The first few months of each year are considered “tax season” as most Americans are preparing to file their federal income tax returns before the April 15 deadline. Many Americans are also preparing their state income tax returns during this time. Do you have to file a state income tax return? It depends on where you lived and where you earned income during last year. Seven states do not impose a personal state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. If you were a resident of one of those states and all of your income was earned in one of those states, you probably do not have to file a state income tax return. Two states do not tax employment income but limit their state income tax to interest and dividend income only: New Hampshire and Tennessee. If you were a resident of one of those states or owned investments in one of those states, you may have to file a state income tax return. The remaining forty-one states tax both earned income and investment income. If you were a resident of one of those states or earned income in one of those states, you will probably have to file a state income tax return. Most of the states that do not impose a state income tax compensate by imposing other taxes, such as state sales taxes. Alaska is the only state to avoid both state income taxes and state sales taxes.
Sources: Tax Foundation, Federation of Tax Administrators
