Nevada has no state income tax on wages, retirement income, or most other personal income

Nevada does not tax wages, salaries, tips, or most other forms of personal income. This applies to residents and nonresidents who work in the state. You will not file a Nevada state income tax return, and your employer will not withhold Nevada income tax from your paycheck.

However, Nevada does collect other taxes — on gambling winnings, business income in certain forms, and property. The absence of income tax does not mean the state collects no tax revenue. It means the revenue comes from different sources.

Key Takeaways

  • Nevada residents pay no state income tax on wages, salaries, retirement distributions, or Social Security benefits.
  • Gambling winnings are taxed by Nevada at the point of payout, though federal tax still applies.
  • Self-employed people and business owners may owe Nevada taxes on business income depending on the business structure.
  • Property tax, sales tax, and other state and local taxes still apply in Nevada despite the lack of income tax.

What income is not taxed in Nevada

Nevada does not tax W-2 wages, 1099 contractor income, retirement account distributions (401k, IRA, pension), Social Security benefits, or investment income like dividends and capital gains. If you receive income in any of these forms and live in Nevada, the state will not tax it.

This applies whether you are a Nevada resident or a nonresident who works in Nevada. A person who lives in California but works in Nevada and receives a Nevada paycheck pays no Nevada income tax on that wage.

The one major exception is gambling. Nevada taxes gambling winnings at the source — the casino or sportsbook withholds tax before paying you. Federal income tax also applies to gambling winnings.

Gambling winnings and Nevada tax

Nevada taxes gambling winnings. The amount withheld depends on the type of gambling and the size of the win. Slot machines and table games typically trigger withholding at 24 percent of the win if the payout is large enough. Sportsbooks and horse racing have different thresholds and rates.

The withholding is a Nevada state tax, separate from federal withholding. You may owe additional federal tax when you file your federal return, or you may receive a refund if too much was withheld. The casino or sportsbook will issue you a form documenting the win and withholding.

Small wins — under certain thresholds that vary by game type — are not subject to withholding. Ask the casino cage or sportsbook what the threshold is for the specific game or bet you are making.

Self-employment and business income in Nevada

Nevada does not tax business income for most business structures. Sole proprietors, partnerships, S-corporations, and LLCs taxed as pass-through entities do not owe Nevada income tax on business profit.

C-corporations are taxed differently. Nevada has a modified business and occupation tax (payroll tax) that applies to certain businesses, but it is not an income tax. The rate and applicability depend on the industry and payroll size. A tax professional or the Nevada Department of Taxation can tell you whether your specific business structure owes this tax.

Other Nevada taxes that do apply

Nevada collects sales tax, property tax, and various excise taxes. Sales tax rates vary by county and city but range from 7.375 percent to 8.375 percent. Property tax is assessed on real estate and some personal property.

Nevada also taxes fuel, cigarettes, alcohol, and other specific goods. Employers may owe payroll taxes for unemployment insurance and other state programs. The absence of income tax means these other revenue sources fund the state budget.

How Nevada compares to other states

Nine states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only investment income). Most other states tax wages at rates ranging from 1 percent to over 13 percent.

Some people move to Nevada specifically to avoid state income tax. Others move for employment or cost of living. The lack of income tax is one factor in Nevada's tax environment but not the only one — property tax, sales tax, and local taxes still apply and vary by location within the state.

What to do if you move to or from Nevada

If you move to Nevada from a state with income tax, you will stop owing that state's income tax once you establish Nevada residency. Residency is generally determined by where you spend the majority of the year and where you have a permanent home. The previous state may still tax income you earned there before you moved.

If you move away from Nevada to a state with income tax, you will owe that state's income tax on income earned after you move. Nevada will not tax income earned after you leave. Keep documentation of your move date and your new address to support your residency claim if either state questions it.

Remote workers who live in Nevada but work for an out-of-state employer do not owe Nevada income tax. The employer's state may tax the income depending on that state's rules, but Nevada does not.

Frequently Asked Questions

Do I have to file a Nevada state income tax return?

No. Nevada does not require residents to file a state income tax return because there is no state income tax on wages or most other income. You still file a federal return if you owe federal tax or are may have access to to a refund. If you had gambling winnings with withholding, you may need to file a Nevada return to claim a refund of excess withholding.

If I live in Nevada but work in another state, do I owe Nevada tax?

No. Nevada does not tax income earned outside the state. You may owe tax to the state where you work, depending on that state's rules. Check with that state's tax authority or a tax professional about your filing obligations there.

Are Social Security and retirement distributions taxed in Nevada?

No. Nevada does not tax Social Security benefits, pension distributions, or withdrawals from retirement accounts like 401k or IRA. These are not taxed by Nevada even if you are a resident. Federal tax may still apply depending on your total income and the type of retirement account.

What happens if I win money at a casino?

The casino withholds Nevada state tax at the time of payout. The rate depends on the game and win amount. You receive a form documenting the win and withholding. You may owe additional federal tax or receive a refund when you file your federal return. Ask the casino what the withholding rate is before you claim a large win.

Does Nevada tax investment income like stocks and dividends?

No. Nevada does not tax capital gains, dividends, interest, or other investment income. Federal tax applies to these forms of income depending on your total income and tax situation. State tax does not.