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State Tax Returns

For most states, taxpayers have to file both federal income tax returns and state tax returns. However, most of the time state income tax returns are much easier to prepare and file than the federal income tax return. If a taxpayer has gone through the trouble of preparing his or her federal income tax return correctly, then the state tax return is very easy to prepare. If a taxpayer lived in more than one state or lives in one state but works in another, then the taxpayer may need to file multiple state tax returns.

Software to help prepare state tax returns

If the taxpayer uses a tax software such as TurboTax or TaxCut with state tax return filing, state tax return forms will automatically appear according to the information entered on the federal income tax level. Some software will include free state tax returns. Low income taxpayers can also file free state tax returns with their federal income tax returns.

Which states require taxpayers to file state income returns?

42 states including district of Columbia have individual income tax and require income tax returns from individual required to file (see exemptions below)

Which states do not require state tax returns to be filed? (which states do not have income tax?)

Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do not have individual income tax. NH and TN have taxes on interest and dividend in come in excess of limits that are based on filing status. Residents of NH or TN do not have to file state tax returns except for when they have certain levels of interest income or dividend income.

State Tax Returns

Rules and tax laws on filing state income tax returns

States with individual income tax have specific tax forms and instructions on how to properly prepare the state tax return.  When filing state tax return, you have to indicate your home state which is usually:

  • the state in which you reside or
  • the state where you are physically located.