Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don't have income tax. If you're a resident of one of these states, you don't need to file a return in that state.
In addition, New Hampshire and Tennessee only tax interest and dividend income, not wages, earnings, or other income:
- New Hampshire residents only file a tax return if their interest and dividend income exceeded $2,400 ($4,800 for joint filers) plus additional exemptions for age, blindness, and disability.
- Tennessee residents only file a tax return if their interest and dividend income exceeded $1,250 ($2,500 for joint filers). This is the Hall income tax.
If you're a resident in one of the remaining "taxable" states and you earned money working in one of these "tax-free" states, that income needs to be reported on your resident state return.
For example, if you're a California resident and worked in tax-free Texas, you'd still have to report your Texas earnings on your California return as well as your federal return.
Similarly, if you're a resident of tax-free Texas and earned money in California, you'd still have to file a nonresident California return to report your earnings, and you'd report those on your federal return as well.
- How do I file if I moved to a different state last year?
- How do I file a part-year state return?
- Why does tax-free income from Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming get taxed on my resident state return?
- When would I have to file returns in more than one state?
- What is a state reciprocal agreement?