There’s a lot to like about Idaho. It’s naturally beautiful, has a relatively affordable cost of living, and of course, there’s a lot of Boise State fans if you’re into that. However, if you’re planning on retiring in Idaho you may want to look elsewhere.
“Idaho is not a particularly good place to retire, from a tax standpoint, and not bad,” Kevin Cahill, senior economist, partner, and project director for ECONorthwest, a Portland economics consultancy. Cahill works in Boise.
The article, and Kevin Cahill, is quick to point out that as is the case with many states: your mileage may vary. However, taxes are a big factor for those planning on retiring in Idaho or anywhere.
Here are five key tax areas for retirees to consider.
Individual Income Tax
Idaho does not offer any age-based breaks on individual income tax. No retiree benefit to be had there. Social security benefits, however, are exempt from state income tax. Some federal, state, and local pensions are also tax exempt. This would apply mostly to civil servants such as police and firefighters.
Idaho has it. Some nearby states don’t. At 6.0%, Idaho’s state sales tax is relatively manageable. However, it does rank in the top 13 for highest sales tax. However, it’s nowhere near the sales tax rate in California, New York, Illinois, Texas, and others. These states all see sales tax rates above 8.0%.
At 6.0%, Idaho’s sales tax is in the neighborhood of Kentucky, West Virginia, and Maryland. However, the state is surrounded by Oregon and Montana; both states without a sales tax.
Local Sales Tax
6.0% may be relatively low, however that’s only the state sales tax. In certain areas of Idaho additional taxes may apply. These are almost exclusively “resort” type areas such as Sandpoint or Sun Valley. The downside? These are popular retirement destinations.
The moral? Investigate before you move. Nothing worse than experiencing sticker shock on your next restaurant check.
If you’re planning on retiring in Idaho, you’re likely looking to buy a home or condo. Homeowners who are over 65 and low income may qualify for a reduction in property taxes. There is also a standard homeowner’s exemptions which most Idahoans would qualify for.
Beyond that, there are no specific property tax deductions for retirees.
The good news if you’re planning that far down the line is that Idaho does not have any estate or inheritance tax to worry about.
Come To Idaho… But Not Because of the Taxes
As far as taxes are concerned, if Idaho is the story of Goldilocks, the tax structure for retirees is neither too hot nor too cold. However, it isn’t “just right” either. Some, but not all of Idaho’s tax laws are beneficial to retirees.
Others may leave you wanting.
The conclusion as drawn from the Idaho Business Review is that people are indeed retiring in Idaho. It just isn’t necessarily because of the taxes.
“I’m a retiree who came to Idaho, but I didn’t come here for its tax structure – I came here for family,” said Gail Lusk, Tax-Aide District Coordinator for Boise and surrounding areas for AARP, a nonprofit, nonpartisan organization for Americans over 50.
Where Will You Retire?
There are plenty of Americans who are retiring in Idaho. Some will be pleased with their cost of living while others may find it a bit too taxing. The truth is that your individual circumstances and location will have a huge impact on cost of living.
City vs City is a powerful cost of living calculator which uses real, local data to determine your cost of living expenses. Simply input your data, enter your current zip code, and let City vs City show you your real cost of living.
Then, enter another zip code of your choosing and compare costs. City vs City’s powerful technology will show you a side by side comparison of your current and prospective costs of living.
How does Boise Idaho stack up against Springfield, Illinois? Miami, Florida vs Seattle, Washington. City vs City can show you how your cost of living would change if you were to move to a different city.
If you’re planning on retiring in Idaho, moving to a different city, or just want to see how your expenses might change: download City vs City today and start comparing.