One of the most common questions we receive from retirees, transplants from other states, and people considering retiring soon is whether Idaho will tax their Social Security benefits. The answer is no, Idaho does not levy state income tax on Social Security benefits. However, federal income taxes may apply to up to 85% of your Social Security benefits. Carefully managing your income in retirement is key to minimizing the taxes you pay on Social Security. The federal tax on Social Security is one of the many “phantom” income taxes that can drastically increase the taxes you pay in retirement. 

You can read more on the Idaho State Tax Commission’s website or schedule a Free Consultation with us to start the process of planning for retirement in Idaho.