Do I have to file state taxes?

Whether you have to file state taxes depends on whether your state requires you to pay income tax and how much you make. Most people have to file federal taxes according to IRS guidelines. But what about state taxes? This can be tricky because each state has its own rules.

So, do you have to file state taxes? It depends on where you live and how much money you make. If you live in a state that has income taxes, you probably need to file. But some states don’t have income tax at all. Also, how much money you make matters. Each state has its own rules about this.

Tax time comes every year, and the best way to prepare for tax season is to get ready early. Keep reading to understand if you need to file state taxes.

• State income tax filing requirements
• Understanding state vs. federal tax filing
• Do you need to file state taxes if you don’t live there?
• Which states don’t have income tax?
• When do I have to file state taxes?
• Filing Requirements for Every State
• The bottom line

State income tax filing requirements

Every state has its own rules about taxes. But there are some common reasons why you might need to file state taxes. Let’s look at these reasons:

• Having income over a certain minimum amount: Some states have a minimum amount of income that taxpayers have to meet to file state taxes. For example, if you’re single, filing individually, live in Illinois, and made at least $2,775, you must file a state income tax return. Another example: If you live in Missouri and earned at least $1,200 as an individual, you have to file a state income tax return. Keep in mind that social security benefits may be taxable at the state level, depending on where you live.
• Filing a federal income tax return: Many states make taxpayers file a state tax return if they filed a federal tax return.
• Claiming credits: You can claim some refundable credits from your state. You must file a state tax return to claim these credits.
• Getting a tax refund: If you had more state income tax money taken from your paychecks than you actually owe, you may be able to get a tax refund. To get the refund, you must file a state tax return.

If any of these situations apply to you, it means you need to file a state income tax return. This is important because:

• It’s the law: If you meet these rules, you have to file. Not filing when you should can get you in trouble.
• You might owe money: If you made enough money, you may need to pay taxes to your state.
• You could miss out on money: Do you get state taxes back? You could! But, if you don’t file, you might not get the credits or refunds you deserve.
• It keeps your records straight: Filing helps make sure your state knows about your income and taxes.

Understanding state vs. federal tax filing

When tax season rolls around, you might hear about two kinds of taxes: state and federal taxes. It’s important to understand how they’re different.

Federal taxes are the same for everyone in the United States. You send these taxes to the Internal Revenue Service (IRS). The money from federal taxes is used for activities that help the whole country, such as the military and national parks.

State taxes are different. Each state has its own rules for taxes. You send state taxes to your state’s tax office. This money stays in your state to pay for schools, roads, and other services. There are a few ways that state taxes are unique, such as:

• Not all states have income tax: Some states, like Texas and Florida, don’t make you pay state income tax.
• Different forms: Each state has its own tax forms. They might look different from federal forms.
• Different due dates: While federal taxes are usually due on April 15, some states have different due dates.
• Special deductions: States might let you subtract certain things from your taxes that the federal government doesn’t. For instance, while the federal government offers the Child and Dependent Care tax credit, your state might have extra deductions for school supplies you bought for your kids or money you’ve saved for college.
• Local taxes: Some cities or counties might have their own taxes on top of state taxes.
• Tax rates: States can choose how much tax to charge. Some charge more than others.

Remember, you might need to file both federal and state taxes. It’s important to know the rules for both to make sure you’re doing everything right at tax time.

Do you need to file state taxes if you don’t live there?

In some cases, yes. Most of these involve activity between different states. For example, if you live in one state and work in another or if you moved during the tax year.

Moved from one state to another

If you moved out of one state and into another during the tax year, you may owe state income taxes in both states. This means you have to file a state tax return for both states. Every state has different rules, however. Check with your state’s tax office to see if you need to file state taxes if you moved during the tax year.

Worked in one state while living in another

If you lived in one state but worked in a different state during the tax year, you may need to file two separate state tax returns. But this doesn’t mean that you’re taxed twice. Some states offer what is called state income tax reciprocity. This allows you not to file state income taxes for the state where you work. If you pay income taxes to the state where you work, you may get a credit for those taxes when you file your tax return.

Had state-based income sources

If you earn income in a state–even if you don’t live or work there – you may have to file a state tax return for that state. Examples of this category include rental income or real estate investments located in a different state. State lottery and gambling winnings also fall into this bucket, as does the money you earn from selling property in another state.

Simply put, income taxes are taxed by your resident state — where you live. It doesn’t matter if you work remotely for a company based in another state or moved during the year. And yes, it’s achievable to be taxed by two states. Here’s how filing income taxes usually works:

1. You file a tax return in the state where you earned the money
2. You also file a tax return in your home state, reporting all your income
3. Your home state will usually give you a credit for taxes you paid to other states to make sure you’re not paying full taxes twice on the same amount of money earned.

Tax rules can be tricky when dealing with more than one state. Working with a tax advisor or accountant is always a good idea if you’re unsure what to do.

Which states don’t have income tax?

If you wonder, “Do you have to file state taxes?” you might be surprised to learn that in some places, you don’t. Only nine of the 50 United States don’t have income tax. If you’re lucky enough to live in one of these states, you don’t have to file a state tax return for that state. These states are:

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

Living in one of these states means you don’t have to fill out a state income tax form. Additionally, you’ll typically keep more of your paycheck since the state isn’t charging you income tax. However, you’ll still have to pay federal income taxes.

Keep in mind that these states may charge higher sales or property tax to make up for not having income tax, so don’t think you’re completely off the hook if you live here. That said, because you’re not paying state income tax, you might be able to save more money or spend it on the things you need.

Remember, we’re talking about personal income taxes. So, if you own a business, the rules might be different. Many of these states still tax business income.

When do I have to file state taxes?

So, if you’ve determined you have to file taxes, you might wonder, “When do you have to file state taxes?” Knowing when to file taxes can help you avoid fines for filing late. Many state tax deadlines are similar to those for filing federal taxes for simplicity. Many states have the same tax filing deadline as the federal government (April 15). However, every state has its own rules and deadlines, so always check your specific state’s rules.

If you need more time, you can ask for an extension, which gives you extra time to file your taxes. However, you’ll still need to pay what you owe by the regular due date.

Additionally, if you’re self-employed or own a business, you might need to pay estimated taxes four times a year instead of just once.

Filing Requirements for Every State

Every state in the United States has its own rules about taxes. State tax filing requirements can differ from one state to the next, so it’s important to know the exact rules for your state.

Here’s a quick look at what each state asks for when it comes to filing taxes. Remember, state tax filing requirements can change, so it’s always a good idea to double-check with your state’s tax office or a professional tax preparer if you have any questions.

Special consideration: While Washington, DC, technically isn’t a state, residents have their own tax requirements.

The bottom line

Whether you need to file state income taxes depends mostly on where you live. If you live in a state that doesn’t have income tax, you get a bit of a break during tax season. Why? Because you’ll most likely only need to worry about filing your federal income taxes. If you don’t live in one of those states, you’ll probably have to file a state tax return and your federal taxes.

It’s important to remember that all states have different laws, regulations, and guidelines when it comes to taxpayers filing their state income taxes. Be sure to check with your state so you know you’re following the tax laws.

Sun Loan is always here for your tax needs. With more than 20 years of tax experience, the tax preparation experts at your local Sun Loan branch will make sure your taxes are filed correctly. They’ll also look to get you the biggest refund possible. Trust Sun Loan to file your taxes securely, accurately, and on time. For more information, call (800) SUN-LOAN today or visit us online.