Florida does not have a state income tax

Florida is one of nine states in the U.S. that does not collect income tax on wages, salaries, or investment returns. This means you do not owe Florida state income tax on money you earn, regardless of how much you make or where you work.

However, you may still owe federal income tax to the IRS, and you may owe income tax to another state if you worked there or moved from there during the tax year. Florida's lack of state income tax does not affect your federal filing requirements.

Some people move to Florida specifically because of this tax advantage, but the state makes up the revenue through other taxes: sales tax, property tax, corporate tax, and various fees. Understanding what taxes you do owe in Florida is important for budgeting and tax planning.

Key Takeaways

  • Florida collects no state income tax on wages, salaries, pensions, or investment income.
  • You still owe federal income tax to the IRS, even though Florida has no state income tax.
  • Florida funds state services through sales tax (currently 6 percent statewide, plus local additions), property tax, and corporate taxes.
  • If you worked in another state during the year or moved from a state with income tax, you may owe that state income tax even if you now live in Florida.

What taxes Florida does collect

Although Florida has no income tax, the state collects revenue through several other channels. The most visible is sales tax, which is 6 percent at the state level. Most 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.

Property tax is another major source of state and local revenue. If you own real estate in Florida, you pay property tax to your county. The rate varies by county but typically ranges from 0.7 to 1.1 percent of the property's assessed value per year.

Florida also collects corporate income tax on businesses, documentary stamp tax on real estate transfers, and various licensing and permit fees. Renters do not pay property tax directly, but landlords factor it into rent.

How federal income tax still applies to you

Living in Florida does not exempt you from federal income tax. You must file a federal tax return with the IRS if your income exceeds the threshold set by the IRS for your filing status and age. For 2024, that threshold is typically between $13,850 and $27,700 depending on whether you are single, married, or over 65.

Federal tax is separate from state tax. The IRS collects it regardless of which state you live in. You report federal income on Form 1040 and send it to the IRS, not to Florida. Florida's Department of Revenue does not process federal returns.

If you have self-employment income, you also owe federal self-employment tax (Social Security and Medicare tax), which is about 15.3 percent of your net earnings. This is separate from both state and federal income tax.

If you moved to Florida from another state

If you moved to Florida partway through the tax year, you may owe income tax to your former state for the months you lived there. Most states tax residents on all income earned while they lived in that state, even if you have since moved.

For example, if you lived in New York from January through June and earned $40,000, then moved to Florida in July, you owe New York state income tax on that $40,000. You do not owe Florida state income tax on it because you were not a Florida resident when you earned it.

When you file your federal return, you will also file a return in your former state for the portion of the year you lived there. Some states offer credits to prevent double taxation, but you still must file in both places.

Retirement income and pensions in Florida

One reason many retirees move to Florida is that the state does not tax retirement income. If you receive a pension, distributions from an IRA or 401(k), or Social Security, Florida does not collect state tax on any of it.

However, you still owe federal income tax on most retirement income. Social Security benefits are taxed federally only if your combined income exceeds certain thresholds, but pensions and IRA withdrawals are generally taxable at the federal level.

If your retirement income came from working in another state, that state may still try to tax it. Some states tax pensions only if you earned them while a resident, while others tax all pension income from residents regardless of where it was earned. Check with your former state's tax authority if you are unsure.

Military pay and other special income

Florida does not tax military pay, even for active-duty service members stationed in Florida. This is true whether you are on active duty, in the reserves, or retired from the military. Your military retirement pay is also not subject to Florida state tax.

However, military pay is still subject to federal income tax. You will receive a W-2 or similar form showing your military income, and you must report it on your federal return.

Some other types of income are also exempt from Florida tax, including certain types of investment income and distributions from specific types of accounts. If you have questions about whether a particular income source is taxed in Florida, contact the Florida Department of Revenue.

How to file your federal return while living in Florida

Even though you do not file a Florida state return, you still file a federal return with the IRS. You can file online using IRS-approved software, by mail, or through a tax preparer. The deadline is typically April 15 each year.

When you file, you will report your income, deductions, and credits on Form 1040. If you have self-employment income, you will also file Schedule C and Schedule SE. If you have investment income, you may file Schedule D or other schedules depending on the type of income.

You do not need to file anything with Florida unless you owe Florida taxes from a previous year or you worked in Florida and your employer withheld Florida tax by mistake. If that happens, you can file a claim for refund with the Florida Department of Revenue.

Frequently Asked Questions

Do I have to file a Florida state tax return?

No. Florida does not have a state income tax, so there is no Florida state tax return to file. You only file a federal return with the IRS. If you worked in another state during the year, you may need to file a return in that state.

If I move to Florida, do I get a refund of taxes I paid to my old state?

No. Taxes you paid to your former state are not refunded just because you moved. However, when you file your federal return, you may be able to claim a credit for taxes paid to another state, which can reduce your federal tax. Your former state may also offer its own credits or refunds depending on its rules.

Does Florida tax Social Security benefits?

No. Florida does not tax Social Security benefits. However, the federal government may tax your Social Security depending on your total income. If your combined income (adjusted gross income plus nontaxable interest plus half your Social Security) exceeds certain thresholds, up to 85 percent of your benefits may be taxable federally.

What if my employer withheld Florida income tax from my paycheck?

If your employer mistakenly withheld Florida state tax, you can file a claim for refund with the Florida Department of Revenue. You will need your W-2 and proof of the withholding. Contact the Florida Department of Revenue for the current form and instructions.

Do I owe federal self-employment tax if I live in Florida?

Yes. If you are self-employed, you owe federal self-employment tax (Social Security and Medicare) regardless of where you live. This is about 15.3 percent of your net self-employment income. You report it on Schedule SE when you file your federal return.