Does Idaho follow the federal no-tax-on-tips and overtime deductions?
CONFORMS
Idaho follows the federal deductions, so qualified tips and overtime are deductible for state income tax as well as federal, subject to the details and years in the state's own guidance below. You still claim the federal deduction on Schedule 1-A first.
Verified against the official state source below — last verified October 26, 2026
| Deduction | Idaho position |
|---|---|
| Federal tips deduction (IRC §224) | Conforms |
| Federal overtime deduction (IRC §225) | Conforms |
What the state itself says
"…the deductions for qualified tips from wages, car loan interest, and overtime compensation" (tail of: "This includes the larger standard deduction amounts, the enhanced senior deduction, and the deductions for…").
- Official source
- Idaho State Tax Commission news release, "Update on filing 2025 Idaho income taxes now that conformity is law" (February 17, 2026)
- Tax years covered
- 2025 (HB 559, signed February 2026, applied to 2025 returns).
Idaho uses fixed-date conformity updated annually and starts from federal AGI, so HB 559 affirmatively conformed Idaho to most OBBBA provisions; the Tax Commission implemented tips/overtime as claimable "conformity deductions" on 2025 returns, with follow-up implementation releases in Feb–Mar 2026.
Your federal deduction is separate
Whatever your state does, the federal deductions run on their own rules: check your W-2 codes with the W-2 Code Checker, estimate with the Tips Calculator and Overtime Calculator, and see the glossary for any term. All state positions: the state-by-state index.
State position verified October 26, 2026 from the official source above. State guidance changes; confirm on the source before filing. This page is general information, not tax advice.