Complete State Tax Guide 2024
A comprehensive guide to understanding state tax requirements across all 50 US states. Learn about filing obligations, tax rates, residency rules, and strategies for multi-state tax situations.
Expert Tip: State tax laws can be complex and change frequently. This guide provides general information, but consult with a tax professional for your specific situation.
Table of Contents
States with No Income Tax
Nine states do not impose a state income tax on individuals. This can result in significant tax savings, but consider other factors like sales tax, property tax, and cost of living.
Alaska
No state income tax, but some local taxes may apply
Florida
No state income tax
Nevada
No state income tax
New Hampshire
No earned income tax, but taxes dividends and interest
South Dakota
No state income tax
Tennessee
No earned income tax, limited investment income tax
Texas
No state income tax
Washington
No state income tax on individuals
Wyoming
No state income tax
Flat Tax States
These states impose a single tax rate on all income levels, making tax calculations simpler but potentially less progressive.
| State | Tax Rate | Notes |
|---|---|---|
| Colorado | 4.40% | Flat rate with various deductions available |
| Illinois | 4.95% | Flat rate for individuals |
| Indiana | 3.23% | Flat rate plus county taxes |
| Kentucky | 5.00% | Flat rate system |
| Michigan | 4.25% | Flat rate for individuals |
| North Carolina | 4.75% | Recently moved to flat tax system |
| Pennsylvania | 3.07% | Flat rate plus local taxes |
| Utah | 4.85% | Flat rate with credits available |
High Tax States
These states have the highest marginal income tax rates in the nation. High earners should carefully consider the tax implications of residency.
California
13.3%Progressive rates, highest in nation
New York
10.9%Progressive rates plus NYC tax
New Jersey
10.75%Progressive system
Oregon
9.9%No sales tax but high income tax
Minnesota
9.85%Progressive rates
Hawaii
11.0%Highest marginal rate
Understanding State Residency Rules
Your state tax filing requirements depend largely on your residency status. States generally use these categories:
Full-Year Resident
You maintain your domicile in the state or spend more than 183 days in the state
Tax Implication: Taxed on all income regardless of source
Part-Year Resident
You moved into or out of the state during the tax year
Tax Implication: Taxed on all income while resident, plus state-source income while non-resident
Non-Resident
You don't meet residency requirements but have state-source income
Tax Implication: Taxed only on income sourced to that state
State Filing Requirements
Filing requirements vary by state, but generally follow these patterns:
| State/Category | Filing Requirement | Income Threshold |
|---|---|---|
| General Rule | If required to file federal return and have state income | Varies by state, typically $1,000-$5,000 |
| California | All residents must file if income exceeds standard deduction | $18,600 (single), $37,200 (married filing jointly) for 2023 |
| New York | Must file if federal filing required or NY income over threshold | $3,100 (single), $4,700 (married filing jointly) for 2023 |
| Texas | No state income tax filing required | N/A - No state income tax |
Common State Tax Deductions
State deductions can vary significantly from federal deductions. Here are some common ones:
Federal Tax Deduction
Alabama, Iowa, Louisiana, Missouri, Montana, Oregon
Standard Deduction
Most states follow federal amounts
State and Local Tax Deduction
Not available at federal level for 2018-2025
Retirement Income Exclusion
Many states exclude some pension/401k income
Military Pay Exclusion
Most states exclude military pay for non-residents
Multi-State Tax Considerations
Many taxpayers have income from multiple states or move during the tax year. Here are common scenarios and solutions:
Working in Multiple States
Challenge:
May owe taxes to multiple states
Solution:
Credit for taxes paid to other states usually available
Different State Income Sources
Challenge:
Rental income, business income, etc. in various states
Solution:
File non-resident returns in source states, claim credits on resident return
Moving During Tax Year
Challenge:
Part-year residency in multiple states
Solution:
File part-year resident returns in both states
Retirement Across State Lines
Challenge:
Pension from one state, residing in another
Solution:
Check reciprocity agreements and pension exclusions
State Tax Planning Strategies
Residency Planning
- • Carefully document days spent in each state
- • Consider domicile factors beyond just time
- • Review voting registration and driver's license
- • Plan timing of major moves
Timing Strategies
- • Time income recognition carefully
- • Consider year-end bonuses and timing
- • Plan retirement distributions
- • Coordinate with federal tax planning
Business Considerations
- • Choose business entity carefully
- • Consider state-specific business taxes
- • Plan for nexus and apportionment
- • Review state R&D credits
Compliance Tips
- • Keep detailed records of all income sources
- • Track travel and work locations
- • File all required returns timely
- • Consider professional assistance
Important State Tax Deadlines 2024
General Deadlines:
- • April 15: Most state individual returns due
- • May 15: Delaware, Hawaii individual returns
- • October 15: Extended returns due (most states)
- • November 15: Delaware, Hawaii extended returns
Quarterly Estimates:
- • January 15: Q4 estimated taxes
- • April 15: Q1 estimated taxes
- • June 15: Q2 estimated taxes
- • September 15: Q3 estimated taxes
Need Help with State Taxes?
State tax situations can be complex, especially with multi-state issues. As an IRS Enrolled Agent, I can help you navigate state tax requirements and ensure compliance across all states where you have obligations.