Idaho State Tax Credits

More ways to save your hard-earned money from the tax man!

Idaho has some great State Tax Credits for you....

Thank you so much for checking our resource out here for your state and congratulations for taking a proactive step to paying less in taxes. For your state, we have identified the tax credits that are currently being offered to help you pay less in state taxes.

We hope this resource is helpful to you, and if there is something you feel we have missed, please let us know!

It would be completely arrogant of us to think that we know all things and if we missed something we want to know so we can vet that and help you and our other friends in the entrepreneurial community pay less in taxes! And if you found this helpful, you should check out our DIY resources inside of our Tax Savings Communities (found at www.MakeTaxesFair.com/Our-Communities).

We're also ready to help you if you want to skip the line of the DIY process and get help directly from us. To learn more about how we help our clients check out www.MakeTaxesFair.com/Get-My-Roadmap

 
Idaho

Idaho Employer 529 College Savings Plan Tax Credit

Overview:
The Idaho Employer 529 College Savings Plan Tax Credit incentivizes employers to contribute to employees’ IDeal – Idaho 529 College Savings Program accounts. Employers receive a 20% tax credit for direct contributions, strengthening employee benefits while enjoying state tax savings.

Who It’s For:
Idaho employers interested in supporting employees’ education savings goals through direct contributions to the IDeal 529 Plan, while enhancing recruitment, retention, and benefiting from state tax credits.

Four Key Highlights:

  1. 20% Tax Credit on Contributions

    • Employers can claim a 20% tax credit, capped at $500 per employee per year, for direct contributions to employees’ IDeal 529 accounts.

  2. Direct Payment Requirement

    • Funds must be sent directly to the IDeal Program — contributions cannot be paid directly to employees.

  3. Flexible Employer Contribution Options

    • Employers can match employee contributions, kick-start new accounts, offer education bonuses, or support student loan repayment.

  4. Streamlined Administration via 529 Employer Boost Platform

    • Employers can manage and track contributions using the Employer Boost Platform, offering a seamless, compliant system for handling matching programs.

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Idaho Small Employer Investment Tax Credit (SE-ITC)

Overview:
The Idaho Small Employer Investment Tax Credit (SE-ITC) provides a 3% state income tax credit to small businesses that invest in qualifying tangible personal property used in operations like manufacturing, utilities, or broadband. It helps incentivize capital investment by offering either a tax credit or a property tax exemption option.

Who It’s For:
Idaho small employers investing in qualifying business property such as manufacturing equipment, broadband infrastructure, agricultural structures, or communications and utilities assets.

Four Key Highlights:

  1. 3% Tax Credit on Qualified Investments

    • Businesses can claim a 3% tax credit on qualifying tangible property investments, up to a maximum of $750,000, or opt for a two-year property tax exemption instead.

  2. Strict Property Eligibility Requirements

    • Only new, purchased tangible property with a useful life of at least three years qualifies; property like buildings, office furniture, vehicles under 8,000 lbs., and expensed assets are excluded.

  3. Extensive Carryforward Period and Alternative Election

    • Unused credits can be carried forward for up to 14 years, or businesses can elect a two-year exemption from personal property tax by filing Form 49E.

  4. Recapture Rules for Early Disposal or Noncompliance

    • If the property is sold, disposed of, or stops qualifying within five years, or if the business fails to maintain eligibility, the credit must be recaptured using Form 83R or Form 49R/49ER.

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Idaho Research & Development (R&D) Tax Credit

Overview:
The Idaho R&D Tax Credit rewards businesses for increasing research and development activities within Idaho’s enterprise zones. Businesses can claim a 5% credit on qualified research expenditures exceeding a base amount, promoting innovation, new product development, and technological advancement.

Who It’s For:
Idaho-based C-corporations, S-corporations, partnerships, and LLCs conducting qualified R&D activities while maintaining a presence in an Idaho enterprise zone for at least three years.

Four Key Highlights:

  1. 5% Credit on Qualified Research Expenditures

    • Businesses receive a 5% credit for qualifying research expenses that exceed the predetermined base amount and a 3% credit for increased R&D compared to the previous two years.

  2. Four-Year Application Period

    • The credit must be applied evenly over four years (25% each year), allowing businesses to maximize tax savings over time.

  3. Strict Enterprise Zone and Recordkeeping Requirements

    • Companies must be located in the same enterprise zone for at least three years and maintain detailed documentation of all qualifying activities and expenses.

  4. Clear Definition of Qualifying and Non-Qualifying Expenses

    • Eligible expenses include wages, supplies, and contract research directly related to R&D, while purchases of land, equipment, and government-funded research do not qualify.

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