Work in Washington, Live in Idaho: Tax Filing Guide

Washington tax status

Does Washington tax the income you earn there?

Washington does not currently have an individual income tax, so no Washington income tax is withheld from your paycheck and you do not file a Washington income tax return. That will change for very high earners: the 2026 Legislature passed Senate Bill 6346, which starts a 9.9% income tax on January 1, 2028 for individuals and joint filers with adjusted gross income above $1 million.

Washington does take two payroll premiums. The WA Cares long-term care premium is 0.58% of gross wages, but workers who live outside Washington are eligible to apply for an exemption. The Paid Family and Medical Leave premium is 1.13% of wages starting January 1, 2026, with employees paying 71.43% of it and employers 28.57%. Paid Leave covers service localized in Washington, so a commuter who works in Washington usually pays it.

Washington also taxes long-term capital gains, but only gains allocated to Washington. For an Idaho resident, gains from stocks and other intangible property are allocated to Washington only if you were domiciled in Washington when you sold. If you are self-employed, Washington's business and occupation (B&O;) tax may apply to gross receipts from business activity in the state; it is a tax on businesses, not on individual earnings.

Idaho resident obligations

What do you owe Idaho as a resident?

Idaho taxes its residents on all income regardless of where it is earned. You are an Idaho resident if Idaho is your domicile, or if you keep a home in Idaho for the entire tax year and spend more than 270 days of the year there. As a resident, you report your total federal adjusted gross income on Idaho Form 40. The state applies a flat rate of 5.3 percent on taxable income above 4,811 dollars for single filers and above 9,622 dollars for married filers filing jointly. Income below those thresholds falls in a zero percent bracket. These figures are from the 2025 rate schedule published by the Idaho State Tax Commission.

Idaho conforms to the federal standard deduction, which was 15,750 dollars for single filers and 31,500 dollars for married filing jointly in 2025. You must file an Idaho return if your gross income exceeds those same standard deduction thresholds. Because Washington does not tax your wages, there is no double taxation and no credit to claim on your Idaho return for taxes paid to another state. You simply report all income on Form 40 and pay Idaho tax on the full amount.

Employer withholding

Will your Washington employer withhold Idaho tax?

A Washington employer does not have to withhold Idaho income tax if you are not physically working in Idaho. Idaho does allow the employer to open an Idaho withholding account and withhold Idaho tax voluntarily when the employee lives in Idaho and wants it, so it is worth asking payroll.

If nothing is withheld, Idaho does not require estimated tax payments from individuals, but you can make payments at any time, which avoids a large bill in April. Prepayments matter for extensions: to avoid Idaho's late filing penalty on an extended return, withholding, estimated payments and applied refunds must equal at least 80% of the current year's tax or 100% of the prior year's tax. Payments can be made online through the Tax Commission's website or with a Form 51 voucher.

Filing requirements

Which tax returns do you file?

You file one state return: Idaho Form 40, the resident individual income tax return. Report all of your income on this form, including wages earned in Washington. Most Idaho residents also claim the Food Tax Credit, formerly called the grocery credit, on line 43 of Form 40. It is either $155 each for you, your spouse and your qualifying dependents or the actual sales tax you paid during the year, up to $250 each. If you ever pay income tax to a third state on income Idaho also taxes, Idaho Form 39R is where you calculate the credit for tax paid to the other state.

You do not file a Washington state income tax return, because Washington has no individual income tax. You also do not file a nonresident return in any other state unless you earned income in a third state during the year. On the federal side, file Form 1040 as usual. Keep your W-2, any records of estimated tax payments made with Form 51, and a copy of your completed Idaho return for at least seven years, as the Idaho State Tax Commission recommends retaining records for that period. The Idaho filing deadline matches the federal deadline, typically April 15.

Remote work

What if you work remotely from Idaho for a Washington employer?

If you work remotely from your home in Idaho for a Washington-based employer, the tax outcome is the same as commuting. Idaho taxes you as a resident on all income, so it does not matter whether you cross the border daily or work from your living room. Washington still has no income tax to apply. The key sourcing difference is that when you physically perform work in Idaho, that income is Idaho-source income regardless of where your employer is located. This distinction matters little for Idaho residents since Idaho taxes all of your income anyway, but it can matter for nonresidents in other situations.

Washington does not apply a convenience-of-the-employer rule. The state has no income tax, so it has no mechanism to claim your remote work days. If you split time between a Washington office and an Idaho home office, Idaho still taxes 100 percent of your income as a resident. The state where you physically sit while working determines sourcing, but your Idaho residency controls the total tax obligation in this scenario.

Worked example: Idaho resident earning wages in Washington

Single filer, W-2 wages only, 2025 Idaho rate schedule. Illustrative, not a tax projection.

Mid-year move

What happens if you move between Idaho and Washington during the year?

If you change your permanent home from one state to the other during the tax year, you become an Idaho part-year resident. Part-year residents file Idaho Form 43 instead of Form 40. On Form 43, you report all income earned while you were an Idaho resident plus any Idaho-source income earned while you were not a resident. Days you worked in Idaho before or after your move count as Idaho-source income. Days you worked in Washington while you were a Washington domiciliary are not taxed by Idaho.

You determine your residency status based on your domicile, which is the state you intend to make your permanent home. Simply working across the border does not change your domicile. If you maintain an Idaho home while claiming to have moved to Washington, the Idaho State Tax Commission may challenge the change. Keep documentation of your move: updated driver's license, voter registration, lease or purchase records, and utility connection dates in the new state all help support the transition on audit.

Wrong state withholding

What if your employer withholds to the wrong state?

If your Washington employer mistakenly withholds tax for a state other than Idaho, or if a payroll provider codes your work location incorrectly, you will need to correct the withholding. Check your pay stub to confirm which state, if any, is receiving withholding from your wages. If the employer is sending withholding to a state you did not work in, ask payroll to correct the coding and provide you with a corrected W-2 (Form W-2c) if needed.

You may also need to file a nonresident return in the incorrect state to recover the withheld amount as a refund. In the meantime, Idaho still expects payment of its tax on your income. Any gap between what was sent to the wrong state and what you owe Idaho is your responsibility until the correction is processed. Fix the withholding as early in the year as possible to avoid a large balance due at filing time. Review your first pay stub of each year to confirm the coding is accurate.

Local taxes

Do any other local taxes apply?

Washington has no individual income tax, so there is no Washington city or county income tax on your wages either. On the Idaho side, your obligation is the state return on Form 40.

If you also earn income in a third state that imposes local income taxes, check that jurisdiction's rules separately. Self-employed individuals working in Washington should verify whether their business activity triggers Washington's B&O; tax, which is reported separately from income taxes. This is general information, not tax advice.