Taxes & Finance
State Tax Filing: Requirements by Situation
A guide to understanding and filing state income tax returns, including residency rules, multi-state filing, and state-specific deductions and credits.
Source: IRS
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Determine Your State Filing Requirements
Identify your state of domicile and any states where you earned income
Your domicile is where you intend to permanently live. Some states like California use a 9-month residency test, while others like New York use a 183-day rule to determine tax residency.
Check if your state has an income tax (9 states do not)
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax. New Hampshire and Washington tax only certain investment income or capital gains.
Determine if you need to file as a resident, part-year resident, or nonresident
Part-year residents typically file two state returns for the year they moved. You report income earned while living in each state. Most states prorate the standard deduction based on months of residency.
Check your state's minimum income threshold for filing
Many states require filing even with low income. For example, California requires single filers to file if gross income exceeds $21,135. Some states have no minimum and require any resident with income to file.
Gather State-Specific Documents
Download your state's tax forms from the official revenue department website
Most states base their income tax on your federal AGI. Your completed federal Form 1040 is the starting point, so file federal first. Some states have their own adjustments on top of federal AGI.
Collect W-2 forms showing state wages and state tax withheld in boxes 15-17
If you worked in multiple states, you'll have separate state entries on your W-2. Box 15 shows the state, box 16 shows state wages, and box 17 shows state tax withheld for each state.
Gather records of any estimated state tax payments made during the year
State estimated payments are separate from federal. Most states follow the same quarterly schedule: April 15, June 15, September 15, and January 15. Keep all confirmation numbers or canceled checks.
Collect property tax statements if your state offers a property tax credit
About 20 states offer property tax credits or rebates for homeowners and sometimes renters. Michigan's homestead credit, for example, can be worth up to $1,600 for qualifying households.
Handle Multi-State Situations
File a nonresident return in each state where you earned income
If you worked remotely from a different state than your employer's location, check both states' rules. Some states like New York have a 'convenience of the employer' rule that taxes remote workers based on the employer's state.
Claim a credit for taxes paid to other states on your resident return
Nearly all states with income tax allow a credit for taxes paid to other states to prevent double taxation. File the nonresident state return first, then claim the credit on your home state return.
Check for reciprocal agreements between your states
About 16 states have reciprocal agreements. For example, if you live in New Jersey and work in Pennsylvania, you only pay tax to New Jersey. File Form REV-419 with your Pennsylvania employer to stop PA withholding.
Allocate income correctly between states using each state's allocation method
Most states use a days-worked-in-state divided by total-days-worked formula. Keep a detailed log of which days you worked in which state. A difference of even 5-10 days can shift hundreds of dollars in tax liability.
Review State Deductions and Credits
Check if your state conforms to federal standard deduction amounts
Not all states follow federal deduction amounts. New York's standard deduction for single filers is $8,000, far below the federal $15,000. California uses $5,540 for single filers. Check your state's specific amount.
Review state-specific credits for childcare, education, or energy improvements
Many states offer credits that mirror federal ones. For example, about 25 states offer their own earned income tax credit ranging from 3% to 85% of the federal EITC amount.
Check if contributions to your state's 529 plan are deductible
Over 30 states offer a deduction or credit for 529 plan contributions. Limits vary widely: Colorado allows up to the full contribution amount, while New York caps it at $5,000 ($10,000 for joint filers).
Review deductions for retirement income, military pay, or Social Security
About 37 states exempt Social Security from state tax. Many states offer partial or full exemptions for military retirement pay and public pension income. Check your state's specific exclusion amounts.
File and Pay
E-file your state return through your tax software or state's free filing portal
Most tax software files state and federal returns together. Many states also offer free direct e-filing through their revenue department website. E-filed state refunds typically arrive in 2-4 weeks.
Pay any state tax owed by the state's due date
Most states share the April 15 federal deadline, but not all. Virginia's deadline is May 1, and Iowa's is April 30. Late payment penalties typically run 0.5%-1% per month on the unpaid balance.
Track your state refund status through your state's revenue department website
Most states have a 'Where's My Refund' tool on their revenue department website. State refunds are generally faster than federal, averaging 2-3 weeks for e-filed returns with direct deposit.
If needed, file a state extension using your state's specific extension form
Some states automatically grant an extension if you file a federal extension (Form 4868). Others like New York require a separate state extension form. An extension to file is not an extension to pay — you still owe by the original deadline.
Keep copies of state returns and supporting documents for at least 3-4 years
State audit statutes of limitations vary: most states have 3-4 years, but California has 4 years and Montana has 5. Some states have no statute of limitations if you fail to file entirely.
Frequently Asked Questions
Which states have no income tax?
Nine states have no individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, New Hampshire and Washington tax certain investment and capital gains income respectively. Even in no-income-tax states, you may still need to file if you earned income in another state that does impose income tax.
Do I have to file taxes in two states if I moved during the year?
Yes, you will file part-year resident returns in both states. Each state taxes only the income you earned while living there. Some states also tax income sourced from within their borders regardless of residency. Watch for double-taxation — most states offer a credit for taxes paid to another state on the same income, but you typically must claim the credit on your resident state return.
Can my state tax deadline be different from the federal deadline?
Yes. While most states follow the April 15th federal deadline, exceptions exist. Virginia uses May 1st, Louisiana uses May 15th, and Iowa has moved to April 30th. Hawaii and Delaware also have extended deadlines in certain years. A federal extension does not automatically extend your state deadline in every state — about a dozen require a separate state extension form.
Do remote workers owe taxes in their employer's state?
It depends on the state. Some states apply a convenience of the employer rule, taxing you based on where your employer's office is located even if you work remotely from another state. New York is the most notable example of this rule. Other states only tax income physically performed within their borders. If you work remotely across state lines, you may owe in both states with a credit offsetting double taxation. Tax laws change frequently — verify current rules with the IRS or a tax professional.
How do state tax brackets compare to federal brackets?
State income tax rates range from 0% to 13.3% (California's top rate). Thirteen states use a flat rate — Pennsylvania (3.07%), Illinois (4.95%), and Colorado (4.4%) among them. Most other states use progressive brackets but with far fewer than the federal system's seven brackets. Ten states also impose local income taxes on top of state taxes, with New York City adding up to 3.876%.