Do Expats Pay State Taxes? State Tax Guide for Americans Living Abroad

Unlike almost everywhere else in the world, qualifying American expats still have a U.S. tax obligation to the Internal Revenue Service 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 United States taxes and state residency for expats below and help you get started on your own state tax return.

Ready to file for this tax year? 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 United States 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:

• Wages
• Interest
• Dividends
• Rental Income

Before you stress about paying taxes twice on the same taxable income (once to the U.S. and once to your new country) you should know there are tools and benefits available to expats. These benefits and tax credits, 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?”

Great question.

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 state 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 foreign income.

Some factors that can affect whether you’re considered a state resident for tax purposes 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:

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

States that only tax U.S. expats on interest and dividends

• Tennessee
• New Hampshire

States with other considerations

While all states have rules on residency status and who qualifies, some states have more specific considerations:

• California
• New Mexico
• South Carolina
• Virginia
• 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:

• Have lived in a foreign country without a U.S. abode for at least 330 days during one of the last three years
• Confirm it was an honest mistake that you failed to file U.S. tax returns and FBAR Get started with streamlined filing now.

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:

1. Head on over to our Ways to File page
2. Pick your journey — in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
3. Once you’re through your chosen journey, you review your return and pay
4. We file your return with the IRS
5. 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.

Get started on your expat taxes now!