Updated October 4, 2026. Quick answer: Yes. Idaho taxes 401(k) and IRA withdrawals at a flat rate: “Effective January 1, 2025, the individual income tax rate is 5.3%”. Form 40 tells filers to enter “the amount of IRA distributions received while an Idaho resident”. The retirement benefits deduction covers only listed government and military systems; the instructions say “Federal Employees Retirement System (FERS) don’t qualify for the deduction”.
State retirement-income forms, line by line: Idaho Form 39R.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Idaho tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Idaho tax 403(b) and 457(b) withdrawals.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Idaho tax withholding on IRA and 401(k) withdrawals.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Idaho have an inheritance tax?.
Contributing to an HSA? How the state taxes it, from its own tax documents: Does Idaho tax HSA contributions?.
What Idaho does with 401(k) and IRA withdrawals
The instructions add that “Benefits paid out of the PERSI Base Plan don’t qualify”. The deduction needs the recipient to be at least age 65, or 62 if classified as disabled, and a benefit paid under a listed system. The documents list no deduction for private IRA or 401(k) distributions and do not separately address Roth distributions.
| Item | What the documents say |
|---|---|
| Treatment | Taxable; the deduction covers only listed government and military systems |
| State rate | 5.3% flat (2025) |
| Retirement benefits deduction | Up to $48,216 single or $72,324 married filing jointly, reduced by Social Security and Railroad Retirement benefits |
| Source | Idaho State Tax Commission, 2025 instructions (EIN00046); Idaho Code 63-3024 and 63-3022A |
A $40,000 withdrawal
All $40,000 of a traditional withdrawal is Idaho income. At 5.3%, the tax on that amount alone is $2,120 (computed as $40,000 times 5.3%), before deductions and credits, which lower it.
What changes in 2026
The documents read print no 2026 rate or deduction change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Idaho taxes pensions, how Idaho taxes retirement income, whether Idaho taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
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Answer againSources
- Idaho Individual Income Tax Instructions 2025 (Forms 40, 43, 39R, 39NR, 44), EIN00046 rev. 03-02-2026: https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_03-02-2026.pdf
- Idaho Code 63-3024 Individuals’ tax and tax on estates and trusts: https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3024/
- Idaho Code 63-3022A Deduction of certain retirement benefits: https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3022A/
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.