Out-of-State Employers With Employees Living in Idaho

As Idaho’s rapid growth continues, we are seeing an influx of people moving to Idaho who are working remotely for their out-of-state employer, usually from home and often in an administrative capacity. When an employee lives and works in Idaho, their employer must establish a state income tax withholding account with the Idaho State Tax Commission and a state unemployment insurance tax account with the Idaho Department of Labor. Both accounts can be quickly established by completing form IBR-1. The employer also needs to carry workers compensation insurance issued by a provider authorized to do business in Idaho.

If the employee is actively engaged in soliciting business or selling a product, the business needs to register with the Idaho Secretary of State as a foreign entity in addition to opening withholding and unemployment accounts. A sales tax permit and/or other licenses may be needed as well.