Florida does not have a state income tax

Florida is one of nine states with no state income tax on wages, salaries, or investment income. This means you do not pay a state tax on money you earn from a job, business, or investments. You still owe federal income tax to the IRS, and you still file a federal return every year — but you have no Florida state return to file based on earned income.

The absence of state income tax does not mean Florida has no taxes at all. The state funds schools, roads, and services through sales tax, property tax, corporate tax, and other sources. Understanding what you do and do not owe helps you avoid mistakes when you file your federal return or move to Florida from another state.

Key Takeaways

  • You do not file a Florida state income tax return on wages, salary, or investment gains, even if you live and work in Florida year-round.
  • You still owe federal income tax and must file a federal return with the IRS if your income exceeds the threshold for your filing status.
  • If you moved to Florida from a state with income tax, you may owe that state a return for the months you lived there before moving.
  • Florida taxes retirement income differently than wages — some retirement sources are taxed by other states even though Florida does not tax them.
  • Sales tax in Florida is 6 percent at the state level, plus local surtax that varies by county, so your total cost of goods is higher than in some other states.

What you still owe the federal government

No state income tax does not mean no taxes. The IRS still requires you to file a federal return and pay federal income tax if your income is above the threshold for your filing status. For 2024, that threshold is $14,600 for a single filer under age 65, $29,200 for a married couple filing jointly, and $23,200 for a head of household. If you earn more than these amounts, you must file.

Your federal return works the same way whether you live in Florida or any other state. You report all income, claim deductions or take the standard deduction, and calculate what you owe. The only difference is that you have no state return to file afterward. Many people use the same tax software or tax professional for their federal return whether they live in Florida or elsewhere.

Moving to Florida from a state with income tax

If you moved to Florida during the year from a state that has income tax — such as New York, California, or Massachusetts — you may owe that state a return for the months you lived there. You do not owe that state tax for the months after you moved to Florida, but you must report the income you earned while you were still a resident.

To file a part-year return in your former state, you will need to know the exact date you moved and have pay stubs or other income records showing what you earned before that date. Most states allow you to claim a credit on your federal return for taxes paid to another state, so you do not pay twice. Contact your former state's tax department or a tax professional to confirm the important date and what documents you need.

Retirement income and Florida's tax treatment

Florida does not tax most retirement income, including distributions from IRAs, 401(k)s, and pensions. However, your former state of residence may still tax this income if you were a resident when you earned it or when you retired. For example, if you worked in New York for 30 years and then retired to Florida, New York may still tax your pension payments even though you now live in Florida.

Social Security benefits are not taxed by Florida or by the federal government for most people, though the federal government does tax them for high-income earners. If you receive Social Security, you do not report it on a Florida state return because Florida has no state income tax. Your federal return may require you to report it depending on your total income.

Sales tax and property tax in Florida

While Florida has no income tax, it funds state services through other taxes. The state sales tax is 6 percent, and most counties add a local surtax that ranges from 0.5 to 2 percent, bringing the total to between 6.5 and 8 percent depending on where you shop. This is higher than the sales tax in states with income tax, so your cost of living may not be lower overall.

Property tax in Florida is based on the assessed value of your home and varies by county. Homeowners who have lived in their home for a long time may pay less because of the homestead exemption, which limits how much the assessed value can increase each year. If you own rental property or commercial property, you pay property tax on that as well.

Self-employment and business income in Florida

If you are self-employed or own a business in Florida, you do not pay Florida state income tax on your business income. You do pay federal self-employment tax and federal income tax on your net profit. You also pay Florida corporate tax if you operate as a corporation, though sole proprietors and partnerships do not pay this tax.

Self-employed people in Florida file Schedule C with their federal return to report business income and expenses, just as they would in any other state. You may also need to register for a Florida sales tax permit if you sell taxable goods or services, and you must collect and remit sales tax to the state. The absence of income tax does not mean you have no tax obligations — it means your obligations are different.

Moving out of Florida to a state with income tax

If you move from Florida to a state with income tax, you will owe that state a return for the months you live there. You will also need to file a part-year return in Florida for the months before you moved, though this is usually straightforward because Florida has no income tax — you are straightforward reporting that you left.

Some states tax you based on where you earned income, not where you live now. If you earned income in Florida before you moved, that state may not tax it. However, if you earned income in your new state after you moved, you will owe tax on that income to your new state. Keep records of your move date and your income before and after to file accurately.

Frequently Asked Questions

Do I have to file a Florida state tax return?

No. Florida has no state income tax, so you do not file a state return based on wages or investment income. You do file a federal return with the IRS if your income exceeds the threshold for your filing status.

If I live in Florida but work in another state, do I owe that state income tax?

Yes, you typically owe income tax to the state where you earned the income, not the state where you live. If you work in Georgia but live in Florida, you owe Georgia income tax on your wages. You may be able to claim a credit on your federal return to avoid paying twice.

Does Florida tax capital gains or investment income?

No. Florida does not tax capital gains, dividends, or interest income. You report this income on your federal return and pay federal tax on it, but you have no Florida state tax on investment income.

What if I receive unemployment benefits in Florida?

Florida does not tax unemployment benefits. You do not report them on a Florida state return. You may owe federal income tax on unemployment benefits depending on your total income, so report them on your federal return.

Can I deduct Florida sales tax on my federal return?

You can deduct either state income tax or state and local sales tax on your federal return, but not both. Since Florida has no income tax, you would deduct sales tax if you itemize deductions. Most people take the standard deduction instead, which is usually larger.