Some of the Allowable Subtractions from Idaho Income (see instructions for Form 39R):
IDAHO NET OPERATING LOSS (NOL) CARRYOVER AND CARRYBACK-Enter the Idaho NOL carryover. Include Form 56 or a schedule showing the application of the loss. If this is an amended return to claim an NOL carryback, enter the amount of the NOL carryback. Include Form 56 or a schedule showing the application of the loss. Enter the total of the NOL carryover and carryback amounts.
STATE INCOME TAX REFUND-If you itemized your deductions on your 2017 federal Form 1040, enter the amount of all state income tax refunds included in income on federal Schedule 1, line 10.
INTEREST FROM U.S. GOVERNMENT OBLIGATIONS-Idaho doesn't tax interest income you received from U.S. government obligations. Deduct any U.S. government interest included in federal adjusted gross income, Form 40, line 7.
Examples of U.S. government obligations include:
Banks for Cooperatives · Federal Farm Credit Banks
Federal Financing Bank Federal Homeowners Loan Bank
Federal Intermediate Credit Bank Federal Land Bank
Guam Puerto Rico
Student Loan Marketing Association Tennessee Valley Authority Bonds
Territory of Alaska Territory of Hawaii
Territory of Samoa U.S. Series EE and HH Bonds
U.S. Treasury Bills and Notes Virgin Islands
Idaho taxes interest income received from the Federal National Mortgage Association (FNMA) and the Government National Mortgage Association (GNMA).
If you have interest income from a mutual fund that invests in both nonexempt securities and exempt U.S. government securities, you can deduct the portion of the interest that's attributable to direct U.S. government obligations. This amount must be identified by the mutual fund to be deductible. This includes your distributive share from Form ID K-1, Part IV, line 24.
ENERGY EFFICIENCY UPGRADE-To qualify for this deduction, your Idaho residence must have existed, been under construction, or had a building permit issued on or before January 1, 2002, and must be your primary residence.
Energy effi ciency upgrade means an energy efficiency improvement to your residence's envelope or duct system that meets or exceeds the minimum value for the improved component established by the version of the International Energy Conservation Code (IECC) in effect in Idaho during the tax year when the improvement is made.
Energy effi ciency upgrades include:
Insulation that's added to, not replacing, existing insulation. Insulated siding doesn't qualify unless the cost of the siding and the insulating material is stated separately. The cost of the insulating material is the only thing that qualifies
Windows that replace less efficient existing windows Storm windows
Weather stripping and caulking
Duct sealing and insulation. Duct sealing requires mechanical fastening of joints and mastic sealant
The amount charged for labor to install the energy efficiency upgrades is also deductible. Storm doors don't qualify for this deduction.
ALTERNATIVE ENERGY DEVICE DEDUCTION-If you install an alternative energy device in your Idaho residence, you can deduct a portion of the amount actually paid or accrued (billed but not paid).
In the year the device is placed in service, you can deduct 40% of the cost to construct, reconstruct, remodel, install, or acquire the device, but not more than $5,000. In the next three years after installation, you can deduct 20% of these costs per year, but not more than $5,000 in any year.
Qualifying devices include:
A system using solar radiation, wind, or geothermal resource primarily to provide heating or cooling, or produce electrical power, or any combination thereof
A fluid-to-air heat pump operating on a fluid reservoir heated by solar radiation or geothermal resource, but not an air-to-air heat pump unless it uses geothermal resources as part of the system
A natural gas or propane heating unit that replaces a noncertified wood stove
An Environmental Protection Agency (EPA)-certified wood stove or pellet stove meeting the most current industry and state standards that replaces a noncertified wood stove A noncertified wood stove is a wood stove that doesn't meet the most current EPA standards. You must take the noncertified wood stove to a site authorized by the Division of Environmental Quality (DEQ) within 30 days from the date of purchase of the qualifying device. The DEQ will give you a receipt to verify they received and destroyed the noncertified wood stove.
You must install the natural gas or propane heating unit, the EPA-certifi ed wood stove, or pellet stove the same tax year that you surrender the nonqualifying wood stove to the DEQ.
CHILD AND DEPENDENT CARE-If you claimed the federal Credit for Child and Dependent Care Expenses, you're allowed an Idaho deduction for the child care expenses you paid for the care of your dependents. The Idaho deduction is a different amount than the federal credit.
SOCIAL SECURITY AND RAILROAD BENEFITS-Idaho doesn't tax Social Security benefits, benefits paid by the Railroad Retirement Board, or Canadian Social Security benefits (OAS, QPP, or CPP) that are taxable on your federal return. Exempt payments from the Railroad Retirement Board include:
Retirement, supplemental, and disability annuities Unemployment and sickness benefi ts
Enter the taxable amount of Social Security benefits from Form SSA-1099 or Social Security Equivalent railroad benefits from Form RRB-1099 included on your federal Form 1040, line 5b. Don't enter the amount reported on Form 1040, line 5a. Enter the taxable amount of Non-Social Security Equivalent railroad benefits from Form RRB-1099-R included on your federal Form 1040, line 4b. Don't enter the amount reported on Form 1040, line 4a.
If subtracting benefits from the Railroad Retirement Board, you must include Form RRB-1099 or RRB-1099-R with your return. Disability pension paid by the Federal Railroad Retirement Act may be included on Form 1040, line 1 as wages, if you're under the minimum retirement age.
RETIREMENT BENEFITS DEDUCTION FOR QUALIFIED RETIREMENT BENEFITS-You may be able to deduct some of the qualifying retirement benefits and annuities you receive. The Idaho Retirement Benefit Deduction has a two-part qualification. You must qualify for both parts to receive this deduction.
TECHNOLOGICAL EQUIPMENT DONATION-Enter the lesser of cost or fair market value of technological equipment donated to a public or nonprofi t private elementary or secondary school, public or nonprofit private college or university, public library, or library district located in Idaho. Items that qualify for this deduction are limited to computers, computer software, and scientific equipment or apparatus manufactured within five years of the date of donation. The amount deducted can't reduce Idaho taxable income to less than zero. Any unused deduction can't be carried to another year.
Include on this line your distributive share from Form ID K-1, Part IV, Column B, line 25. The amount entered can't be more than the amount of the pass-through income less deductions of the entity making the contribution.
IDAHO CAPITAL GAINS DEDUCTION-You may be able to deduct 60% of the capital gain net income reported on federal Schedule D from the sale of qualified Idaho property described below.
(a) Real property held for at least 12 months, or
(b) Tangible personal property used in a revenue-producing enterprise and held for at least 12 months. A revenueproducing enterprise means:
• Producing, assembling, fabricating, manufacturing or processing any agricultural, mineral or manufactured product
• Storing, warehousing, distributing or selling at wholesale any products of agriculture, mining or manufacturing
• Feeding livestock at a feedlot
• Operating laboratories or other facilities for scientific, agricultural, animal husbandry or industrial research, development or testing
(c) Cattle and horses held for at least 24 months, and other livestock used for breeding held for at least 12 months
(d) Timber held for at least 24 months
NOTE: Gains from the sale of stocks and other intangibles don't qualify. Complete Idaho Form CG to compute your capital gains deduction.
MILITARY PAY EARNED OUTSIDE OF IDAHO-If you're serving in the United States Army, Navy, Marine Corps, Air Force, or Coast Guard on active military duty that is continuous and uninterrupted for 120 days, Idaho doesn't tax your active duty military wages for service outside of Idaho. The continuous 120 days don't have to be in the same tax year. Enter your nontaxable military wages.
Don't include military wages earned while stationed in Idaho. Your wage and tax statement (W-2) doesn't show this amount separately and you may have to compute the amount of income earned outside of Idaho. You should see your unit of assignment or use your orders in making the computation. Include a copy of your worksheet.
National Guard or Reserve pay, including annual training pay, generally doesn't qualify as active duty pay unless you've been called into full-time duty for 120 days or more. If you're a commissioned officer of the Public Health Service or of the National Oceanic and Atmospheric Administration militarized by the President of the United States and attached to the armed forces, your active duty military wages earned outside Idaho qualify for this deduction.