SALT deduction error

[gotty10]

I just completed my 2025 federal and Idaho state returns through TurboTax.  Due to the $10,000 SALT deduction limitation in prior years, there is a calculation in the Idaho return that would add back only the portion of my state withholding that met this threshold.  So, in 2024, I paid $3,900 in property taxes, and $7,140 in Idaho withholding ($11,040 total), and my 'addback' for Idaho itemized deductions pertaining to state and local taxes on line 34 of the Idaho return reflected only $6,100, as the additional $1,040 in Idaho withholding was not actually deducted on my Federal return, as that portion exceeded the $10,000 SALT limitation.

Now, for 2025, I had $4,150 in property tax and $7,525 in Idaho withholding ($11,675 total).  The law has changed, and now the SALT limitation for 2025 is at $40,000, so the entire amount is deductible for Federal purposes.  However, my Idaho return line 34 shows the 'addback' of $5,850, instead of the entire $7,525 that I recognized on my Federal return.  I believe the entire $7,525 should have been added back when figuring my 2025 Idaho Itemized Deductions, since it was all deductible on my Federal for this year.

[LittleBirdie]

Just chiming in to say my SALT deduction is inaccurate as well.  It populates zero for my property taxes when it's comparing it to sales tax. Ugh!

[RobertB4444]

Idaho has not passed the laws that would put it in alignment with the federal laws yet.  They are still considering the bill that was proposed on January 29th.  

You can wait to file your Idaho tax return to see what decision the state legislature makes or you can file your return now with the $10,000 cap still in place and then amend your return later if the legislation passes.

@gotty10 

@LittleBirdie 

[haleyrsd]

The answer from the employee tax expert is incorrect. If you look at the instructions for the forms provided by the Idaho State Tax Commission at https://tax.idaho.gov/wp-content/uploads/forms/EFO00089/EFO00089_10-02-2025.pdf , the formula for Idaho Form 43/Line 34 and the formula for Idaho Form 40/Line 14 both take into account the updated SALT limits. Specifically, if the filer is married and Line 5d of Federal Schedule A is great than $10,000, the Idaho form instructions give the following formula (using data from Federal Schedule A):

Line 5e - Line 5c - Line 5b

Instead TurboTax is clearly using the formula:

$10,000 - Line 5c - Line 5b

I called TurboTax yesterday and am awaiting an answer with the results of their research.

[SusanY1]

Idaho legislation on conforming tax law is still pending as of today, February 3, 2026.  

If it is passed, with retroactive provisions, updates will be incorporated as quickly as possible. 

 

[haleyrsd]

I understand the Idaho State Legislature is discussing possible legislation to incorporate all the facets of the One Big Beautiful Bill Act; however if one follows the current instructions provided by the Idaho State Tax Commission for the 2025 forms in order to determine how much of the SALT deductions from Federal Schedule A need to be added back in as income for Idaho tax purposes, the result is different from what TurboTax is calculating for that add-in. This is why the TurboTax result is incorrect, regardless of pending legislation.