Deduction of certain retirement benefits

Official textlegislature.idaho.govlast amended 202524 subsections

63-3022A. (1) An amount specified by subsection (2) of this section of the following retirement benefits may be deducted by an individual from taxable income:

(a) If such individual has either attained age sixty-five (65) years or has attained age sixty-two (62) years and is classified as disabled:

(i) Retirement annuities paid to a retired employee or the unmarried widow or widower of a retired employee by the United States of America under the:

1. Civil service retirement system; or

2. Foreign service retirement and disability system; or

3. Offset program of the civil service retirement system or foreign service retirement and disability system.

(ii) Retirement benefits paid from the firefighters’ retirement fund of the state of Idaho to a retired firefighter or the unremarried widow or widower of a retired firefighter.

(iii) Retirement benefits paid to a retired Idaho city police officer:

1. By a city or its agent in regard to a police retirement fund that no longer admits new members and on January 1, 2012, was administered by a city in this state; or

2. In regard to a police retirement fund that no longer admits new members and on January 1, 2012, was administered by the public employee retirement system of Idaho; or

3. By the public employee retirement system of Idaho to a retired police officer in regard to Idaho employment not included in the federal social security retirement system; or

4. An unremarried widow or widower of a person described in 1., 2., or 3. of this subparagraph.

(b) Retirement benefits paid by the United States of America to a retired member of the military services of the United States, or the unremarried widow or widower of such member, who:

(i) Is classified as disabled, as defined in subsection (4) of this section;

(ii) Has attained the age of sixty-two (62) years by the end of the tax year; or

(iii) Was employed during the tax year and received sufficient income from such employment to be required to file a federal return under section 6012(a)(1) of the Internal Revenue Code.

(2) The amount of retirement benefits that may be deducted from taxable income shall be an amount not in excess of maximum retirement benefits under the social security act, as amended, on the date on which this act is passed and approved, including adjustments to be made based on consumer price index adjustments provided in section 215 of the social security act. The state tax commission shall ascertain benefit changes made in accordance with the social security act and publish the appropriate deduction amounts provided by this section reflecting such changes annually. Maximum retirement benefits under the social security act shall mean:

(a) In the case of a taxpayer who files a joint return with the taxpayer’s spouse for the tax year, an amount equal to the maximum social security benefits payable for the tax year to a person attaining full retirement age in the tax year who has earned the maximum earnings creditable under social security for the years used in the computation of his benefits and whose spouse has no social security benefits except those payable on his record of earnings.

(b) In the case of a taxpayer who is not married, an amount equal to maximum social security benefits payable for the tax year to a person attaining full retirement age in the tax year who has earned the maximum earnings creditable under social security for the years used in the computation of his benefits.

(c) In the case of an unremarried widow or widower, an amount equal to the maximum social security benefits payable for the tax year to a widow or widower attaining full retirement age in the tax year who has no social security benefits except those to which he or she is entitled on his or her deceased spouse’s record and whose spouse had received no reduced retirement benefits prior to his or her death and whose spouse had earned the maximum earnings creditable under social security for the years used in the computation of his or her benefits under social security.

(d) Maximum retirement benefits shall, in every case, take into consideration and be adjusted to reflect adjustments that would be made to such amounts had they been received as social security benefits as the result of the receipt of earnings in excess of earnings limitations. The terms in this paragraph are those defined in the social security act.

(e) Taxpayers not described in paragraphs (a), (b), (c), and (d) of this subsection may not deduct any amount of retirement benefits under this section. This includes retirement benefits paid by the federal employees retirement system or foreign service pension system.

(3) The total deduction under this section may not exceed the total amount of retirement benefits or annuities that are described in subsection (1) of this section and that are included in the taxpayer’s gross income in the tax year. If the taxpayer or the taxpayer’s spouse receives retirement benefits under the federal railroad retirement act or the federal social security act in the tax year, then the amount of any retirement annuities computed under subsection (2) of this section shall be reduced by the amount of such federal railroad retirement act and federal social security act retirement benefits received by either the taxpayer or the taxpayer’s spouse, and the lesser of the amount so computed or the total amount of retirement benefits or annuities that are described in subsection (1) of this section and that are included in the taxpayer’s gross income shall constitute the allowable deduction. Furthermore, the allowable deduction as calculated under this section may be subject to additional limitations under section 63-3026A(6), Idaho Code, and the rules promulgated thereunder.

(4) As used in this section, the word "disabled" shall mean an individual who is a disabled person described in section 63-701, Idaho Code, or an individual who qualifies as a person with a "permanent disability" under section 49-117(7)(b)(iv), Idaho Code.

Amendment history

63-3022A, as added by 1973, ch. 278, sec. 2, p. 591; am. 1976, ch. 94, sec. 1, p. 312; am. 1979, ch. 86, sec. 3, p. 210; am. 1997, ch. 58, sec. 1, p. 108; am. 2000, ch. 26, sec. 3, p. 47; am. 2004, ch. 30, sec. 3, p. 59.; am. 2012, ch. 13, sec. 1, p. 23; am. 2013, ch. 4, sec. 2, p. 9; am. 2015, ch. 34, sec. 1, p. 71; am. 2025, ch. 13, sec. 2, p. 42; am. 2025, ch. 302, sec. 1, p. 1280.

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