the correct general-case answer.
Retirement income tax in Idaho, at a glance
| Income type | Taxed by Idaho? |
|---|---|
| Social Security | No |
| Pensions | Yes |
| 401(k) / IRA withdrawals | Yes |
| Estate / inheritance tax | None |
| Avg. property tax rate | 0.5% of home value |
Does Idaho tax Social Security benefits?
No. Idaho does not tax Social Security benefits.
Does Idaho tax pensions and 401(k) or IRA withdrawals?
Yes. Idaho taxes pension income and 401(k)/IRA withdrawals as ordinary income. Social Security benefits are completely exempt from Idaho state income tax. Pension and 401(k)/IRA distributions are otherwise taxed as ordinary income at the 5.3% flat rate for the general population, Idaho has no broad retirement-income exemption like Illinois/Pennsylvania/Mississippi. A narrow Idaho Retirement Benefits Deduction (Idaho Code 63-3022A) exists, but only for specific occupational pensions: pre-1984 federal Civil Service Retirement System (CSRS)/Foreign Service Retirement and Disability System annuitants, retired service members, PERSI firefighters, and certain retired Idaho city police officers, each also subject to age (65, or 62+ if disabled) and filing-status conditions. It does NOT apply to private-sector pensions, FERS, or general 401(k)/IRA withdrawals, so 'yes' remains the correct general-case answer.
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- Idaho taxation of retirement income (Social Security, pensions, 401(k)/IRA): Idaho Department of Revenue / Taxation.