Florida does not have a state income tax
Florida is one of nine states that does not tax wages, salaries, or other earned income. You will not owe Florida state income tax on money you earn from a job, self-employment, retirement accounts, or most other sources. This applies whether you live in Florida year-round, moved there recently, or work remotely for a company based elsewhere.
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. But for individuals, the lack of income tax is a significant difference from most other states.
Key Takeaways
- Florida collects no state income tax on wages, self-employment income, retirement distributions, or investment gains.
- You still owe federal income tax to the IRS, and Florida still collects sales tax and property tax.
- If you moved to Florida from another state, you may still owe taxes to your former state on income earned while you lived there.
- Retirees benefit from the lack of income tax, but should verify residency requirements if they split time between states.
What income is not taxed in Florida
Florida does not tax W-2 wages from an employer, 1099 self-employment income, Social Security benefits, pension distributions, IRA withdrawals, 401(k) distributions, investment income, rental income, or capital gains. If the income would normally be taxable at the federal level, Florida simply does not add a state layer on top of it.
This applies to all residents and anyone working in Florida, regardless of citizenship status or how long they have lived there. A person who just moved to Florida last month and a person who has lived there for 30 years pay the same state income tax rate: zero.
Federal income tax still applies
The absence of Florida state income tax does not reduce what you owe the federal government. You must still file a federal tax return with the IRS and pay federal income tax based on your income, filing status, and deductions. The IRS tax brackets and rates are the same for Florida residents as for residents of any other state.
Many people confuse state and federal taxes. If you see a tax refund or owe taxes, that is almost always a federal matter. Florida does not issue state income tax refunds because it does not collect state income tax in the first place.
Sales tax and property tax in Florida
Florida makes up for the lack of income tax through other taxes. The state sales tax is 6 percent, and counties can add up to 1.5 percent on top of that, bringing the total to as high as 7.5 percent depending on where you shop. Groceries are generally exempt, but most other purchases are taxed.
Property tax in Florida varies by county but typically ranges from 0.7 to 1 percent of the assessed home value per year. Homeowners can claim a homestead exemption that reduces the taxable value of a primary residence, which lowers the annual bill. Renters do not pay property tax directly, but landlords pass some of the cost along through rent.
Moving to Florida from another state
If you moved to Florida from a state with income tax, you may still owe taxes to your former state on income you earned while you lived there. For example, if you worked in New York until June and moved to Florida in July, New York may tax your income through June. The rules depend on the state you left and when you officially moved.
To establish Florida residency for tax purposes, you generally need to show that you moved with the intent to stay. This can include getting a Florida driver's license, registering to vote, buying or renting a home, and closing ties to your former state. If you split time between two states, your former state may still claim you as a resident and tax your income. Document the date you moved and the steps you took to establish residency in case you need to prove it to another state's tax authority.
Retirees and part-time residents
Retirees often move to Florida specifically because of the lack of state income tax. Pension income, Social Security, and IRA distributions are not taxed by Florida, which can result in significant savings compared to higher-tax states. However, if you maintain a home in another state or spend more than half the year elsewhere, that state may consider you a resident and tax your income.
Some states use the "domicile" test, which looks at where you intend to live permanently. Others use a "physical presence" test based on how many days you actually spend there. If you are a snowbird or split your time between states, research the rules of both states before assuming you owe no income tax. A few states will tax you as a resident even if you move away, so check your former state's rules as well.
Self-employed and business income
If you are self-employed or own a business in Florida, you do not owe Florida state income tax on your business profits. However, you still owe federal self-employment tax and federal income tax on your net business income. You may also owe sales tax on products you sell, depending on what you sell and to whom.
Florida does not have a state corporate income tax either, which is one reason many businesses incorporate or operate in the state. But the lack of state income tax does not reduce your federal obligations or change how you calculate self-employment tax for Social Security and Medicare purposes.
Frequently Asked Questions
Do I have to file a state tax return in Florida?
No. Florida does not require residents to file a state income tax return because there is no state income tax. You still must file a federal return with the IRS if your income exceeds the federal threshold for your filing status.
If I work remotely for a company in another state, do I owe that state's income tax?
No, if you are a Florida resident. You owe income tax to the state where you live, not where your employer is located. If you are a Florida resident working remotely for a New York company, you owe no New York state income tax. However, if you are a resident of another state working remotely, you owe that state's income tax regardless of where your employer is.
Does Florida tax retirement income like pensions and Social Security?
No. Florida does not tax Social Security benefits, pension distributions, IRA withdrawals, or 401(k) distributions. This is one reason many retirees move to Florida.
What if I just moved to Florida — when do I stop owing taxes to my old state?
It depends on the state you left. Most states stop taxing you once you establish residency elsewhere, but the exact rules vary. Document your move date and the steps you took to establish Florida residency. If your former state contacts you, you can show proof of the move.
Does Florida have any income-based taxes at all?
No state income tax, but Florida does tax corporate income at the business level and collects sales tax and property tax from residents. Individuals do not owe Florida income tax on any type of personal income.