Drake Tax Online - ID - New Tax Bill Conformity (2025)
Article #: 18953
Last Updated: February 19, 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 has not yet issued final guidance on how these changes should be reported on the Idaho return.
If you have Idaho returns that may be impacted:
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We recommend waiting to file until the state releases official guidance.
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Drake Tax will be updated once guidance is received.
We are also awaiting clarification from Idaho as to whether previously filed returns will require an amendment or if the state plans to automatically adjust affected returns.
This article will be updated as guidance is released by the Idaho State Tax Commission.
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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.