Idaho Tax Commission Delays Refunds as State Updates Forms Under New Conformity Law

Taxpayers must wait for guidance on claiming new deductions as the state implements changes from the federal 'One Big Beautiful Bill Act'.

Published on Feb. 21, 2026

Got story updates? Submit your updates here. ›

The Idaho State Tax Commission is working to update its tax forms and systems after Governor Brad Little signed House Bill 559 into law, bringing Idaho into conformity with several federal tax provisions. As a result, refunds will be delayed beyond normal timeframes as the state develops a plan for taxpayers to claim the new conformity deductions.

Why it matters

The new conformity law includes larger standard deduction amounts, an enhanced senior deduction, and deductions for qualified tips from wages, car loan interest, and overtime compensation. However, the Tax Commission must first update forms, instructions, and internal systems before it can process returns under the new law, causing delays for the over 158,000 taxpayers who have already filed their 2025 Idaho income tax returns.

The details

To implement the changes, the Tax Commission must update forms, instructions, and internal systems before it can process returns under the new law. Tax software companies will also need to update their systems, and those updates must be tested and verified by the state. As a result, refunds will be delayed beyond normal timeframes.

  • Governor Brad Little signed House Bill 559 into law.
  • The deadline to file 2025 Idaho income taxes is Wednesday, April 15.

The players

Idaho State Tax Commission

The state agency responsible for administering and collecting taxes in Idaho.

Governor Brad Little

The current Governor of Idaho who signed House Bill 559 into law.

Jeff McCray

The Chairman of the Idaho State Tax Commission.

Got photos? Submit your photos here. ›

What they’re saying

“The changes to forms and systems normally take nine months for the Tax Commission to complete. However, it's a priority for us to make the updates and provide a plan for taxpayers to follow as soon as possible.”

— Jeff McCray, Chairman, Idaho State Tax Commission (dailyfly.com)

What’s next

The Tax Commission is expected to provide additional guidance to taxpayers in the coming weeks on how to claim the new conformity deductions.

The takeaway

The delay in tax refunds highlights the challenges state tax agencies face in quickly implementing changes to federal tax laws, even when those changes are meant to benefit taxpayers. Taxpayers will need to be patient as the state works to update its systems and provide clear instructions on how to claim the new deductions.