Key figures
Idaho advisory
2026, with sources
The research credit after HB 559
Idaho’s credit for research activities is 5% of qualified research expenses for research conducted in Idaho above a base amount, plus 5% of basic research payments for Idaho research. It is nonrefundable, limited to Idaho tax after other credits, and the excess carries forward up to 14 years.
The 2026 change is the coordination rule in §63-3029G: amounts deducted or amortized under §174 or §174A that are qualified research expenses are not eligible for the credit. With federal and Idaho expensing of domestic research back from 2025, companies need to model whether the Idaho deduction or the Idaho credit is worth more; they can’t have both on the same costs.
A conforming, low-rate state
For founders, Idaho’s appeal is predictability: flat rates, federal conformity updated every year, and no city payroll taxes. The adjustments that remain — bonus depreciation, the 2022–2024 research transition, the Idaho NOL — are mechanical once the provision tracks them.
- Flat 5.3% corporate and individual rates.
- Annual conformity to the Internal Revenue Code, including §1202.
- No local income or payroll taxes, and no state paid leave program.
- Minimum wage tied to the federal $7.25.
Where founders get Idaho wrong
Most mistakes are about registration, not rates. A remote employee in Idaho means withholding, unemployment insurance, workers’ compensation endorsed for Idaho, new-hire reporting and a corporate return — even if the company sells nothing there.
The federal baseline
This page covers what Idaho adds. The federal rules underneath it apply here too.
Common questions
Is the Idaho research credit still worth claiming?
Less than it used to be. Idaho’s credit is 5% of qualified research done in Idaho above a base amount, nonrefundable, with a 14-year carryforward. But Idaho Code §63-3029G now says research costs a taxpayer deducts or amortizes under §174 or §174A are not eligible for the credit, so a company expensing its research for Idaho can’t also claim the credit on the same dollars.
Does Idaho follow the federal QSBS exclusion?
Idaho begins with federal taxable income and conforms to the Internal Revenue Code as updated each year, and it has not written an exception for §1202, so a gain excluded federally is generally excluded for Idaho too. That is a meaningful difference from Idaho’s neighbors California and, from 2026, Oregon.
Advisory next door
- MTMontana advisoryMontana is the one state where employees can’t be fired at will after probation; it has no R&D credit but credits half of employer FICA on new jobs through 2028.
- NVNevada advisoryNo income tax means no R&D credit and no QSBS question. Incentives are GOED abatements, and the real risks are in wage rules and Secretary of State filings.
- OROregon advisoryOregon disconnects from the federal QSBS exclusion and bonus depreciation from 2026, offers no general R&D credit, and adds a $1,000-per-job credit for 2026–2031.
- UTUtah advisoryUtah’s research credit is non-refundable, with a 5% part that carries forward 14 years and a 7.5% part that doesn’t. QSBS follows the federal rule.
- WAWashington advisoryWashington has no corporate income tax and no general R&D credit; the planning issues are B&O on revenue, the capital gains tax on founders’ exits, and a 9.9% tax on income over $1 million from 2028.
- WYWyoming advisoryWyoming has no income tax for companies or people, so R&D credits, QSBS and NOL questions don’t arise; the planning issues are sales tax on downloaded software and keeping the registration current.
Founder guides on this
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- EquityStock options, 409A valuations and vesting for startupsHow option strike prices are set by a 409A valuation, how vesting and the cliff work, and why ASC 718 makes every grant an expense on your P&L.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
More of the Idaho guide
- AccountingAccounting and state tax in IdahoCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in IdahoSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in IdahoPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in IdahoWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in IdahoRegistering to do business, annual reports, franchise tax and the filing calendar
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.