BOISE, Idaho — Idaho residents who received money from the state due to the COVID-19 pandemic could have an unexpected tax bill when filing the 2020 Idaho income tax return. According to the Idaho State Tax Commission, federal economic impact funding, or stimulus payments, is not subject to Idaho income tax. The stimulus payment is not taxable as it is not an income payment.
Taxable income includes unemployment insurance benefits provided to people who lost their job or received Idaho Return-to-Work bonuses awarded to employees who were laid off due to the pandemic and then returned to work. Rebound Idaho cash grants awarded to small businesses and people who are self-employed are also taxable.
“We’re giving folks an early heads-up about their taxes,” Tax Commission Chairman Tom Harris said. “We want them to have time to plan, so they’re not caught off guard when they file next year.”
Recipients of the benefits, bonuses and cash grants must report the money on their Idaho income tax return. If Idaho income tax was not withheld when the money was received, the person may owe more tax than expected or have a smaller refund.
Taxpayers worried about a higher-income tax bill can make estimated payments online using the free Quick Pay service. The Idaho State Tax Commission also recommends setting aside money each month to help cover any extra tax.