Most taxpayers have to file a federal and a state tax return during tax season. However, not all states levy income tax. Nine US states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — do not have income tax.
If you live in one of these states, that means you do not have to file a state tax return. Instead, you’ll simply file a federal tax return.
There are a few exceptions, though. First, if you live in New Hampshire, you are not taxed on income, but interests and dividends are taxed. If you earn more than $2,400 in interest or dividends ($4,800 for joint filers), you must file a state tax return. And, if you moved to New Hampshire during the year and are considered a part-year resident, you must file a return if you earned more than $2,400 ($4,800 for joint filers) during the year.
But what if you live in a state with no income tax, like Washington, but work in a tax with income tax like Oregon? In some cases, you may need to file a tax return in the state that levies income tax, even if your home state has no income tax requirement. But these laws vary from state to state. It’s important to find out if your state has a reciprocal agreement that allows you to work in a neighboring state without paying income tax there.
Residents of all other states must file a tax return with their respective state revenue departments.