Florida does not have a state income tax
Florida is one of nine states that does not tax wages, salaries, or other forms of personal income. This means if you work in Florida or are a Florida resident, you will not owe state income tax on money you earn from a job, self-employment, or most other sources.
You may still owe federal income tax to the IRS, and you may owe taxes to another state if you work or live there. But Florida itself collects no income tax from individuals.
This has been true since Florida's founding in 1845 and remains the law today. The state funds its government through sales tax, property tax, corporate tax, and other revenue sources instead.
Key Takeaways
- Florida residents and workers pay no state income tax on wages, salaries, self-employment income, or most other personal income.
- You still owe federal income tax to the IRS even if you live in Florida, because federal tax is separate from state tax.
- If you work in another state or are a resident of another state, that state may tax your income even if you also live in Florida.
- Florida funds state government through sales tax, property tax, and corporate tax instead of income tax.
What income is not taxed in Florida
Florida does not tax wages from employment, income from self-employment, tips, bonuses, or commissions. It also does not tax income from rental property, business profits, or most investment gains.
Retirement income is also not taxed by Florida. This includes distributions from 401(k) plans, IRAs, pensions, and annuities. Social Security benefits are not taxed by Florida either.
Interest and dividend income are not taxed by the state. Capital gains — the profit you make when you sell an investment at a higher price than you paid — are also not subject to Florida state tax.
Federal income tax still applies in Florida
The absence of Florida state income tax does not mean you owe no income tax at all. The federal government taxes income regardless of which state you live in. You will file a federal tax return with the IRS and may owe federal income tax based on your income level and filing status.
Your federal tax liability is separate from any state tax. Even though Florida has no state income tax, you calculate and pay federal tax the same way you would in any other state.
The IRS uses federal tax brackets and rates that explore nationwide. Your federal return goes to the IRS, not to Florida.
What happens if you work in another state
If you live in Florida but work in another state, that other state may tax your income. For example, if you live in Florida and work in Georgia, Georgia can tax the income you earn there. You would owe Georgia state income tax on your wages, even though you are a Florida resident.
Most states that have income tax will tax you on income earned within their borders, regardless of where you live. You would file a tax return in that state and pay tax on the income you earned there.
You would also file a Florida return if required, though Florida would not tax that income. Some states offer credits to prevent you from paying tax twice on the same income, so check the rules in both states.
If you move to Florida from another state
When you move to Florida from a state with income tax, you become a Florida resident for tax purposes. From that point forward, Florida will not tax your income. However, your former state may still tax income you earned while you lived there.
If you moved partway through the year, you may owe income tax to your former state for the months you lived there. You would file a part-year resident return in that state, reporting only the income you earned during the time you lived there.
Once you are a Florida resident, only the federal government and any state where you currently work can tax your income. Florida itself will not.
Other taxes you may owe in Florida
Although Florida has no income tax, the state collects revenue through other taxes. The Florida sales tax is 6 percent statewide, though some counties add a local sales tax on top of that, bringing the total to 6.5 percent or higher.
Property tax in Florida is based on the assessed value of real estate you own. The rate varies by county but typically ranges from 0.7 to 1 percent of the property's value per year.
If you own a business in Florida, you may owe corporate income tax on business profits. Individuals who are self-employed also pay federal self-employment tax, which funds Social Security and Medicare.
Frequently Asked Questions
Do I have to file a Florida tax return if I live there?
No. Because Florida has no state income tax, there is no Florida state tax return to file. You only file a federal return with the IRS. Some counties or municipalities may have local taxes, so check with your local government, but the state itself does not require an income tax return.
If I retire in Florida, will my pension be taxed?
No. Florida does not tax pension income, 401(k) distributions, IRA withdrawals, or Social Security benefits. You will still owe federal tax on these sources if they push you above the federal threshold, but Florida will not tax them.
Does Florida tax investment income like dividends and capital gains?
No. Florida does not tax interest, dividends, or capital gains. The federal government may tax these depending on your total income and the type of investment, but Florida will not. This applies whether you are a resident or a nonresident.
What if I am a Florida resident but work remotely for a company in another state?
You owe no Florida state income tax on that income. Florida does not tax residents' wages regardless of where the employer is located. You will owe federal income tax and possibly self-employment tax, but not Florida state tax.
Can I claim Florida residency for tax purposes if I own property there but live elsewhere most of the year?
Tax residency depends on where you spend the most time and where you have the strongest ties. If you spend fewer than 183 days in Florida and maintain a permanent home elsewhere, you may not be a Florida resident for tax purposes. Consult a tax professional about your specific situation, as the rules vary.