This year, the legislature passed legislation that:
- Increased the standard deductions:
- Single = $12,000
- Head of Household = $18,000
- Married Filing Jointly = $24,000
- Eliminated personal exemptions.
- Eliminated dependent exemptions.
- Eliminated or capped most itemized deductions.
- Provided for an Idaho nonrefundable Idaho child tax credit of $205 for each qualifying child.
- Dropped the individual income tax rate by 0.475%. The top rate for individuals is now 6.925%.
These changes could make significant changes to employee withholding and ultimately the taxes owed when they file their 2018 income tax return. We are encouraging taxpayers to review their W-4 to see if they have the right amount of state tax withheld from their paycheck. Having too little tax withheld can mean an unexpected tax bill when they file in 2019. Having too much tax withheld can mean less money in their paychecks.
The ISTC has developed a 2018 W-4 Worksheet for Idaho - the federal form W-4, Employee’s Withholding Allowance Certificate, contains instructions to calculate your federal (IRS) withholding allowances. Use this form to calculate the number of Idaho allowances and estimate any additional withholding you should claim on your W-4 for Idaho.