There’s some tax relief on the way for Idaho. As the legislature closes out its session, Idaho’s new tax legislation promises deliver some much needed easing of Idahoans current tax burden. Here’s how it breaks down.
Idaho’s New Tax Legislation
According to the Idaho Statesmen, here’s how the new tax law will impact residents.
The bill cut individual income tax rates across all seven tax brackets by 0.475% and cut the corporate rate by 0.475% to 6.925%
Taxpayers across all income levels will see a reduction in their individual income tax rates. By pairing the federal bill and the state tax break together, most Idahoans receive tax relief that varies based on income level, business type, and family size.
Federal conformance increased the standard deduction, so most Idahoans will likely now benefit more by taking the standard deduction. Prior to this year, most middle-class Idahoans itemized on their taxes.
Conforming to the IRC will help Idaho small businesses, and in turn, the families of small-business owners. Non-C corps receive a 20% reduction in the taxes they pay on their qualifying federal taxable income.
Idaho created a $130 tax credit per child in addition to the federal credit, which doubled to $2,000. Idaho elected to add the child tax credit and rate reduction to help offset the loss of the dependent exemption, which Idaho taxpayers can no longer claim.
Under the federal law, the tax burden on Idahoans was expected to increase by nearly $100 million. The new state tax cuts are just over $200 million, saving Idahoans over $100 million in taxes.
More Cuts On The Way?
Idaho Legislators are debating another bill which would increase the child tax credit, allowing most large families to avoid a state tax increase. There is likely more work that needs to be done, but for now Idaho’s New Tax legislation looks to benefit residents.
If lower taxes sound like a good idea to you, maybe moving to Idaho is in the future? However, before you make any move, consider downloading the City vs City app first.
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As a result, City vs City shows you a breakdown of the true cost of living in your city. Then, compare that cost with another city of your choosing and see which comes out ahead!