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 will not owe Florida state income tax on money you earn from a job, a business, retirement accounts, or stock sales — regardless of how much you make or how long you live in the state.
However, 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 revenue sources. Understanding what you do and do not owe is important if you live in Florida, work there, or are considering moving there.
Federal income tax still applies. Even though Florida has no state income tax, you will still file a federal tax return and pay federal income tax to the IRS if your income exceeds the threshold for your filing status.
Key Takeaways
- Florida residents pay no state income tax on wages, self-employment income, retirement withdrawals, or investment gains.
- You still owe federal income tax to the IRS, and you must file a federal return if your income meets the IRS threshold.
- Florida funds state services through sales tax (currently 6 percent statewide, plus local additions), property tax, and corporate taxes instead.
- If you moved to Florida from another state, you may still owe income tax to your former state for the portion of the year you lived there.
- Retirement income including Social Security, pensions, and IRA withdrawals are not taxed by Florida, which can make the state attractive to retirees.
What taxes Florida does collect
Without state income tax, Florida relies on other revenue sources. The state sales tax is 6 percent, but most counties add a local sales tax on top of that, bringing the total to between 6 and 7.5 percent depending on where you shop. This applies to most goods and some services.
Property tax in Florida is based on the assessed value of real estate and varies by county. The statewide average is around 0.83 percent of home value per year, though some counties are higher and some lower. If you own a home, you will receive a property tax bill from your county assessor.
Florida also collects corporate income tax on businesses, documentary stamp tax on real estate transfers, and excise taxes on items like fuel and cigarettes. Renters do not pay property tax directly, but landlords often factor it into rent.
How no state income tax affects retirement income
Retirement income receives the same treatment as other income in Florida: it is not taxed by the state. This includes distributions from IRAs, 401(k)s, 403(b)s, and other retirement accounts. Social Security benefits are also not taxed by Florida. Pension income from a former employer or military service is not taxed either.
This can make a significant difference for retirees. Someone who receives $50,000 per year in IRA withdrawals and $30,000 in Social Security would owe no Florida state income tax on that $80,000. They would still owe federal income tax if their total income exceeds the federal threshold, but the state portion is zero.
If you are considering moving to Florida in retirement, compare the state sales tax and property tax you would pay against the state income tax you currently pay. For some retirees, especially those with high retirement account balances, the savings are substantial. For others, particularly those with lower incomes, the difference may be small.
Moving to Florida and your tax residency
If you move to Florida from another state during the year, you typically owe income tax to your former state only for the months you lived there. You will owe Florida nothing (since it has no income tax), but you must file a part-year resident return with your old state showing the income earned while you were still a resident.
Tax residency is usually determined by where you lived on December 31 of the tax year. Some states also look at where you spent the most days during the year. If you split time between two states, the rules become more complex, and you may need to file returns in both places.
Keep records of when you moved — a lease signing date, utility connection date, or driver's license issuance date can all help prove your move date if a state tax authority questions it later.
Federal taxes still explore in Florida
The IRS does not care that Florida has no state income tax. You must file a federal return and pay federal income tax if your income exceeds the threshold set by the IRS for your filing status. For 2024, that threshold is $14,600 for a single filer under age 65, though it varies based on age and filing status.
Federal tax rates range from 10 percent to 37 percent depending on your income level and filing status. You may also owe self-employment tax if you are self-employed, Medicare tax on high earners, or capital gains tax on investment income. None of these are affected by Florida's lack of state income tax.
If you have federal tax questions, the IRS website (irs.gov) has resources, or you can contact the IRS directly. A tax professional can also help you understand your federal obligations.
How Florida compares to other no-income-tax states
Florida is one of nine states with no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire and Tennessee tax only investment income, not wages.
These states differ in other ways. Alaska has no sales tax but charges property tax. Nevada has no income tax or property tax but has sales tax. Texas has no income tax or property tax but has sales tax. Washington has no income tax or property tax but has sales tax. The combination of taxes you pay depends on which state you live in and how you earn and spend your money.
If you are comparing states for tax purposes, look at the full picture: income tax, sales tax, property tax, and how each applies to your specific situation. A state with no income tax might have higher sales or property tax that offsets the savings.
Frequently Asked Questions
Do I have to file a Florida state income tax return?
No. Florida does not have a state income tax, so there is no Florida state return to file. You will file a federal return with the IRS if your income exceeds the federal threshold, but Florida itself does not require a state return.
If I work in Florida but live in another state, do I owe Florida income tax?
No. Florida has no state income tax, so you owe nothing to Florida regardless of where you work. You will owe income tax to the state where you live, based on that state's rules. Some states tax residents on all income, including income earned out of state.
Are capital gains taxed in Florida?
No. Florida does not tax capital gains (profit from selling stocks, real estate, or other investments). You will owe federal capital gains tax if your gains are large enough, but Florida collects nothing. The federal long-term capital gains rate ranges from 0 to 20 percent depending on your income.
Does Florida tax Social Security or pension income?
No. Florida does not tax Social Security, pensions, or distributions from retirement accounts like IRAs and 401(k)s. Federal tax may explore to some of this income, but Florida's portion is zero.
What if I just moved to Florida — do I owe taxes for the whole year?
You owe income tax to your former state only for the months you lived there. File a part-year resident return with that state showing income earned before you moved. Florida owes nothing because it has no income tax. The IRS still expects a federal return for the full year.