Idaho Admin. Code r. 35.01.01.254 - NONRESIDENT AND PART-YEAR RESIDENT INDIVIDUALS - SUBTRACTIONS ALLOWED IN COMPUTING IDAHO ADJUSTED INCOME
Section 63-3026A(6), Idaho Code. The following are allowable subtractions in computing the Idaho adjusted income of nonresident and part-year resident individuals. (4-6-23)
01.
Idaho Net Operating
Loss. An Idaho net operating loss deduction described in Section
63-3021, Idaho Code, and allowed
by Section
63-3022(c), Idaho
Code, may be subtracted to the extent the loss was incurred while the taxpayer
was residing in or domiciled in Idaho or to the extent the loss was from
activity taking place in Idaho. A net operating loss incurred from an activity
not taxable by Idaho may not be subtracted. (4-6-23)
02.
State and Local Income Tax
Refunds. State and local income tax refunds included in Idaho total
income may be subtracted unless the refunds have already been subtracted
pursuant to Section
63-3022(a), Idaho
Code. (4-6-23)
03.
Income Not
Taxable by Idaho. As provided in Section
63-3022(f), Idaho
Code, income that is exempt from Idaho income taxation by a law of the state of
Idaho or of the United States may be subtracted if that income is included in
Idaho total income and has not been previously subtracted. Income exempt from
taxation by Idaho includes the following: (4-6-23)
a. Interest income from obligations issued by
the United States Government. Gain recognized from the sale of United States
Government obligations is not exempt from Idaho tax and, therefore, may not be
subtracted from taxable income. (4-6-23)
b. Idaho lottery prizes exempt by Section
67-7439, Idaho Code. For prizes
awarded on lottery tickets purchased in Idaho a subtraction is allowed for each
lottery prize that is less than six hundred dollars ($600). If a prize equals
or exceeds six hundred dollars ($600), no subtraction is allowed. The full
amount of the prize is included in income. (4-6-23)
c. Certain income earned by American Indians.
An enrolled member of a federally recognized Indian tribe who lives on his
tribe's federally recognized Indian reservation is not taxable on income
derived within that reservation. (4-6-23)
d. Certain income earned by transportation
employees covered by Title 49, Sections
11502,
14503 or
40116, United States Code.
(4-6-23)
e. Certain income from
loss recoveries. See Section
63-3022R, Idaho Code.
(4-6-23)
04.
Military Pay. Qualified military pay included in Idaho total
income earned for military service performed outside Idaho may be subtracted.
Qualified military pay means all compensation paid by the United States for
services performed while on active duty as a full-time member of the United
States Armed Forces which full-time duty is or will be continuous and
uninterrupted for one hundred twenty (120) consecutive days or more. A
nonresident does not include his military pay in Idaho total income and,
therefore, makes no adjustment. (4-6-23)
05.
Social Security and Railroad
Retirement Benefits. Social security benefits and benefits paid by the
Railroad Retirement Board that are taxable pursuant to the Internal Revenue
Code may be subtracted to the extent the benefits are included in Idaho total
income. (4-6-23)
06.
Household and Dependent Care Expenses. The allowable portion of
household and dependent care expenses that meets the requirements of Section
63-3022D, Idaho Code, may be
subtracted if incurred to enable the taxpayer to be gainfully employed in
Idaho. To determine the allowable portion of household and dependent care
expenses, a percentage is calculated by dividing Idaho earned income by total
earned income. The qualified expenses are multiplied by the percentage. Earned
income is defined in Section
32(c)(2), Internal
Revenue Code. (4-6-23)
07.
Insulation and Alternative Energy Device Expenses. Expenses
related to the installation of insulation or alternative energy devices that
meet the requirements of Section
63-3022B or
63-3022C, Idaho Code, may be
subtracted. (4-6-23)
08.
Deduction for Dependents Sixty-Five or Older or with Developmental
Disabilities. One thousand dollars ($1,000) may be subtracted for each
person who meets the requirements of Section
63-3022E, Idaho Code. The
deduction may be claimed for no more than three (3) qualifying dependents. If a
dependent has not lived in the maintained household for the entire taxable
year, the allowable deduction is eighty-three dollars ($83) for each month the
dependent resided in the maintained household during the taxable year. For
purposes of this rule, a fraction of a month exceeding fifteen (15) days is
treated as a full month. (4-6-23)
09.
Adoption Expenses. The
allowable portion of adoption expenses that meets the requirements of Section
63-3022I, Idaho Code, may be
subtracted. To determine the allowable portion, calculate a percentage by
dividing Idaho total income by total income. The deduction allowable pursuant
to Section
63-3022I, Idaho Code, is
multiplied by the percentage. (4-6-23)
10.
Capital Gains Deduction. The
Idaho capital gains deduction allowed by Section
63-3022H, Idaho Code, may be
subtracted. (4-6-23)
11.
Idaho Medical Savings Account. (4-6-23)
a. The qualifying amount of contributions to
an Idaho medical savings account that meets the requirements of Section
63-3022K, Idaho Code, may be
subtracted. (4-6-23)
b. Interest
earned on an Idaho medical savings account may be subtracted to the extent
included in Idaho total income. (4-6-23)
12.
Technological Equipment
Donation. As provided by Section
63-3022J, Idaho Code, the lower of
cost or fair market value of technological equipment donated to qualifying
institutions may be subtracted, limited to the Idaho taxable income of the
taxpayer. (4-6-23)
13.
Worker's Compensation Insurance. As allowed by Section
63-3022(m), Idaho
Code, a self-employed individual may subtract the premiums paid for worker's
compensation for coverage in Idaho to the extent not previously subtracted in
computing Idaho taxable income. (4-6-23)
14.
Idaho College Savings
Program. The qualifying amount of contributions to a college savings
program that meets the requirements of Section
63-3022(n), Idaho
Code, may be subtracted. (4-6-23)
15.
Retirement Benefits. As
provided in Section
63-3022A, Idaho Code, a deduction
from taxable income is allowed for certain retirement benefits. To determine
the allowable portion of the deduction for certain retirement benefits, a
percentage is calculated by dividing the qualified retirement benefits included
in Idaho gross income by the qualified retirement benefits included in federal
gross income. The deduction allowable pursuant to Section
63-3022A, Idaho Code, is
multiplied by the percentage. (4-6-23)
16.
Health Insurance Costs. The
allowable portion of the amounts paid by the taxpayer during the taxable year
for insurance that constitutes medical care as defined in Section
63-3022P, Idaho Code, for the
taxpayer, spouse or dependents of the taxpayer not otherwise deducted or
accounted for by the taxpayer for Idaho income tax purposes may be subtracted.
To determine the allowable portion of the amounts paid for medical care
insurance, a percentage is calculated by dividing Idaho total income by total
income. The deduction allowable pursuant to Section
63-3022P, Idaho Code, is
multiplied by the percentage. (4-6-23)
17.
Long-Term Care Insurance. As
provided in Section
63-3022Q, Idaho Code, a deduction
from taxable income is allowed for the allowable portion of premiums paid
during the taxable year for qualifying long-term care insurance for the benefit
of the taxpayer, a dependent of the taxpayer or an employee of the taxpayer
that have not otherwise been deducted or accounted for by the taxpayer for
Idaho income tax purposes. To determine the allowable portion, a percentage is
calculated by dividing Idaho total income by total income. The deduction
allowable pursuant to Section
63-3022Q, Idaho Code, is
multiplied by the percentage. (4-6-23)
18.
Special First-Year Depreciation
Allowance. As provided by Section
63-3022O, Idaho Code, if a
taxpayer claims the special first-year depreciation allowance on property
acquired before 2008 or after 2009 pursuant to Section
168(k), Internal
Revenue Code, the adjusted basis of that property and the depreciation
deduction allowed for Idaho income tax purposes must be computed without regard
to the special first-year depreciation allowance. The adjustments required by
this subsection do not apply to property acquired after 2007 and before 2010.
(4-6-23)
a. Depreciation. The amount of
depreciation computed for Idaho income tax purposes that exceeds the amount of
depreciation computed for federal income tax purposes may be subtracted.
(4-6-23)
b. Gains and losses.
During the recovery period, the adjusted basis of depreciable property computed
for federal income tax purposes will be less than the adjusted basis for Idaho
income tax purposes as a result of claiming the special first-year depreciation
allowance. If a loss qualifies as a capital loss for federal income tax
purposes, the federal capital loss limitations and carryback and carryover
provisions apply in computing the Idaho capital loss allowed. (4-6-23)
i. If a sale or exchange of property results
in a gain for both federal and Idaho income tax purposes, a subtraction is
allowed for the difference between the federal and Idaho gains computed prior
to any applicable Idaho capital gains deduction. (4-6-23)
ii. If a sale or exchange of property results
in a gain for federal income tax purposes and an ordinary loss for Idaho income
tax purposes, the federal gain and the Idaho loss must be added together and
the total may be subtracted. For example, if a taxpayer has a federal gain of
five thousand dollars ($5,000) and an Idaho loss of four thousand dollars
($4,000), the amount subtracted would be nine thousand dollars ($9,000).
(4-6-23)
iii. If a sale or exchange
of property results in an ordinary loss for both federal and Idaho income tax
purposes, the difference between the federal and Idaho losses may be
subtracted. For example, if a taxpayer has a federal loss of three hundred
dollars ($300) and an Idaho loss of five hundred dollars ($500), the amount
subtracted would be two hundred dollars ($200). (4-6-23)
iv. If a sale or exchange of property results
in a capital loss for both federal and Idaho income tax purposes, apply the
capital loss limitations and subtract the difference between the federal and
Idaho deductible capital losses. For example, if a taxpayer has a federal
capital loss of six thousand dollars ($6,000) and an Idaho capital loss of
eight thousand dollars ($8,000), both the federal and Idaho capital losses are
limited to a deductible capital loss of three thousand dollars ($3,000). In
this case, no subtraction is required for the year of the sale . In the next
year, assume the taxpayer had a capital gain for both federal and Idaho
purposes of two thousand dollars ($2,000). The capital loss carryovers added to
the capital gain results in a federal deductible capital loss of one thousand
dollars ($1,000) and an Idaho deductible capital loss of three thousand dollars
($3,000). The taxpayer would subtract the difference between the federal and
Idaho deductible losses or two thousand dollars ($2,000) in computing Idaho
taxable income. (4-6-23)
Notes
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