Live in Idaho, Work Remotely for a South Dakota Employer: Who Taxes You?
Answer
Idaho taxes the income and South Dakota cannot. Residency, not the location of the job, drives this answer: Idaho reaches all of a resident's income, and South Dakota has no personal income tax to apply to the part earned inside its borders.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. South Dakota takes nothing, but Idaho still taxes residents on income earned anywhere, so the full amount lands on your Idaho return.
What you file
- 1Resident return · Idaho
File a Idaho resident return reporting all of your income.
The two states, side by side
| Idaho | South Dakota | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | None | None |
| Convenience rule | No | No |
| Nonresident return | Form 43 | Not applicable |
| Credit for other-state tax | Form 39NR | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | No | No |
| Revenue department | Idaho State Tax Commission | South Dakota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in South Dakota and working in Idaho gives:No state income tax on your wages.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Idaho → South DakotaHome state only
- 1099 contractor: Idaho → South DakotaHome state only — estimated payments
- Moved mid-year: Idaho → South DakotaOne part-year return — the state you left
Other Idaho pairs
Questions people actually ask
I live in Idaho and work remotely for a South Dakota employer. Which state do I pay?
Idaho taxes the income and South Dakota cannot. Residency, not the location of the job, drives this answer: Idaho reaches all of a resident's income, and South Dakota has no personal income tax to apply to the part earned inside its borders.
Which state should my employer be withholding for?
Idaho. Your employer should withhold Idaho tax rather than South Dakota tax on these wages. If a South Dakota line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Idaho and South Dakota rules on this page were last checked against Idaho State Tax Commission and South Dakota Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Idaho State Tax Commission — individual income taxaccessed 2026-08-07
- South Dakota Department of Revenue — individual income taxaccessed 2026-08-07