Active-duty pay
Taxed
Active-duty pay taxable to ID residents.
State Guide · ID
Idaho — Military Tax Treatment
Idaho's retirement deduction is part of a general retirement income exclusion for those 65 or disabled — it is not military-specific. Most military retirees retire in their 40s and won't qualify for this deduction until they hit 65.
Tax treatment at a glance
Guard & Reserve drill pay
Taxed
Guard and Reserve drill pay is taxable Idaho income.
Military retirement pay
Partially Exempt
Retirement income subtraction available for those 65+ or disabled: up to $40K married filing jointly / $20K single. Not military-specific — applies to all pension income.
The numbers · verified for tax year 2025
Top marginal rate
5.3%
Retirement-pay exemption
Up to $48,216 · age 62+
Idaho allows a military-retirement deduction only if the retiree is age 62+, disabled, or (under 62) worked enough to be required to file a federal return; the 2025 max is $48,216 single / $72,324 MFJ, reduced dollar-for-dollar by any Social Security/Railroad Retirement received.
Standard deduction
Idaho is a flat 5.3% for 2025 and conforms to the federal standard deduction ($15,000 single / $30,000 MFJ).
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — Idaho included.
Survivor Benefit Plan (SBP)
Follows retirement
SBP may qualify for the retirement income subtraction — the cap is shared with all pension income. Verify with Idaho Tax Commission.
Federal rules that override state law
SCRA — Servicemembers Civil Relief Act
Active-duty servicemembers pay state income tax only to their state of legal domicile — not the state where they are stationed. If you are from Texas and stationed in Idaho, Idaho cannot tax your military pay. This applies during all active duty periods and during Guard/Reserve mobilizations on federal (Title 10) orders.
MSRRA — Military Spouses Residency Relief Act
Military spouses can maintain their home-state domicile even when living in a different state due to their servicemember's orders. A spouse who is a Texas resident following their servicemember to Idaho can keep Texas as their tax domicile and avoid Idaho state income tax on their wages.
Guard & Reserve — the SCRA gap
SCRA pay protections apply during federal (Title 10) activation orders. During routine drill weekends and state-only activations, Guard and Reserve members are state residents serving in their home state — SCRA does not protect their drill pay from state income tax. Whether Idaho exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01The deduction is for ALL pension and retirement income — $40K MFJ, $20K single — other pension income competes with military retirement for the same cap
- 02Idaho Form 39R for retirement income deduction — age/disability qualifier required
Veteran-specific tax benefits
Disabled veteran property tax reduction.
Official authority
https://tax.idaho.gov/ ↗State tax law changes annually. Verify current rules with the Idaho Department of Revenue before making any tax decision.
Idaho military tax — common questions
Does Idaho tax military retirement pay in 2026?
Idaho partially taxes military retirement pay. Retirement income subtraction available for those 65+ or disabled: up to $40K married filing jointly / $20K single. Not military-specific — applies to all pension income.
Does Idaho tax active-duty military pay?
Idaho taxes active-duty military pay for state residents. Active-duty pay taxable to ID residents. Under the SCRA, Idaho can only tax the military pay of service members who are legally domiciled in Idaho — not those merely stationed there.
Does Idaho tax National Guard and Reserve drill pay?
Idaho taxes Guard and Reserve drill pay. Guard and Reserve drill pay is taxable Idaho income.
Is VA disability compensation taxed in Idaho?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including Idaho — taxes it as income.
If I'm stationed in Idaho but claim another state, can Idaho tax my military pay?
No. Under the Servicemembers Civil Relief Act (SCRA), active-duty pay is taxable only by your state of legal domicile, not the state where you are stationed. If your domicile is elsewhere, Idaho cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
Related tools
Other state guides