Florida has no state income tax on wages, retirement income, or investment gains

Florida does not tax your wages, salary, or most forms of income. You will not file a Florida state income tax return, and your employer will not withhold state income tax from your paycheck. This applies whether you work in Florida, live in Florida, or both. The state funds itself through sales tax, property tax, and corporate taxes instead.

If you moved to Florida from another state, you do not owe back taxes to Florida on income you earned before the move. If you work remotely for an out-of-state employer while living in Florida, Florida does not tax that income. The only exception is if you are a nonresident who earned income specifically within Florida — in that case, you may owe tax to Florida on that portion only, though most people in this situation do not.

Key Takeaways

  • Florida residents pay no state income tax on wages, pensions, Social Security, investment income, or retirement account withdrawals.
  • You will not file a Florida state income tax return unless you are self-employed and owe self-employment tax to the federal government.
  • Moving to Florida does not create a tax bill for income earned in other states before you moved.
  • Florida funds state operations through sales tax (currently 6 percent statewide, higher in some counties), property tax, and corporate taxes.
  • You still owe federal income tax on all income, and some counties add local sales tax on top of the state rate.

What you still owe the federal government

Having no Florida state income tax does not mean you owe nothing to the IRS. You must file a federal tax return if your income exceeds the federal threshold for your filing status. For 2024, that threshold is $14,600 for a single person under 65, and $29,200 for a married couple filing jointly under 65. These amounts change each year.

You will owe federal income tax on wages, self-employment income, rental income, investment gains, retirement account withdrawals, and most other income sources. The federal tax rate depends on your total income and filing status. If you are self-employed, you also owe self-employment tax (Social Security and Medicare tax) to the federal government, which is separate from income tax.

Sales tax and property tax in Florida

Florida's state sales tax is 6 percent on most goods and services. Many counties add a local sales tax on top of this, bringing the total to between 6 and 7.5 percent depending on where you shop. Groceries, prescription medications, and some medical equipment are exempt from sales tax.

If you own property in Florida, you pay property tax to your county. The rate varies by county and is based on the assessed value of your home or land. Homeowners with a primary residence may may have access to for a homestead exemption, which reduces the taxable value. Property tax bills are due by March 31 each year, though you can pay in installments.

Self-employment and business income in Florida

If you are self-employed or own a business in Florida, you do not owe Florida state income tax on your business profit. However, you must pay federal self-employment tax and federal income tax on that profit. You will file Schedule C (Profit or Loss from Business) with your federal return to report business income and deductible expenses.

Florida does impose a corporate income tax on C corporations at a rate of 5.5 percent. If your business is structured as an S corporation, partnership, or LLC taxed as a pass-through entity, you do not owe Florida corporate tax — the income passes through to your personal return, where Florida does not tax it. Sole proprietors and single-member LLCs do not owe Florida corporate tax.

Retirement income and pensions

Florida does not tax Social Security benefits, pensions, 401(k) withdrawals, IRA distributions, or annuity payments. If you are retired and living on pension or retirement account income, you owe no Florida state tax on that money. This is one reason Florida attracts retirees from other states.

You still owe federal tax on most retirement income. Social Security benefits are taxed at the federal level only if your combined income (adjusted gross income plus half your Social Security benefits) exceeds $25,000 for a single filer or $32,000 for a married couple filing jointly. Withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income at the federal level. Roth IRA withdrawals are not taxed if you meet the holding period and age requirements.

Investment income and capital gains

Florida does not tax capital gains, dividends, or interest income. If you sell stock, real estate, or other investments at a profit, you owe no Florida tax on the gain. If you receive dividend or interest payments, Florida does not tax them. This applies to all residents, regardless of how much investment income you earn.

The federal government does tax capital gains and investment income. Long-term capital gains (assets held over one year) are taxed at preferential rates of 0, 15, or 20 percent depending on your income. Short-term gains and dividends are taxed as ordinary income. Interest income is taxed as ordinary income at your marginal federal rate.

Moving to Florida and tax residency

If you move to Florida from another state, you become a Florida resident for tax purposes once you establish residency. This typically means you have a permanent home in Florida and spend more than half the year there, though the exact rules vary by state. Once you are a Florida resident, you owe no Florida income tax on any income, regardless of where it was earned.

Your previous state may still claim you owed tax on income earned while you lived there. If you moved mid-year, you may owe tax to your old state on income earned before the move. You will file a part-year resident return in your old state showing only the income earned while you lived there. Florida will not tax any of that income. Keep documentation of your move date — utility bills, lease or deed, and driver's license renewal — in case your old state questions your residency change.

Frequently Asked Questions

Do I need to file a Florida state tax return?

No. Florida does not require a state income tax return. You only file a federal return with the IRS. If you are self-employed, you file Schedule C with your federal return to report business income, but you do not file a separate Florida return.

If I work remotely for a company in another state, do I owe Florida tax?

No. Florida does not tax wages earned by residents, regardless of where the employer is located. You owe federal income tax on that wage income, but no Florida state tax. Your employer should withhold federal tax only, not Florida state tax.

What if I moved to Florida partway through the year?

You may owe tax to your previous state on income earned before you moved. File a part-year resident return in that state showing only the income earned while you lived there. Florida will not tax any income. Keep your move documentation to support the residency change date.

Does Florida tax Social Security or pension income?

No. Florida does not tax Social Security, pensions, 401(k) withdrawals, or IRA distributions. You may owe federal tax on some of this income, but Florida imposes no state tax on retirement income.

Are there any Florida taxes I do owe?

Yes. You pay sales tax (6 percent statewide, higher in some counties) on most purchases, and property tax on real estate based on your county's rate. If you own a business structured as a C corporation, you owe Florida corporate income tax at 5.5 percent. You also owe federal income tax on all income above the threshold for your filing status.