Drake Tax - ID - New Tax Bill Conformity (2025)
Article #: 18948
Last Updated: March 06, 2026
Idaho has enacted legislation updating its conformity to the Internal Revenue Code (IRC) to adopt most federal changes made under the new tax bill. The changes are retroactive to January 1, 2025, and may impact Idaho individual and business returns.
Because Idaho updated its conformity to the Internal Revenue Code (IRC):
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Most federal changes affecting adjusted gross income and taxable income now apply to Idaho.
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Examples of impacted items may include treatment of tip income, overtime income, enhanced senior deductions, and research and experimentation expense deductions.
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Certain new federal deductions may flow through to the Idaho return.
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Idaho continues to decouple from some federal provisions (for example, bonus depreciation under IRC §168(k)).
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Idaho addition and subtraction modifications may apply.
Important The Idaho State Tax Commission announced on March 3, 2026, that Form 40 and Form 43 have been updated to reflect the larger standard deduction amounts under the new conformity changes.
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Idaho patch 10, available on March 6, 2026, updates the standard and itemized deduction amounts.
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Additional changes to address the inclusion of Schedule 1-A deductions will be implemented in Drake Tax over the coming days. More info will be added at that time.
Returns Already Filed
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Taxpayers who already filed using the previous standard deduction amounts will automatically receive the larger standard deduction; no amended return is required.
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Taxpayers who itemized and filed without including the applicable Schedule 1-A deductions on their Idaho return will need to file an amended return to reflect the corrected amount. Program changes are not finalized. We recommend that you wait to file an amended ID return until all changes are implemented.
Related Links
Note This new tax bill, was signed into law on July 4, 2025. The One Big Beautiful Bill Act (OBBB or OB3) is now also being referred to by lawmakers as the Working Families Tax Cut Act. You may see one or both names used, but they refer to the same set of tax changes.