Updated October 4, 2026. Quick answer: Partly. Idaho’s Form 39R gives a “Retirement Benefits Deduction for Retired Service Members” that is capped for 2025 at $48,216 for a single filer or $72,324 for a joint return, reduced by Social Security and Railroad Retirement benefits.
How Idaho treats military retired pay
| Item | What the documents say |
|---|---|
| Treatment | Retirement benefits deduction for retired service members, claimed on Form 39R |
| Cap for 2025 | $48,216 single, $72,324 married filing jointly, reduced by the Social Security and Railroad Retirement benefits the taxpayer and spouse received, and never more than the qualified benefits included in federal income |
| Who qualifies | One of three: classified as disabled at any age, age 62 or older, or under 62 and employed during the year with enough income to be required to file a federal return |
| Rate on the rest | 5.3% above the zero bracket on the 2025 schedule |
A $30,000 example
A single filer aged 62 or older with $30,000 of military retired pay and no Social Security or Railroad Retirement benefits is under the $48,216 cap, so the whole $30,000 is deductible.
The cap is reduced by Social Security and Railroad Retirement benefits received, so a retiree who draws them has less room under it.
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What changes in 2026
No 2026 change is printed in the documents read.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Publication 3, Armed Forces’ Tax Guide.
Related: whether Idaho taxes pensions, how Idaho taxes retirement income, military retirement pay by state, and the military retirement calculator.
Sources
- Form 39R Resident Supplemental Schedule 2025 and Instructions (EIN00046 2025): https://tax.idaho.gov/wp-content/uploads/forms/EFO00088/EFO00088_03-02-2026.pdf
- Idaho Code section 63-3022A, Deduction of certain retirement benefits: https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3022A
- Individual Income Tax Rate Schedule: https://tax.idaho.gov/taxes/income-tax/individual-income/individual-income-tax-rate-schedule/
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.