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.

[gotty10]

This is copied directly from the Idaho State Form 43 instructions for 2025:

Itemized Deductions

If you use federal Schedule A to itemize, use the following instructions for line 34:

• If federal Schedule A, line 5d, is:

$10,000 or less ($5,000 if married filing separately), enter the amount from federal Schedule A, line 5a.

More than $10,000 ($5,000 if married filing separately), subtract lines 5b and 5c from line 5e, and enter the amount here. Enter zero for any result less than zero.

In 2024, line 5e on Schedule A of the Federal return instructed the filer to use the smaller of $10,000 or amount on 5d.  For 2025, line 5e on Schedule A  instructs the filer to use the smaller of $40,000 or the amount on line d.   This is what the TurboTax experts are missing.  There is no need to wait for pending legislation.  Using the instructions, that are clearly stated in the Form 43 instructions, my figure should have been $7,525. not the $5,850 that was populated when I filed the return.  Turbo Tax is WRONG.  Can somebody from Turbo Tax PLEASE actually go to the instructions on the Idaho State Tax commission website and read the instructions with respect to line 34,  instead of continuing to give us incorrect answers?

[haleyrsd]

Agreed. Also, TurboTax please note the instructions posted above for Form 43, Line 24 are also the same as Form 40, Line 14. The formula for both Idaho forms need to be corrected.

[SusanY1]

To help us evaluate this issue more clearly, it would be helpful if we could have a diagnostic copy of a return with this issue. 

To send us a diagnostic copy (which is a copy of the data and entries stripped of personally identifying information, please follow these steps:

From any page in the TurboTax online software (except Tax Home):

1. Click on Tax Tools in the menu on the left hand side of the screen
2. Next, click on Tools
3. In the pop up box click on Share file with an agen”
4. Return to this thread and post the token code that appears on the screen so that we can link that file with this question
   
   
    

If you are using TurboTax desktop, the send file to agent command is under the Online menu.

[gotty10]

Thank you for responding.  Unfortunately, because I have already filed my Federal and Idaho State returns, the only available options when I go into TurboTax are the 'Tax Home' Screen and 'Documents' Screen.  Neither one of these windows shows the 'Tax Tools' option, so I am unable to provide that to you.  Is there a way for you to grant me permission to gain access to get to my input screens?

[DawnC]

Yes, when you land on the Tax Home page, scroll down and click on 2025, and then Add a State - that will open up your return and allow you to see the Tax Tools options so you can send the file securely.   

 How to access your return post filing

[haleyrsd]

Thank you for your response. I spoke with Ron in TurboTax Tech Support on the phone on Monday night and he had me generate the information you are requesting. The token is 1325140. He was supposed to call me last night after talking with his management, but I have not heard from him yet. I would appreciate any help from TurboTax to have this issue corrected ASAP, for my benefit as well as others from Idaho who may not catch the error.