Updated October 4, 2026. Quick answer: Yes, at a flat rate. “Effective January 1, 2025, the individual income tax rate is 5.3%.” Idaho also offers a capital gains deduction on Form CG: “The deduction is 60% of the capital gain net income” from qualifying Idaho property.
Selling your home? How the state taxes the profit, from its own tax documents: Does Idaho tax the profit from selling your home?.
The same question for dividends and interest: does Idaho tax dividends and interest.
How Idaho treats capital gains
| Item | What the documents say |
|---|---|
| Treatment | Taxed as income at the flat rate; a 60% deduction applies to qualifying Idaho property |
| Rate | 5.3% (2025 instructions), after a subtraction of $4,811 for a single filer in the tax worksheet |
| Qualifying property | Real property held for at least 12 months; tangible personal property used in a revenue-producing enterprise and held at least 12 months (Form CG) |
A $50,000 long-term gain
A $50,000 gain on property that does not qualify is taxed at the flat rate: computed as $50,000 x 5.3% = $2,650, before the single-filer subtraction.
If the gain is on qualifying Idaho property, 60% is deducted, which leaves $20,000 taxable, and computed as $20,000 x 5.3% = $1,060.
What changes in 2026
The documents read print no 2026 rate or capital gain change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.
Related: whether Idaho taxes pensions, how Idaho taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.
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Answer againSources
- Instructions: Individual Income Tax 2025 (Forms 40, 43, 39R, 39NR): https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_03-02-2026.pdf
- Capital Gains Deduction and Instructions 2025 (Form CG): https://tax.idaho.gov/wp-content/uploads/forms/EFO00093/EFO00093_09-18-2025.pdf
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.