Updated October 16, 2026. Quick answer: Idaho’s documents read do not mention inherited IRAs and give no deduction for IRA withdrawals: the instructions tell filers to enter “IRA distributions received while an Idaho resident or part-year resident”, and the one retirement deduction, Idaho Code 63-3022A, covers listed public plans.
Idaho at a glance
| Item | What the documents say |
|---|---|
| How the state taxes retirement-account income | Taxed as income at a flat rate; no deduction for IRA distributions in the documents read |
| Do the state’s documents address beneficiaries? | Not addressed: the documents read do not mention inherited accounts |
| Retirement exclusion or credit | None for IRAs; the retirement benefits deduction covers listed plans such as civil service, Foreign Service, certain Idaho police and firefighter funds and military retirement |
| Rate in the documents read | 5.3% flat, effective January 1, 2025 |
| State inheritance or estate tax | Not mentioned in the documents read |
| Changed for 2026? | The instructions say Idaho conforms to the IRC as of January 1, 2026; the documents read describe no other 2026 change to the rate or the retirement deduction |
What the Idaho documents say
Line 14 of the Idaho form is for IRA distributions: the instructions say to enter the taxable amount of “IRA distributions received while an Idaho resident or part-year resident”. The instructions print the rate as “the individual income tax rate is 5.3%”.
Idaho Code 63-3022A allows a deduction only for the taxpayers its paragraphs describe. It ends the list this way: “may not deduct any amount of retirement benefits under this section”. It names federal employees retirement system benefits among those that do not qualify.
The statute’s civil service paragraph reaches “the unmarried widow or widower of a retired employee”. That is a surviving-spouse provision for listed public plans, not a rule for IRA beneficiaries.
The federal 10-year rule and your Idaho tax year
IRS Publication 590-B says a beneficiary may be required to take the entire account balance by the “end of the 10th year following the year of the owner’s death”, with exceptions for certain beneficiaries. Because the balance generally has to come out within that window, the timing of each withdrawal decides which tax year it lands in. See the 10-year rule and annual RMDs, lump sum versus spreading withdrawals and inherited IRA rules.
Withholding and other state taxes
Whether a state withholds from a withdrawal is a separate rule: see state withholding on retirement withdrawals. For Idaho’s own death taxes, see Idaho inheritance tax.
What the documents do not say
- The documents read do not mention inherited accounts or beneficiaries of retirement accounts.
- The deduction’s dollar caps and age conditions apply only to the listed plans; none of the documents read applies them to an IRA.
- They say nothing about a deduction or credit for estate tax or income in respect of a decedent.
Common mistakes
- Assuming Idaho’s rule for your own retirement income also covers an account you inherited: read whether its documents address beneficiaries, and confirm the point with a Idaho preparer.
Related: state tax on inherited IRA withdrawals, state by state, whether Idaho taxes 401(k) and IRA withdrawals, Idaho retirement taxes, Idaho inheritance tax, inherited IRA rules, spouse versus non-spouse beneficiary rules, and state withholding on retirement withdrawals.
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Answer againSources
- Idaho Individual Income Tax Forms and Instructions 2025 (EIN00046, rev. 03-02-2026): https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_03-02-2026.pdf
- Idaho Code Section 63-3022A, Deduction of certain retirement benefits: https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3022A/
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/pub/irs-pdf/p590b.pdf
Sources: the primary documents linked above, read on October 16, 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.