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 be required to file state taxes if you only lived in the state a short time or if your income is below a certain level. Each state has its own rules and tax rates, so it’s good to review the details for where you live and work. Some states have a progressive tax rate, while others have a flat tax rate. A few states don’t levy a state income tax at all.

Here we’ll provide an overview of tax situations that can help you determine if you are required 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.

Note: Taxpayers in all 50 states (and the District of Columbia) are required to 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?

As its name implies, state income tax is tax on income earned in a certain state. It’s similar to federal income tax, but generally funds state budgets rather than the federal government. But 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 of those common situations.

• Filing a federal return – Many states will require you to file state income taxes if you’re also required to file federal income taxes. Note that 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 have wage or other income from the state? Let’s go over a few scenarios when 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 that you file a state return, even if only for a few days. For example, 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’d be considered a part-year resident and you’d need to file a return.
• 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 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 of this could be rental income or investments such as a real estate investment trust or a partnership located in the state. Other types of income that may require filing a state return include lottery or gambling winnings or proceeds from the sale of property.

Note: These types of income are also taxed by your resident state regardless of where it’s earned. However, your resident state will generally allow a credit against state income tax for the income taxes paid to another state on the same income.

Which states don’t have 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.

• 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 does not have a state individual income tax. However, Washington does levy a 7% percent tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets. Individuals in Washington do not have to file a personal income tax return, but they are required to file a Capital Gains Tax Return as well as a copy of their federal return if they have capital gains for the applicable 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 on when you are required to file state taxes. The states with no income tax are listed above and are not included here.

Get help with your state tax return

Whether you make an appointment with one of our knowledgeable H&R Block tax professionals. or choose one of our online tax filing products, you can count on H&R Block to help you get back the most money possible.

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