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Read. Follow. Verify.Idaho House Bill 605 provides income tax deductions for tips and overtime, increases senior food tax credits, and applies changes retroactively to January 1, 2026
Last action · February 9, 2026: Reported Printed; Filed in the Office of the Chief ClerkSponsor: John Gannon
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What This Bill Proposed
TAXATION – Amends and adds to existing law to provide certain deductions to income taxes and to provide for an increased food tax credit for seniors.
The measure alters state tax liabilities for wage earners receiving tips or overtime pay and adjusts payout tiers for residents claiming the Idaho food tax credit, while setting strict eligibility formulas tied to incarceration status, public assistance, and residency.
Who It Would Have Affected
Groups the bill's text would have affected, as described in the record. Being affected is not a position for or against it.
Idaho resident individuals
Resident individuals are directly affected through revised food tax credit payout amounts, alternative actual sales tax deductions, and new eligibility criteria.
Wage earners receiving tips and overtime
Taxpayers earning qualified tips and overtime compensation are permitted to subtract those earnings from federal adjusted gross income between 2026 and 2029.
State Tax Commission
The agency is tasked with prescribing implementing rules, administering alternative receipt claims, recovering improperly claimed amounts, and executing information-sharing agreements.
Idaho Department of Correction
The department must enter into an information-sharing agreement with the tax commission regarding the incarceration status of tax credit claimants.
Key Facts
- For taxable years from January 1, 2026, through December 31, 2028, taxpayers may subtract qualified tips and the premium portion of qualified overtime compensation from federal adjusted gross income.
- The resident food tax credit is set at $155 for tax year 2025 and each year thereafter.
- Residents who reach 65 years of age before the end of the taxable year are entitled to an additional $50 credit or refund.
- Taxpayers may elect to claim the actual amount of sales tax paid on qualifying food purchases up to a maximum of $250 per person in lieu of flat tax credit amounts.
Show all 9 facts
- Food purchases eligible for the sales tax credit follow the definition under 7 U.S.C. 2012 as of January 1, 2025, excluding candy, soda, restaurant sales, and heated or combined foods.
- Credits or refunds are reduced proportionally for individuals who received federal food stamp assistance or were incarcerated during any part of the taxable year.
- No food tax credit or refund is paid for individuals residing illegally in the United States.
- Taxpayers have an irrevocable option to donate credited food tax funds to the cooperative welfare fund to assist low-income Idahoans with home energy costs.
- The act declares an emergency, taking effect upon passage and approval and retroactively to January 1, 2026.
Frequently Asked Questions
Who qualifies for the new income tax subtractions for tips and overtime?
How much is the food tax credit for tax year 2025 and later?
Can taxpayers claim actual sales tax paid on food instead of the flat credit?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
This bill did not become law - Died at adjournment · in House committee.
Procedural history
2 actions- Feb 9, 2026Reported Printed; Filed in the Office of the Chief Clerk
- Feb 6, 2026IntroducedIntroduced, read first time, referred to JRA for Printing
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Temporary Tip and Overtime Deductions
The bill introduces a multi-year window (2026-2028) aligning state tax subtractions with specific federal Internal Revenue Code provisions for tips and overtime.
Connected Entities
Sources
legislature.idaho.gov
Analysis Score
0–100- Significance20Lowered because this bill did not pass (its text scored 80)
- Controversy35Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz50Current news / social attention level
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