Airbnb Host Taxes in Idaho - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Idaho

Idaho’s stunning landscapes and outdoor recreation draw visitors year-round, making short-term rentals a popular option for property owners. However, income earned through platforms like Airbnb is subject to both federal and Idaho state taxes, requiring careful record-keeping and understanding of applicable regulations. This guide provides an overview of the tax implications for Airbnb hosts in Idaho for the 2025 tax year.

Idaho State Tax Rules for Rental Income

As a resident of Idaho, a state income tax return is required regardless of the amount of Airbnb income earned. Idaho operates under a flat income tax rate, currently at 5.8% for the 2025 tax year (subject to change by the Idaho Legislature). This means all taxable income is taxed at the same rate. Airbnb income is considered taxable income and must be reported on your Idaho income tax return. The primary form used for reporting self-employment or business income, including Airbnb income reported on Schedule C, is Form 40, Idaho Individual Income Tax Return, along with Schedule 1, Additional Income and Adjustments. If reporting rental income as a passive activity on Schedule E, the information will flow to Form 40. Idaho also requires taxpayers to pay estimated taxes quarterly if they expect to owe $1,000 or more in taxes for the year. Failure to do so may result in penalties. Idaho does not have a separate tax specifically for short-term rentals, but all income is subject to the state’s individual income tax. It’s crucial to maintain accurate records of all income and expenses related to your Airbnb activity to ensure accurate tax reporting. Idaho also allows for certain business expense deductions, mirroring many of the federal deductions, which can help reduce your overall tax liability. Consulting with a qualified tax professional familiar with Idaho tax law is highly recommended, especially if your Airbnb operation is substantial or complex.

For more information on Idaho state taxes, please visit the Idaho State Tax Commission website: https://tax.idaho.gov/

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for an Airbnb host, as it determines whether you owe self-employment tax. The IRS classifies rental activities differently, impacting your tax obligations.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Supplemental Income and Loss). This applies if you only provide basic lodging and cleaning between guests. If you are considered a passive investor, you are generally exempt from the 15.3% self-employment tax.
• Schedule C (Active Business Income): However, if you provide "substantial services" – think daily cleaning, providing meals, concierge services, or similar hotel-like amenities – you report on Schedule C (Profit or Loss from Business) and must pay the 15.3% self-employment tax (Social Security and Medicare). The IRS looks at the degree of services provided.

Top Tax Write-offs for Idaho Hosts

• Platform Fees: Fees charged by Airbnb, VRBO, and other platforms are fully deductible as business expenses.
• Mortgage Interest & Property Taxes: Deduct the portion of your mortgage interest and property taxes that corresponds to the rental space and the period it was rented. If the property is both a personal residence and a rental, allocation is required.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items (repairs), professional cleaning services, and cleaning supplies. Improvements, which add value or extend the life of the property, are generally depreciated, not deducted immediately.
• Depreciation: A powerful but complex deduction that allows you to deduct a portion of the cost of your rental property over its useful life. This accounts for wear and tear. Often requires a tax professional to calculate correctly.