New Idaho law could delay tax refunds by weeks. Here’s what to know

A new state law could delay refunds for Idaho taxpayers by weeks.

Idaho Gov. Brad Little signed House Bill 559 into law on Wednesday to encourage the state to quickly adopt new federal tax cuts and credits.

As One, Big, Beautiful Bill provisions take effect, taxpayers can take advantage of a range of new deductions, the Internal Revenue Service said in a Jan. 8 news release.

These include permanently larger standard deductions, no federal tax on tips or overtime pay, no taxes on car loan interest, and higher credits and deductions for children, the IRS said.

HB 559 helps state taxes reflect federal tax codes, starting in 2026. It will also delay your tax refund from hitting your bank account.

When do I have to file my taxes in Idaho?

In Idaho, the deadline to file state and federal income tax returns for the 2025 tax year is April 15. Taxpayers who need more time can request a six-month filing extension – but any taxes owed must still be paid by the April deadline to avoid penalties and interest.

When can I expect my tax return?

“If you paid more through the year than you owe in tax, you may get money back,” the IRS said.

If you file your taxes electronically and choose direct deposit, you can usually expect your federal refund within about 21 days, according to the IRS.

The Idaho State Tax Commission said state returns and refunds normally take seven to eight weeks to process electronically.

Why could my tax return be delayed in 2026?

A number of factors could prevent Idaho taxpayers from getting their returns on time, according to Renee Eymann, senior public information officer for the tax commission.

One is House Bill 559, sponsored by state Rep. Jeff Elhers, R-Meridian.

When the Legislature’s Joint Finance-Appropriations Committee voted on the tax conformity bill, it was done with “hope” that the tax commission could operate through the 2026 tax season “with their existing resources,” Ehlers told the Idaho Statesman. However, Eymann said the new law requires the tax commission to meticulously update its entire system before processing your return.

“Now we need to update our tax forms and instructions and systems to incorporate the conformity changes,” Eymann said. “This will delay refunds beyond their normal time frames as we’re making these adjustments.”

Eymann told the Statesman that “it normally takes nine months for” updates like this to be made – although “it’s not going to take that long.”

“We’re really going to have to push it to get what needs to get done to help everybody,” she added.

That means if you already submitted your 2025 tax return, you may be asked to file an amended return as well, according to Eymann.

Budget cuts could slow tax return process

HB 559 hit Little’s desk amid state budget cuts that may affect the Idaho State Tax Commission.

The Joint Finance-Appropriations Committee was set to vote on maintenance budgets for all state agencies on Friday. Little’s budget director, Lori Wolff, sent a memo to the committee on Tuesday that warned these cuts may add delays to tax processing for next year.

“Additional cuts reduce the temporary tax season workforce, slowing processing by 12 to 24 weeks and delaying taxpayer refunds by up to six weeks,” Wolff said. “The delays will cost taxpayers up to $7 million in increased refund interest payments.”

How long do I have to wait for my refund?

As of Thursday, the tax commission could not provide a specific timeline for processing tax returns. However, the tax commission plans to update taxpayers as its system goes through the changes required by HB 559.

“We still have to come up with a plan, especially on how taxpayers can take the new deductions from the conformity bill,” Eymann said. “So once we know how long the refunds will be delayed, we will be letting taxpayers know.”