Idaho no tax on tips calculator after House Bill 559

Idaho conformed: House Bill 559 adopts the federal deductions for qualified tips, overtime and car-loan interest, and the State Tax Commission reissued 2025 forms so tipped workers can claim tips at the 5.3% rate.

Your Idaho tips

State where you work Qualified tips this year

Voluntary cash and card tips on your W-2, 1099 or Form 4137 — not service charges.

Tax year

2025202620272028

Filing status Other income in your AGI

Wages without the tips, plus any other income (both spouses if filing jointly).

Your occupation The 71 Treasury Tipped Occupation Codes in the final rule (TD 10044).

How you are paid

Employee (W-2) Self-employed (1099)

More options

Itemized deductions (if larger than the standard deduction)

State marginal rate override (%) Leave blank to use the state’s published rate for your bracket.

Federal income tax saved in 2026Deduction $18,000 at 12% $2,160

$18,000 of the $25,000 cap used (72%)

Qualified tips	$18,000
After the $25,000 cap	$18,000
Income phase-out (MAGI $48,000)	$0
Tips deduction	$18,000
Federal tax before → after	$3,580 → $1,420
Social Security & Medicare still due on tips	$1,377
Idaho 2026: State allows the federal tips amount ($18,000 × 5.3%)	$954
Total income tax saved	$3,114

What the estimate leaves out

Claiming it on an Idaho return

Conformity was signed after filing season had opened, so the Tax Commission first told filers to wait for guidance on the conformity deductions and then updated Form 40 (line 18) and Form 43 (line 40). A 2025 Idaho return filed on the earlier forms may need an amendment to pick up the deduction. Idaho Code § 63-3024 taxes income over $2,500 ($5,000 joint) at 5.3%, so the deduction is worth about 5.3 cents per dollar for most workers.

Idaho figures

Cash wage / minimum	$3.35 / $7.25
In force	July 1, 2026
Next change	none scheduled
Tipped threshold	More than $30 a month in tips
Tips on the 2025 return	state allows the federal tips amount. House Bill 559 conforms Idaho to “the deductions for qualified tips from wages”; the updated 2025 Form 40 claims it on line 18. Source: Idaho State Tax Commission
Tips on the 2026 return	state allows the federal tips amount. The conformity carries forward; no Idaho add-back was enacted. Source: Idaho State Tax Commission

Idaho’s $3.35 cash wage

Idaho follows the federal $7.25 minimum but requires $3.35 in cash for tipped employees, $1.22 more than federal law, leaving a $3.90 tip credit for workers receiving more than $30 a month in tips.

A Boise server

A $17,000 tips deduction saves $1,950 federally and about $901 in Idaho, $2,851 together. For a 30-hour week, $3.35 an hour plus $110 of tips already passes the $218 minimum, so no make-up is due.

Check an Idaho workweek

Employer make-up owed$3.35 cash wage + tips must reach $7.25 an hour. $0

Minimum for the hours	$232
Cash wage paid	$107
Tips counted toward the minimum	$150
Your effective hourly pay	$8.04

How the make-up rule works

Where these figures come from

Idaho State Tax Commission · Idaho Department of Labor
Update on filing 2025 Idaho income taxes now that conformity is law (House Bill 559) (2026-03)
Idaho Code § 63-3024 (2025)
Minimum Wages for Tipped Employees (table by state) (2026-07-01)

Federal rules: how the deduction works. Nearby: Washington, Oregon, Nevada, Utah, Wyoming, Montana.

Figures verified against primary sources on October 5, 2026