Helping Idaho Public Employees Build A Secure Retirement

Taxability of Base Plan Benefits

Federal Income Tax

PERSI can provide only general, basic guidance about taxability of benefits. We cannot act as tax advisors for members or make any determination of specific taxability. Members must consider all sources of income and any other pertinent tax considerations when deciding how much tax should be withheld from their benefit. Those who have questions should consult a tax professional for answers and guidance.

PERSI Base Plan benefits are subject to federal income tax withholding; however, members can choose to not have tax withheld. If a member chooses to not have tax withheld or does not have enough tax withheld, the member may have to make estimated tax payments. Members' whose withholding and estimated tax payments are not enough to cover their tax liability may be subject to interest charges and/or IRS penalties.

A member can choose to have federal tax withheld as follows:

  • a specified fixed amount, or
  • a calculated amount based on marital status and exemptions or
  • a calculated amount plus an additional fixed amount

If a retired member does not provide withholding instructions (Form RS322), PERSI must withhold federal tax at the rate for a married individual claiming 3 exemptions. To choose a different rate or amount, or to have no federal tax withheld, the member may complete and submit PERSI form RS322, Federal and Idaho Tax Withholding.

Idaho Income Tax

PERSI can provide only general, basic guidance about taxability of benefits. We cannot act as tax advisors for members or make any determination of specific taxability. Members must consider all sources of income and any other pertinent tax considerations when deciding how much tax should be withheld from their benefit. Those who have questions should consult a tax professional for answers and guidance.

PERSI Base Plan benefits are generally subject to Idaho income tax for Idaho residents, but PERSI is not required to withhold Idaho income tax. Unless instructed otherwise by the member, PERSI does not withhold Idaho tax. Members can choose to have Idaho tax withheld by indicating their withholding instructions on PERSI form RS322, Federal and Idaho Tax Withholding. They can choose a fixed amount, calculated amount, or calculated amount plus a fixed amount.

Retired members who are part-year residents of the state of Idaho generally must pay Idaho income tax on their PERSI benefits, even for the months they live outside the state. They may also be required to pay income taxes to the other state on some or all of their benefits.

Other State Income Tax

PERSI can provide only general, basic guidance about taxability of benefits. We cannot act as tax advisors for members or make any determination of specific taxability. Members must consider all sources of income and any other pertinent tax considerations when deciding how much tax should be withheld from their benefit. Those who have questions should consult a tax professional for answers and guidance.

Members who reside in other states, either permanently or part-year, may or may not be required to pay income taxes to the other state on their PERSI benefits. Each state has different tax laws and members who reside in other states should consult a tax professional with specific knowledge about the tax laws for their particular state. PERSI will not withhold taxes for any state other than the state of Idaho.