State income tax: Do I have to file state taxes?

In addition to federal income taxes, many states require state income tax. Whether you have to file state taxes this tax year depends on a few factors. In some cases, you may not need to file state taxes if you only lived in the state for a short time or if your income falls below a certain level.

Some states follow a progressive tax rate, which means the rate increases with income, while others stick to a flat tax rate. Taking time to understand how you’re taxed can really help you make sense of your taxes.

A few states don’t levy a state income tax at all.

Here we’ll answer:

• What is state tax?
• Do I need to file state taxes?
• What is filing a state tax return?
• Which states don’t have income tax?
• How to file state taxes

We’ll also provide an overview of tax situations to help you determine if you need to file state taxes. If you want to skip ahead to the rules for your state, you can find that list at the bottom of this page.

What is state income tax?

As its name implies, state income tax is a tax on income earned in a certain state. State taxes fund state budgets rather than the federal government.

The funds collected from state income taxes support state programs and services like education, transportation, public safety and works, corrections, low-income assistance, and subsidized healthcare programs.

Note: Taxpayers in all 50 states (and the District of Columbia) pay property tax, but these are typically levied and collected by local governments, not the state. You will not pay property tax with your state income tax return.

Do I have to file a state tax return?

Not everyone in the United States has to file state taxes. Typically, the need to file is triggered if you live or earn income in a state that has income tax (see below) and you meet certain criteria. Let’s review a few common situations where state tax filing is required:

• Filing a federal return: Many states require you to file state income taxes if you’re also required to file federal income taxes. (Note: the Internal Revenue Service (IRS) allows you to claim a deduction up to $10,000 for state income tax on your federal tax return (Tax Form 1040) if you itemize deductions on your federal return.)
• Having income over a threshold: In some states, you’ll only need to file if your income is above a certain threshold. This amount will vary state-by-state and can also vary by your filing status.
• Getting a refund: If you’ve had more state income taxes withheld from your paycheck than you owe, you could have a refund coming. However, you won’t be sent your state refund automatically. You’ll need to file a return to receive it. In this situation, it may be worth it to file your state return even though it may not be a requirement.
• Claiming certain credits: If you’re eligible to claim certain refundable credits on your state tax return, you could get money back from the state. Similar to receiving a refund, you’ll first have to file your state taxes to claim the tax credit.

Are you required to file state taxes if you don’t live there?

If you lived in a state for an entire year, there’s no question about your residency status. But what if you moved during the year? Or, what if you were not a resident at all and you just earned a wage or other taxable income from the state? Let’s go over a few scenarios where you have to file state taxes, possibly in more than one state:

• Moving from state to state: If you moved from one state to another during a tax year, you may have to file state taxes in both states. Some states base the filing requirement on a minimum number of days or months you spend in the state. In other states, moving there with the intent to stay permanently is enough to require filing a state return. Say you moved to California recently. You might wonder if you have to file state taxes in California if you only moved there permanently in late December. In this case, you’re considered a part-year resident and you DO need to file a return in California and possibly the state you moved from.
• Work in one state and live in another: Working across state lines can mean that you need to file two state returns, but it doesn’t necessarily mean that you are taxed twice. In some cases, you might be able to take advantage of state income tax reciprocity, which can exempt income earned by nonresidents of neighboring states. In other cases, you might be able to receive a credit for taxes paid to the other state.
• State-based income sources: Earning income in a state can mean you have a filing requirement, even if you don’t live or work there. Examples are rental income or investments like a real estate investment trust or a partnership located in the state. Other types of income requiring filing a state return might include lottery or gambling winnings or proceeds from the sale of property from your non-resident state.

Note: These types of income are also taxed by your resident state no matter where it’s earned. However, your resident state may allow a credit against state income tax for the income taxes paid to another state on the same income.

States without income tax

If you live or work in one of the states below that don’t have individual income tax (also sometimes called personal income tax), you won’t need to worry about filing a state tax return for that state. Multiple states have no state taxes. They include:

• Alaska
• Florida
• Nevada
• New Hampshire*
• South Dakota
• Tennessee*
• Texas
• Washington**
• Wyoming

*Note: New Hampshire and Tennessee are two states with the lowest taxes—at 0% for income taxes on earned income—but they do tax dividend and interest income. That said, you may still need to file a state return for those two states.

**Washington doesn’t have a state individual income tax, but levies a 7% percent tax on the sale or exchange of long-term capital assets like stocks, bonds, business interests, or other investments and tangible assets. Washington residents don’t have to file a personal income tax return, but they are required to file a capital gains tax return and a copy of their federal return if they have capital gains for the tax year.

State income tax details and when you have to file

Visit the revenue department websites for the state(s) where you live and work to find current details about when you’re required to file state taxes, current state tax rates, and how to file state taxes. The states without income tax are listed above and are not included here.

Get help filing your state income tax return

Taxes can get tricky, especially when you’re factoring in taxes from multiple states or other more complex situations. Whether you choose to file with a tax pro, file with H&R Block Online, you can rest assured that we’ll get you the biggest refund possible.