Idaho Basic Instructions
In preparing the state tax return, most information will carry from the federal return. The income and withholding will carry to the state from entries on the W-2. Be sure the state information has been entered on the W-2 input screen. Other income items will carry from the federal input according to the state designated. If you have additional information to enter, click on the 'tax forms' button. Input for all the state forms is available.

Itemized or Standard Deduction
You may use either your federal itemized deductions or standard deduction, whichever benefits you more. TaxEngine will automatically determine which is better for you.

Your itemized deductions are the same as those used on your federal Form 1040. Idaho requires that all state or local income or general sales taxes shown on federal Schedule A be subtracted from your total itemized amount before you use this figure to reduce your income. Because of this addback, it may be more beneficial to itemize for federal purposes, but use the standard deduction for Idaho.

You must itemize if you are married, filing a separate return and your spouse itemizes.

Permanent Building Fund

You aren't required to pay the $10 permanent building fund tax if:
1 - your gross income is less than the amount specified for you filing status
2 - you were receiving Idaho public assistance payments at the end of the year
3 - you or your spouse were legally blind at the end of the tax year

The need for the building tax will be automatically determined. If you are receiving public assitance payments, check the box on the general information screen.

Grocery Credit

The grocery credit is automatically computed by mutiplying the total exemptions, Form 40 line 6d, by $20. If you are 65 or older an additional $15 will be added to the total. If you qualify for the gorcery credit and aren't required to file a return, the credit may be claimed on Form 24. You may obtain this form from any office of the Idaho State Tax Commission or on the Idaho web site at tax.idaho.gov. The refund claim is due on or before April 15, 2008. Form 24 cannot be electronically filed.

Part-Year Resident

You are considered a part-year resident of Idaho if, during 2007, you moved your permanent home into or out of Idaho. You must pay Idaho income tax on income you earned, received or accrued while living in Idaho. You must prepare a Form 43 to allocate your income to Idaho and other states.

TaxEngine will automatically allocate the income based on the information entered on the federal return. Be sure to enter the state information on the federal W-2 input form.

If you need to make additional entries on your nonresident return, click on the tax forms button at the top of the screen. Click on Idaho. You will be able to access the Idaho forms.

Nonresident

If you are a resident of another state and worked in Idaho during 2007, you are required to file an Idaho income tax return (Form 43) and are required to pay Idaho income tax on salary wages and other employee compensation for work performed in Idaho. If you are a Idaho resident but worked in another state, all of your income is subject to tax, no matter where it is earned, except income earned from out-of-state business activity.

Military Personnel

Military personnel whose domicile (home of record) is Idaho and who are required to file a federal income tax return must file a return and report all of their income regardless of where they were stationed. Credit against Idaho tax may be taken for any net income tax paid to nother state on nonmilitary income and income earned by the spouse, provided the income was included on the Idaho return.

Amended Return

Use Form 40 or 43 to amend your return. Check the amended return box. Enter the number corresponding to the reason(s) for amending. Complete all of the forms and schedules using the correct amounts. If you are amending a Form 43, be sure to check the nonresident box as well as the amended return box.

If you are amending Form 40EZ, use Form 40.

Maintaining a Home for Aged and/or Developmentally Disabled

There are two possible deductions for maintaining a home for the aged or disabled. The first is as a subtraction to reduce the Idaho taxable income. For the subtraction, you may deduct $1,000 for each family member, not including yourself or your spouse, who is 65 or older or for each family member, including yourself and your spouse, who is developmentally disabled for whom you maintain a household and provide more than one-half of his support for the year. No more than three deductions of $1,000 are allowed.

The second possibility is as a refundable payment or credit. The information for this credit is entered on Section E of the Form 39R. The allowable credit is $100 for maintaining a home for an immediate family member age 65 or over NOT including yourself or your spouse, or a family member with a developmental disability, including yourself and your spouse. The limit is $300. This option is most beneficial when the Idaho gross income is less than than the filing requirement.

The first option, the subtraction, is automatically computed. If you wish to take the credit, enter the information in Schedule E at the bottom of Form 39R. If any entries are made in Section E the system will not compute the subtractions for Section B.