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.
