Idaho Subtractions: What You Need to Know
When filing your Idaho state income tax return, understanding which subtractions are allowed is crucial for accurate reporting. Idaho follows specific rules for subtracting certain items from your federal adjusted gross income (AGI) to determine your Idaho taxable income.
Key Subtractions Allowed by Idaho
- Business Income Adjustments: Do not include other subtractions from Form ID K-1, Part IV, line 28 on the line designated for business income. These should be reported on line 15 of the Idaho return.
- Foreign Taxes: Foreign taxes are not to be subtracted directly. Instead, they are claimed as part of the Idaho itemized deduction if allowed under state law.
- Capital Gains and Losses: Capital gains or losses must be reported on Form ID K-1, Part IV, line 28, and are included in the calculation of Idaho taxable income. If required, federal Schedule D must also be attached.
Important Instructions for Form Completion
- Complete the worksheet provided in Form 43 instructions to calculate Idaho’s portion of income from multiple businesses. If you have more than three businesses, additional lines may be added.
- Ensure that all subtractions are properly categorized. For example, foreign taxes should not be subtracted on the business income line but should be claimed under itemized deductions if applicable.
- When calculating total adjusted income, subtract line 10 from line 9 as instructed on Form 40.
Additional Considerations
Idaho allows certain credits that may affect your overall tax liability, including:
- Credit for contributions to Idaho educational entities
- Credit for contributions to Idaho youth and rehabilitation facilities
- Credit for live organ donation expenses
These credits are reported on Form 43, line 44, and are added together to determine your total credits.
Source:
Individual Income Tax guidelines
Form 43
Form ID K-1
Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions.