Updated October 5, 2026. Quick answer: No, Idaho follows the federal deduction. A full-year resident filing Form 40 enters federal adjusted gross income on line 7, which already reflects the federal HSA deduction. For Form 43, the part-year resident and nonresident return, the State Tax Commission’s 2025 instructions for line 21 tell filers to enter Idaho’s portion of “The deduction for a federal health savings account” included on federal Schedule 1, line 13. The 2026 federal HSA limits are $4,400 for self-only coverage and $8,750 for family coverage.
Idaho HSA tax treatment at a glance
| Item | What the documents say |
|---|---|
| Contributions | Full-year residents: already in federal adjusted gross income on Form 40, line 7. Part-year residents and nonresidents: Idaho’s portion is entered on Form 43, line 21 |
| Earnings | Not stated in the documents read |
| Distributions | Not stated in the documents read |
| Where it is reported | Form 40, line 7 (federal adjusted gross income); Form 43, line 21 for part-year residents and nonresidents (federal Schedule 1, line 13) |
| Federal HSA limits, 2026 | $4,400 self-only; $8,750 family |
| Source | Idaho State Tax Commission; Idaho Legislature; IRS Revenue Procedure 2025-19 |
What the Idaho documents say
The Idaho State Tax Commission’s 2025 individual income tax instructions packet names the line in its Form 43 instructions: “Line 21 Deductions for IRAs and Health Savings Accounts”. It tells the filer to enter Idaho’s portion of “The deduction for a federal health savings account” included on Schedule 1, line 13, alongside the federal IRA and Archer MSA deductions. A worksheet in the packet apportions the amount by the share of income received while an Idaho resident or from Idaho sources.
On the federal link, Idaho Code 63-3004 defines the Internal Revenue Code for Idaho purposes as “as amended and in effect on the first day of January 2026”, subject to the exceptions the section lists. The text read does not mention section 223, the federal HSA section, among those exceptions.
Earnings, distributions and the rest
The instructions read describe the HSA deduction only. They do not say how Idaho treats HSA earnings or distributions, and the Commission’s page on Idaho’s own medical savings account deduction concerns a separate Idaho account, which this page does not rely on.
A worked example at the 2026 family limit
An illustration, not a return: an Idaho resident for the full year with family coverage who makes the 2026 federal family limit of $8,750 as a deductible contribution has that federal deduction on Schedule 1, line 13, and it reaches Idaho inside the federal adjusted gross income entered on Form 40, line 7. That is $4,350 more than the self-only limit of $4,400 would allow.
What a mover should know
Every figure on this page is Idaho’s own rule. If you moved during the year, or live in one state and work in another, check each state’s page and return, because the documents read here describe only Idaho and none of them settles a part-year or two-state case. The federal side is the same everywhere: see CMG’s 2026 HSA contribution limits page, and state tax on HSA contributions for the other states checked.
What the documents do not say
- The instructions read are for tax year 2025, and they do not say how Idaho treats HSA earnings or distributions. The conformity statute was read for its date only; this page does not claim a full list of Idaho’s differences from the federal code.
Common mistakes
- Entering the HSA deduction on Form 40, line 21, which is the credit for income tax paid to other states.
- Entering the full federal deduction on Form 43, line 21 as a part-year or nonresident filer; the instructions say to enter Idaho’s portion.
- Assuming Idaho’s own medical savings account deduction applies to federal HSA contributions.
- Assuming the answer for one state applies to another, or that the state answer changes the federal limits.
Related: 2026 HSA contribution limits, state tax on HSA contributions, Idaho retirement taxes, and how Idaho taxes 401(k) and IRA withdrawals.
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Answer againSources
- Individual Income Tax Instructions Packet 2025 (EIN00046): https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_03-02-2026.pdf
- Idaho Code 63-3004 Internal revenue code: https://legislature.idaho.gov/statutesrules/idstat/title63/t63ch30/sect63-3004/
- Idaho Medical Savings Account: https://tax.idaho.gov/taxes/income-tax/individual-income/popular-credits-and-deductions/medical-savings-account/
- Revenue Procedure 2025-19 (Internal Revenue Service): https://www.irs.gov/pub/irs-drop/rp-25-19.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.