How to File LLC Taxes in Idaho? (Step by Step Guide)

Jon Morgan
Published by Jon Morgan | Co-Founder & Chief Editor
Last updated: February 11, 2025
FACT CHECKED by Lou Viveros, Growth & Transition Advisor
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If you're running a limited liability company (LLC) in Idaho, you must report certain standard income taxes to the state and federal governments.

To help you take the right steps, we teamed up with our certified LLC accountants with over twelve years of experience.

We spent the past five weeks researching the Idaho state tax commission for the most updated information on tax filing.

Read along to understand the state and federal income taxes your LLC is expected to pay in Idaho.

Quick Summary

  • Multi-member LLCs are taxed similarly to partnerships, and each member must complete the Schedule K-1 form on their personal tax filings.
  • Idaho corporations and LLCs with the C-corp status must pay a 21% federal income tax and a 6% corporate income tax.
  • Limited liability companies that sell goods or services to consumers must collect the Idaho sales tax of 6%.


How Are LLCs Taxed in Idaho?

Two agents after discussion about llc taxes in idaho

LLCs are taxed in Idaho based on the number of members they have.

Aside from the pass-through taxation benefits, an LLC with one member is viewed as a sole proprietorship, while an LLC with multiple members is taxed as a partnership.

The Idaho state tax commission also allows LLCs to be taxed as a C or S corporation by completing special forms with the Internal Revenue Service (IRS).

State Taxes for Idaho LLCs

Here’s a detailed explanation of how different LLC types are taxed in Idaho.

1. Single-Member LLCs

A single member LLC

The IRS treats a single-member LLC as a disregarded company for tax purposes.

That implies that it is solely viewed as an extension of the owner and doesn't need a separate federal tax identification number; hence, the LLC does not have to submit its tax return or file the Idaho federal income tax return.

Instead, the individual owner must complete a Schedule C form as their personal tax return.

The form enables the Idaho LLC owners to state the business's profit or loss, which is subsequently applied to their individual income tax rates.

The Idaho state income tax for a default LLC is 1 to 6%.

2. Multi-Member LLCs

A multi-member LLC is treated like a partnership for taxation purposes. As such, the entity must obtain a separate tax identification number that acts as the security number of the entity. 

With a separate EIN, the multi-member LLC must complete Form 1065 to file its federal income taxes.

Additional schedules linked to this may be used to compute depreciation, earnings, and losses, among other things.

Additionally, a Schedule K-1 must be created and distributed to each member of the multi-member LLC so that they may each separately report their share of the LLC's earnings and losses on their tax returns.

3. LLCs Taxed as S-corp

Agreement about an LLC S-corop

By submitting Form 8832, Entity Classification Election, an LLC can be taxed as a corporation.

An Idaho LLC can then submit Form 2553, Election by a Small Business Corporation, to choose to have its LLC tax status treated as an S corporation.

Once the LLC becomes an S-Corp, the only earned income liable to the 15.3% Federal Insurance Contributions Act (FICA) tax for Social Security and Medicare is the wages given to its owner/employees.

Dividend income is defined as additional net earnings passed through to the owners who will file individual state income tax.

4. LLCs Taxed as C-corp

Your Idaho LLC can choose to be taxed as a C-corp. A C-corp offers greater eligibility for tax deductions than standard LLCs.

Idaho C-corps are required to file the IRS Form 1120 and pay both the 21% federal Idaho income tax and Idaho's 6% corporate income tax.

Federal Taxes for Idaho LLCs

Reading document on a folder

Here are the federal Idaho taxes that LLCs must pay annually.

1. Federal Self-Employment Tax

In Idaho, if you come under one of the following categories throughout the fiscal year, you must pay employer taxes, including the self-employment federal income tax:

  • You made $400 or more in net self-employment income.
  • If an organization you worked for during the time sent you a 1099 form, the IRS will see you as self-employed.
  • You earned at least $108.28 by working at the church.

The self-employment tax rate in Idaho is 15.3%, 12.4% Social Security tax, and a 2.9% Medicare tax.

2. Federal Unemployment Taxes (FUTA)

The employer's taxable earnings are multiplied by 6.0% to determine FUTA taxes. The taxable pay base is the first $7,000 in earnings paid to each employee throughout a calendar year.

Other Taxes

Other taxes that may apply to your Idaho business entity include the following:

1. Local Taxes

Writing signature on a document for local taxes

In Idaho, your limited liability company will pay different local taxes depending on the location and the sector of operation.

We recommend consulting your accountant or visiting the municipal authority offices to understand which local taxes apply to your entity.

If your small business transacts in cities like Idaho Falls and Chubbuck, you must pay a hotel tax, and the standard state sales tax rate is 6% for all other transactions.

Other cities like Ketchum have an additional 2% tax on all the goods and services you buy there and another 3% tax on vacation commercial houses and alcoholic beverages.

2. Workers' Compensation

Workers' compensation insurance covers employees who have work-related injuries for their medical costs and lost wages.

In Idaho, workers' compensation insurance is needed for any firm with at least one employee, and the rates are determined by the sort of work the company does and the number of covered employees.

However, as per Idaho law, there are certain workers' compensation exceptions [1].

These include the following:

  • Casual employment.
  • Household domestic service.
  • Employment of outworkers.
  • Employment of workers from the employer's family.
  • Employment as the manager of a sole proprietorship entity.

3. Idaho Sales Tax

Woman holding a document with sales tax data

If you sell a good or service in Idaho, you must pay sales tax of 6%. Additionally, each town in Idaho may levy local sales and use taxes.

As an LLC owner, you are responsible for collecting sales taxes and reporting them to the state every quarter.

Before you can start to collect sales tax, you must either register your business online with the Idaho Department of Labor or print off a copy of the Idaho Business Registration Form (Form IBR-1) and submit it to the address provided on the form.

Related Articles:

4. Unemployment Insurance Tax

For at least the first six calendar quarters, all new employers—aside from those that offer cost-reimbursement benefits—begin with the same basic unemployment insurance tax rate.

The standard rate is determined by law and is subject to change based on the state of the economy and the amount of the employment security fund.

Rates are assigned each calendar year with a Notice of Tax Rate sent in December, based on the finance year July 1 through June 30 [2].

"The employer's experience rating and how it compares to the experience ratings of all other Idaho employers will determine how the UI rate changes."
- Lane V. Erickson, Idaho Business Attorney

What Is Tax-Deductible for an LLC in Idaho?

Group of businessman checking tax deductible in Idaho LLC

The tax-deductible for an LLC in Idaho is either a standard deduction or itemized deductions, whichever is greater.

The standard federal deductions on taxable income are $12,950 for single filers and $25,900 for joint filers.

Other itemized deductions include:

  • $100,000 property tax exemption.
  • Grocery credit.
  • 60% deduction on property capital gains.
  • Credits for charitable gifts and contributions.
  • Credits for live organ donations.

FAQs

Do Foreign LLCs in Idaho Need To Pay Taxes?

Yes, foreign LLCs in Idaho need to pay taxes, provided they operate there. The foreign entity must report taxes on all revenue from the transactions conducted in Idaho.

What Income is Taxed in Idaho?

The income that is taxed in Idaho includes salaries, rental income, wages, interest income, self-employment income, and income from royalties.

What Is the Self-Employment Tax Rate in Idaho?

The self-employment tax rate in Idaho is 15.3%. The amount covers Social Security and Medicare tax.

About The Author

Venture Smarter | How to File LLC Taxes in Idaho? (Step by Step Guide)
Co-Founder & Chief Editor
Jon Morgan, MBA, LLM, has over ten years of experience growing startups and currently serves as CEO and Editor-in-Chief of Venture Smarter. Educated at UC Davis and Harvard, he offers deeply informed guidance. Beyond work, he enjoys spending time with family, his poodle Sophie, and learning Spanish.
Learn more about our editorial policy
Venture Smarter | How to File LLC Taxes in Idaho? (Step by Step Guide)
Growth & Transition Advisor
LJ Viveros has 40 years of experience in founding and scaling businesses, including a significant sale to Logitech. He has led Market Solutions LLC since 1999, focusing on strategic transitions for global brands. A graduate of Saint Mary’s College in Communications, LJ is also a distinguished Matsushita Executive alumnus.
Learn more about our editorial policy

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