Which States Have No Income Tax?
For taxpayers in the majority of the states in the U.S., tax time means filing a return for federal and state taxes. However, that’s not the case for everyone across the country. If you’re a taxpayer in one of the nine states without an individual income tax, you are not required to prepare and file a state return.
The following states don’t have income tax:
- South Dakota
Additionally, these states don’t have income taxes for earned income, but they do tax dividend and interest income:
- New Hampshire
States Without Income Taxes – Additional Considerations
If you live in a state without individual income taxes, you won’t need to pay taxes on your wages or income from Social Security, pensions, or retirement plans, such as 401(k)s or an IRA. However, taxpayers in these states are still subject to other types of taxes, including local taxes or sales taxes.
How can you tell if a capital gain or loss is short term or long term? Find out more from the tax experts at H&R Block.
Do you know how to report taxes on stock option sales? Learn more from the tax experts at H&R Block.
Learn more on how taxes impact your employee stock purchase plan from the tax experts at H&R Block.
How do hobby-loss rules affect your income and taxes? Learn about the hobby test and get tax answers at H&R Block.