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Budget office warns Idahoans may face bigger tax bills

Gov. Otter signed a bill into law earlier this year that reduced individual state income tax rates.
Credit: LIgorko / Thinkstock

BOISE — Gov. Butch Otter's budget office says Idahoans may have to come up with more money to pay their 2018 taxes next year due to major changes tied to the new tax law.

According to the Division of Financial Management on Monday, the state's tax revenue has faced a shortfall for the past two months due to individual income tax revenue failing to meet estimated forecasts.

The division says the shortfall could be attributed to an Idaho tax change Otter signed into law earlier this year that reduced individual state income tax rates.

However, the divisions says another possibility could be Idahoans receiving pay that is "under-withheld" -meaning their paychecks are bigger this year but resulting in a larger tax bill next spring - as allowed under the new federal tax law.

Millions of American workers started getting fatter paychecks early this year, as employers withheld less money in anticipation of lower income taxes under the law.

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