Boise, ID – Seniors in Idaho have several new and existing tax tools at their disposal in 2025 to reduce taxable income and protect their retirement funds. From expanded federal deductions to a brand-new state bonus, residents over 65 may find their tax burdens significantly reduced this year—if they know where to look.
Federal Extra Standard Deduction for Seniors Over 65
Seniors who are 65 or older are eligible for an additional deduction on top of the regular federal standard deduction. For the 2025 tax year, this means:
- Single filers or heads of household receive an extra $2,000.
- Married couples filing jointly receive $1,600 per spouse over 65.
- If a filer is blind and over 65, the deduction amount doubles.
These deductions reduce taxable income directly and are especially beneficial to seniors who do not itemize deductions.
The 2025 “One Big Beautiful Bill” Bonus for Seniors
A new addition in 2025, Idaho residents now benefit from the Senior Bonus Deduction introduced through the One Big Beautiful Bill (OBBB). This bonus offers:
- $6,000 deduction for qualifying singles.
- $12,000 deduction for qualifying married couples filing jointly.
To qualify, income must be:
- $75,000 or less for singles.
- $150,000 or less for joint filers.
The deduction phases out at 6% and disappears when income reaches $175,000 (single) or $250,000 (joint). Notably, it applies whether you itemize or use the standard deduction, offering flexibility for a wide range of filers as per Kiplinger.
Idaho-Specific State Tax Relief for Seniors
In addition to federal relief, Idaho seniors benefit from state-level exemptions and deductions that further ease tax burdens:
- Social Security and Railroad Retirement income is fully exempt from Idaho state taxes.
- The Retirement Benefits Deduction applies to certain qualified pensions, including:
- Military retirement
- Federal civil service pensions
- Idaho state and local government pensions
Eligibility generally applies to individuals 65 and older, or disabled residents 62 and older. The maximum deduction amount is updated annually by the Idaho State Tax Commission.
A Sample Scenario: How It Adds Up
For a 67-year-old single resident earning under $75,000, the total deductions could include:
- $2,000 extra federal deduction for age
- $6,000 OBBB bonus deduction
- Exemption for Social Security income
- State retirement pension deduction, if applicable
These combined benefits could move a filer into a lower tax bracket, significantly reducing their total tax bill for the year.
Filing Tips for Idaho Seniors in 2025
To take full advantage of these deductions:
- Mark your age accurately on both federal and Idaho state returns.
- If your income is near the OBBB threshold, plan distributions strategically to stay within the qualifying range.
- Don’t forget Idaho’s Retirement Benefits Deduction if you have a qualifying pension.
- Remember: the OBBB bonus deduction is temporary and scheduled to expire after the 2028 tax year.
Final Takeaway
Seniors living in Idaho in 2025 are in a strong position to benefit from a combination of federal, state, and special bonus deductions designed to keep more money in their pockets. By staying informed and planning ahead, retirees can leverage these tax advantages to stretch their income further and protect their financial future.
What are your thoughts on these new tax savings? Share your experience in the comments below.
