Updated October 30, 2026. Quick answer: Partly, and only for CSRS. Idaho Code 63-3022A allows a deduction for “Retirement annuities paid to a retired employee or the unmarried widow” under the federal civil service system, but denies it for “retirement benefits paid by the federal employees retirement system”.
What Idaho does with a FERS or CSRS annuity
| Question | What the Idaho documents say |
|---|---|
| What the source says | Idaho allows a limited retirement benefits deduction for federal Civil Service Retirement System (CSRS) annuities, but the statute says benefits paid by the Federal Employees Retirement System (FERS) cannot be deducted under this section. |
| Amount or limit | A capped deduction, not a flat amount: the cap is tied to the maximum Social Security retirement benefit, is reduced by any Social Security or railroad retirement benefits received, and cannot exceed the qualifying pension included in income. The dollar cap for the year is not printed in the state documents cited here. |
| Age or other test | The retiree must be at least 65, or at least 62 and classified as disabled, and married retirees must file jointly. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Idaho documents’ own words
- “Some federal pensions might qualify for the deduction from Idaho income tax.” (Idaho Retirement Benefits Deduction)
- “You’re at least 65, or at least 62 and disabled.” (Idaho Retirement Benefits Deduction)
- “not the Federal Employees Retirement System, or FERS” (Idaho Retirement Benefits Deduction)
How this differs from other pensions in Idaho
Only a very few pensions qualify for the deduction: CSRS and foreign service annuities, certain military benefits, and a few Idaho firefighter and police funds. Other pensions, including FERS, do not get this deduction. See also Does Idaho tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the Idaho return
The deduction comes from Idaho Code 63-3022A and is claimed on the Idaho retirement benefits deduction form. It is capped by a figure tied to the maximum Social Security benefit and reduced by any Social Security or railroad retirement benefits.
Checks before you rely on this answer
- Confirm your annuity is CSRS and not FERS before relying on the deduction.
- Check your age: the Tax Commission page says you must be at least 65, or at least 62 and disabled.
- If you are married, file jointly, because the deduction requires it.
What the Idaho documents leave open
The dollar cap for the year is not stated here because the 2025 Form 39R booklet could not be retrieved. Idaho’s income tax rate was not read, TSP and IRA withdrawals are not addressed, and no 2026 booklet exists yet.
Common mistakes
- Assuming a FERS annuity qualifies. The statute excludes benefits paid by the Federal Employees Retirement System.
- Forgetting the Social Security offset. The cap is reduced by any Social Security or railroad retirement benefits received.
Related: Does Idaho tax pensions?, Idaho military retirement pay, Idaho retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- Idaho Code 63-3022A, Deduction of certain retirement benefits: https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3022A/
- Idaho Retirement Benefits Deduction: https://tax.idaho.gov/taxes/income-tax/individual-income/popular-credits-and-deductions/idaho-retirement-benefits-deduction/
Read from the state documents linked above on October 30, 2026. General information, not tax advice.