See Part Two below to see whether your income qualifies for the Idaho Retirement Benefit Deduction.
You may find this information in TurboTax Online, in the Idaho state income tax return, at the screen Retirement Annuity, click Learn more.
Idaho Retirement Benefit Deduction
The Idaho Retirement Benefit Deduction lowers your taxable income up to $48,216 ($72,324 if married filing jointly). To qualify, you need to meet both age/disability rules and receive eligible retirement benefits. Here's what you need to know:
Part One - Age, Disability, and Filing Status
You must meet one of the following:
- Be age 65 or older, OR
- Be age 62 or older and classified as disabled.
What counts as disabled:
- You're recognized as disabled by the Social Security Administration, Railroad Retirement Board, or Office of Management and Budget.
- You're a veteran with:
- A 10% or more service-connected disability, OR
- A nonservice-connected disability pension.
- You have a doctor-certified permanent disability and it won't improve.
If you are married, you must file jointly to qualify. If you are an unmarried surviving spouse earning qualifying survivor benefits, you may also qualify.
Part Two - Qualified Retirement Benefits
Your retirement income must come from one of these sources:
Civil Service Employees: Retirement benefits from the U.S. Civil Service Retirement System (CSRS), Foreign Service Retirement and Disability System (FSRDS), or their offset programs qualify if you became eligible before 1984. Benefits paid under the Federal Employees Retirement System (FERS) don't qualify.
If you received a CSA-1099, check the first digit of your account number:
- Digits 0-4 = CSRS benefits and qualify.
- Digits 7 or 9 = FERS benefits, so they don't qualify.
- Digit 8 = Look at your Notice of Annuity Adjustment to see how much comes from CSRS. Only CSRS amounts qualify.
Idaho Firefighters:
If your retirement benefits came from PERSI's Firefighters Retirement Fund (FRF), they might qualify. Look at your 1099-R for the FRF designation in your account number. Benefits from the PERSI Base Plan don't qualify.
Idaho Police Officers:
- Benefits paid from city police retirement funds closed to new members before 2012 might qualify, including retirement systems managed by PERSI for police officers not covered by Social Security.
- Examples include retirement funds for Coeur d'Alene, Lewiston, Pocatello, or the old Idaho Falls Police Retirement Fund (IFP). Check your 1099-R for the IFP designation.
- Benefits from the PERSI Base Plan don't qualify.
Railroad Disability Pensions: Disability pensions under the Railroad Retirement Act might qualify. If you're under the minimum retirement age, these payments may be reported as wages on Form 1040 or 1040-SR, Line 1, rather than on RRB-1099 or RRB-1099-R.
Retired Service Members: Military retirement benefits qualify if:
- You're classified as disabled, OR
- You're age 62 or older, OR
- You're under age 62, worked during the year, and earned enough to file a federal return.
To claim this deduction, you need to meet both the age/disability rules in Part One and receive qualifying retirement benefits from Part Two.
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