Idaho Tax Strategy: Gem State Tax Freedom
Idaho recently moved to a 5.8% flat tax—one of the lowest in the region. But federal taxes still claim up to 37%. Section 7702 completes your tax strategy.
The Idaho Tax Picture
Idaho is attractive for tax refugees from California and Washington, but federal taxes remain unchanged at up to 37%.
✅ The Good News
- 5.8% flat tax (recently reduced)
- Social Security fully exempt
- Lower cost of living than neighbors
- Strong job growth in Boise
⚠️ The Challenge
- Federal taxes still apply (up to 37%)
- 401(k) distributions federally taxed
- Combined rate can exceed 42%
- Growing population straining services
Idaho Tax By The Numbers
Section 7702: Your Tax Freedom Solution
Section 7702 of the IRS tax code creates a powerful opportunity: access your retirement funds through policy loans that are completely tax-free—at both federal and state levels. For Idaho residents, this means escaping both the state tax burden and federal taxation entirely.
Federal Tax-Free
Policy loans bypass federal income tax entirely. No 22-37% federal tax on your retirement income.
State Tax-Free
No Idaho state income tax on policy loans. Your retirement income stays tax-free at the state level.
Idaho Professionals We Typically Serve
Tech Transplants
California and Seattle tech workers relocating to Boise
Healthcare Professionals
Physicians at St. Luke and other Idaho health systems
Micron Professionals
Engineers and executives at Micron Technology
Outdoor Industry
Recreation and outdoor equipment company leaders
Agricultural Leaders
Large-scale farmers and agribusiness executives
Remote Workers
High earners working remotely from Idaho
Idaho Areas We Serve
Matt Nye's Recommendation
"Idaho is booming—the Boise area is attracting tech workers, retirees, and anyone fleeing high-tax states. The 5.8% flat tax is competitive, and the lifestyle is excellent."
"But I see a lot of California and Seattle transplants who think they have solved their tax problem by moving. They have reduced state taxes, yes—but federal taxes are the same whether you are in Boise or Berkeley."
"Section 7702 completes the move. You have already saved on state taxes. Now eliminate federal taxes on retirement income. That is how you maximize the Idaho advantage."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
I moved from California to Idaho. Have I not already saved on taxes?
Moving from California 13.3% to Idaho 5.8% saves you about 7.5% in state taxes—significant. But your 401(k) is still federally taxed at 22-37%. Section 7702 eliminates that federal burden.
Idaho is growing fast. Will taxes go up?
Idaho has been reducing taxes recently, but future policy is uncertain. Section 7702 policy loans are tax-free regardless of what Idaho does. That certainty is valuable.
I work at Micron. How does Section 7702 help tech workers?
Tech salaries are high, meaning high federal tax brackets now and in retirement. Section 7702 converts that taxable income into tax-free retirement income. Perfect for Micron professionals.
Social Security is not taxed in Idaho. Is that enough?
Social Security exemption is great, but for high earners, 401(k) distributions often far exceed Social Security. Those distributions are fully taxed. Section 7702 provides additional tax-free income.
I split time between Idaho and another state. How does that work?
Residency rules can be complex for snowbirds and remote workers. Section 7702 policy loans are tax-free regardless of where you claim residency. No state questions, no federal tax.
Ready for Idaho Tax Freedom?
Discover how Section 7702 can eliminate both state and federal taxes on your retirement income. Schedule your free analysis today.
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