The U.S. Expat’s Guide to State Taxes while Living Abroad
Did you know you may still have to pay U.S. state taxes even if you live abroad? Unlike almost everywhere else in the world, qualifying American expats still have a U.S. tax obligation while living overseas — and, depending on your home state before moving abroad, that also may include state taxes.
U.S. state taxation for expats can be confusing for even the most seasoned expats, and the penalties for non-compliance are steep. Below, we’ll walk you through the basics of U.S. taxes and state residency for expats below and help you get started on your own state tax return.
Ready to file? You’ve got two options: Jump in the driver’s seat with our DIY online expat tax service designed specifically for U.S. citizens living abroad or let one of our experienced tax advisors take the wheel.
Yes, U.S. citizens may still have to pay federal AND state taxes even if they live abroad.
The fact is, if you are a U.S. citizen or Green Card holder who makes above the general U.S. filing threshold you are still required to file federal U.S. taxes and report your worldwide income every year regardless where in the world you live. It’s much the same for state taxes, depending on the state.
Expat tax rules say taxable foreign income for U.S. citizens living abroad includes:
- Rental Income
Before you stress about paying taxes twice on the same income (once to the U.S. and once to your new country) you should know there are tools and benefits are available to expats. These tax benefits, such as the Foreign Earned Income Exclusion and Foreign Tax Credit, can help you avoid double taxation.
Want a quick summary of taxes for expats? We distilled what you should know into 20 things you should know about taxes for expats.
Who must pay state taxes as an expat?
“Do I have to pay state taxes while living abroad?”
Whether or not you need to file state taxes while living abroad depends on the state you last lived (or were considered a resident of), if you're still considered a resident of that state, and if you make income in that state.
State residency while living abroad
State residency while living abroad is a tricky topic. Each state has different definitions of who qualifies as a resident and some states (like Florida) don't even have income tax requirements. On the other end of the spectrum are states (like New York and California) that require you pay expat state taxes on income earned worldwide.
Some factors that can affect whether you're considered a state resident include:
- Where your car is registered
- If you have a driver's license or state ID
- Where you are registered to vote
- If you own any property or have mortgage/lease payments on any property in the state
- If you pay any utility bills in the state
- Where your family lives
- The permanence of your overseas assignment
- Your financial assets and accounts within the state
Even if you don't qualify as a resident, some states require expats pay taxes if they have any income from that state. Not sure what applies in your situation? Instead of diving into each state’s specifics here, below you’ll find links to each state’s revenue department (and state residency qualifications), so you can jump right to your state in question.
If you're still unsure about your residency or your state's qualifications, it's best to leave your tax filings to an expert.
|State||Department Name||Resource Link (Click to open in new tab/window)|
|Alaska||Department of Revenue||Tax Division Website|
|Alabama||Department of Revenue||Department of Revenue|
|Arkansas||Department of Finance and Administration||Department of Revenue Website|
|Arizona||Department of Revenue||Department of Revenue Website|
|California||Department of Tax & Fee Administration||Department of Tax & Fee Website|
|California||Employment Development Department||Employment Development Department Website [Withholding Taxes]|
|California||Franchise Tax Board||Franchise Tax Board Website [Income Taxes]|
|Colorado||Department of Revenue||Department of Revenue|
|Connecticut||Department of Revenue Services||Department of Revenue Services|
|District of Columbia||Office of Tax and Revenue||Office of the Chief Financial Officer|
|Delaware||Division of Revenue||Division of Revenue|
|Florida||Department of Revenue||Department of Revenue|
|Georgia||Department of Revenue||Department of Revenue|
|Hawaii||Department of Taxation||Department of Taxation|
|Iowa||Department of Revenue||Department of Revenue|
|Idaho||State Tax Commission||State Tax Commission|
|Illinois||Department of Revenue||Department of Revenue|
|Indiana||Department of Revenue||Department of Revenue|
|Kansas||Department of Revenue||Department of Revenue|
|Kentucky||Department of Revenue||Department of Revenue|
|Louisiana||Department of Revenue||Department of Revenue|
|Massachusetts||Department of Revenue||Department of Revenue|
|Maryland||Comptroller of Maryland||Comptroller of Maryland|
|Maine||Revenue Services||Revenue Services|
|Michigan||Department of Treasury||Department of Treasury|
|Minnesota||Department of Revenue||Department of Revenue|
|Missouri||Department of Revenue||Department of Revenue|
|Mississippi||Department of Revenue||Department of Revenue|
|Montana||Department of Revenue||Department of Revenue|
|North Carolina||Department of Revenue||Department of Revenue|
|North Dakota||Department of Revenue||Office of State Tax Commissioner|
|Nebraska||Department of Revenue||Department of Revenue|
|New Hampshire||Department of Revenue||Department of Revenue Administration|
|New Jersey||Department of Revenue||Division of Taxation|
|New Mexico||Department of Revenue||Taxation and Revenue Department|
|Nevada||Department of Taxation||Department of Taxation|
|New York City||Taxation and Revenue Department||Department of Finance|
|New York||State Department of Taxation||State Department of Taxation and Finance|
|Ohio||Office of State Tax Commissioner||Department of Taxation|
|Oklahoma||Tax Commission||Tax Commission|
|Oregon||Department of Taxation||Department of Revenue|
|Pennsylvania||Department of Revenue||Department of Revenue|
|Philadelphia, PA||Department of Revenue||Department of Revenue|
|Puerto Rico||Department of Revenue||Department of Revenue [Departamento de Hacienda]|
|Rhode Island||Department of Revenue||Division of Taxation|
|South Carolina||Department of Revenue||Department of Revenue|
|South Dakota||Department of Revenue and Regulation||Department of Revenue|
|Tennessee||Department of Revenue||Department of Revenue|
|Texas||Comptroller of Public Accounts||Comptroller of Public Accounts|
|Utah||State Tax Commission||State Tax Commission|
|Virginia||Department of Taxation||Department of Taxation|
|Vermont||Department of Taxes||Department of Taxes|
|Washington||Department of Revenue||Department of Revenue|
|Wisconsin||Department of Revenue||Department of Revenue|
|West Virginia||Department of Revenue||Department of Revenue|
|Wyoming||Department of Revenue||Department of Revenue|
What's the best state for expat taxes?
This question is right up there with "what's the best place to live abroad?" The answer is the same — it depends. The best state residency for expats depends on your life situation, your needs, and what's most important to you.
States with no income tax for expats
Some states have no income tax. Those states are:
- South Dakota
States that only tax U.S. expats on interest and dividends
- New Hampshire
States with other considerations
While all states have rules on who qualifies as a resident, some states have more specific considerations:
- New Mexico
- South Carolina
- New York
Some expats refer to these states as "sticky" states because of the specific considerations. If you’re an expat and also considered a resident of one of these states we highly recommend getting started with an Expat Tax Advisor.
Do expats need to pay state taxes for past years?
If you're reading this article and just realized you should have been filing and paying U.S. federal and state taxes for expats, don't panic — we've helped thousands of U.S. citizens in this situation. There are special rules, called Streamlined Foreign Offshore Procedures, that let expats catch up on back taxes.
To qualify, you must:
How to file state expat taxes online with H&R Block Expat Tax Services
Ready to file state taxes as an expat? Here’s how to file your U.S. expat taxes online:
- Head on over to our Ways to File page
- Pick your journey — in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
- Once you’re through your chosen journey, you review your return and pay
- We file your return with the IRS
- You sit back knowing your taxes were done right
Now that you know expats may need to pay state taxes while living abroad, it's also important to understand that they can be more complicated than filing from within the States. Whichever method you choose to file, you can rest assured that your expat state taxes will be filed accurately, backed by H&R Block’s 100% Accuracy Guarantee.