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IdahoH 05592026 regular legislative sessionHouseWALLET

TAXATION – Amends existing law to update references to the current Internal Revenue Code and to revise certain tax credits and adjustments.

Sponsored By: REVENUE AND TAXATION COMMITTEE

Signed by Governor

TAXATION

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 0 benefits, 0 costs, 3 mixed.

Idaho adopts 2026 federal tax code

Beginning January 1, 2025, Idaho uses the federal tax code as it stood on January 1, 2026 to compute state taxes. Section 85 uses its January 1, 2020 rules. Certain research costs from tax years starting in 2022 through 2024 may still be expensed under older federal section 174 rules. These updates can change Idaho taxable income for many filers.

Idaho limits bonus depreciation for businesses

Beginning January 1, 2025, Idaho ignores federal bonus depreciation when figuring state basis, depreciation, and gains. This applies to property bought after September 10, 2001 and before December 31, 2007, and to property bought after December 31, 2009. Pass‑through owners must include their share of these adjustments and keep Idaho basis, at‑risk, and loss records. Idaho figures at‑risk and passive loss limits without counting bonus depreciation. If federal loss limits suspend your bonus depreciation, Idaho defers the add‑back until you use those losses. Idaho may adjust returns for these items up to three years after the last affected year’s return.

New Idaho research credit for businesses

Beginning January 1, 2025, Idaho offers a nonrefundable research credit. It equals 5% of Idaho qualified research expenses above the base plus 5% of Idaho basic research payments, limited to Idaho tax after other credits. The base uses only Idaho gross receipts, and you may make an irrevocable start‑up election. Unused credit carries forward up to 14 years; the oldest credit applies first, and combined groups may share carryforwards. The Tax Commission can set how pass‑through owners split the credit. You cannot claim the credit for costs deducted or amortized under federal sections 174 or 174A.

Sponsors & Cosponsors

Sponsor

  • REVENUE AND TAXATION COMMITTEE

    Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

Actions Timeline

  1. Reported Signed by Governor on February 10, 2026 Session Law Chapter 1 Effective: Retroactive to 01/01/2025

    2/11/2026

  2. Delivered to Governor at 2:40 p.m. on February 9, 2026

    2/10/2026

  3. Returned from Senate Passed; to JRA for Enrolling

    2/9/2026House

  4. Reported out of Committee with Do Pass Recommendation; Filed for second reading

    2/6/2026House

  5. Received from the House passed; filed for first reading

    2/4/2026Senate

  6. Read second time; Filed for Third Reading

    2/3/2026House

  7. Reported out of Committee with Do Pass Recommendation, Filed for Second Reading

    2/2/2026House

  8. Reported Printed and Referred to Revenue & Taxation

    1/30/2026House

  9. Introduced, read first time, referred to JRA for Printing

    1/29/2026House

Bill Text

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