Florida does not charge state income tax on wages, salaries, or investment income

Florida is one of nine states with no state income tax. You will not owe Florida income tax on money you earn from a job, self-employment, retirement accounts, stock sales, or interest. If you live in Florida and work there, you pay federal income tax to the IRS but nothing to the state.

This applies whether you are a resident, a part-time resident, or someone who moved to Florida partway through the year. The state makes up the revenue through sales tax, property tax, and corporate taxes instead.

However, no state income tax does not mean you owe nothing to Florida. The state still collects property taxes, sales taxes, and other fees. And you still owe federal income tax regardless of where you live.

Key Takeaways

  • Florida residents pay no state income tax on wages, retirement income, investment gains, or self-employment earnings.
  • You still owe federal income tax to the IRS even though Florida has no state tax.
  • Florida funds state services through sales tax (currently 6 percent statewide, plus local additions), property tax, and corporate taxes.
  • If you moved to Florida during the year, you may owe income tax to your previous state for the months you lived there.
  • Retirees moving to Florida from other states do not owe back taxes to Florida, but they may still owe to their former state.

What you still owe when you live in Florida

No state income tax means Florida does not tax your paycheck. But you still pay other taxes. Florida's sales tax is 6 percent statewide, and most counties add a local sales tax on top of that, bringing the total to 6.5 to 7.5 percent depending on where you shop.

If you own property in Florida, you pay property tax to your county. The rate varies by county and by property type. Homeowners may may have access to for a homestead exemption that lowers the taxable value of a primary residence.

You also owe federal income tax. The IRS taxes income regardless of state. File Form 1040 with the IRS each year if your income exceeds the federal threshold for your filing status.

If you moved to Florida from another state during the year

When you move to Florida partway through a tax year, you may owe income tax to both your old state and Florida for the portions of the year you lived in each place. Florida owes you nothing, but your former state may.

For example, if you lived in New York from January through June and moved to Florida in July, New York may tax your income for January through June. You report this income on your New York state return for that year. Florida does not tax any of it.

Some states offer a credit for taxes paid to another state, which can reduce what you owe. Check your former state's tax authority website or speak with a tax preparer about how the move affects your return.

Retirement income and pensions in Florida

Florida does not tax retirement income, pensions, or distributions from retirement accounts. If you receive Social Security, a pension from a former employer, distributions from an IRA or 401(k), or income from an annuity, Florida does not tax it.

You still owe federal tax on most retirement income. The IRS taxes traditional IRA and 401(k) withdrawals as ordinary income. Roth IRA withdrawals are usually tax-free at the federal level if the account is at least five years old and you are 59½ or older. Social Security may be taxable at the federal level depending on your total income.

This makes Florida attractive to retirees, but the federal tax bill remains. Work with a tax preparer or use IRS Publication 554 (Tax Guide for Seniors) to understand what you owe to the federal government.

Self-employment 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 earnings. You still owe federal self-employment tax and federal income tax on the profit.

Self-employment tax covers Social Security and Medicare and is owed to the IRS, not to Florida. The rate is 15.3 percent on 92.35 percent of your net self-employment income (as of 2024). You also owe federal income tax on your business profit after deducting business expenses.

Florida does not have a state-level business income tax, but some cities and counties charge local business taxes or occupational licenses. Check with your city or county to see if a local fee applies to your type of work.

How Florida funds state services without income tax

Florida relies on sales tax, property tax, and corporate taxes to fund schools, roads, and other state services. The state sales tax is 6 percent, and most counties add a local portion, making the total 6.5 to 7.5 percent depending on location.

Property tax rates vary by county but typically range from 0.7 to 1 percent of assessed property value. Homeowners with a homestead exemption pay tax on a reduced value. Agricultural land and other property types may have different rates.

Corporations pay Florida corporate income tax on net income. The rate is 5.5 percent. The state also collects taxes on insurance premiums, fuel, and other specific goods and services.

Frequently Asked Questions

Do I have to file a Florida state tax return?

No. Florida has no state income tax, so there is no Florida state tax return to file. You file only with the IRS if your federal income exceeds the threshold for your filing status. Some people file with the IRS even when not required, for example to claim a refundable tax credit.

If I move to Florida, do I owe back taxes to the state?

No. Florida does not tax income retroactively. Once you are a Florida resident, you owe no state income tax on past or future earnings. However, your previous state may tax income you earned while living there, even after you move.

Does Florida tax investment income or capital gains?

No. Florida does not tax capital gains, dividends, interest, or other investment income. You may owe federal tax on investment income, but not to Florida. Report investment income on your federal return (Schedule B or Schedule D, depending on the type).

What if I work remotely for a company in another state?

If you live in Florida and work remotely for an out-of-state employer, Florida does not tax your wages. You owe federal income tax and possibly tax to the state where your employer is located, depending on that state's rules. Some states tax remote workers; others do not. Check your employer's state.

Are there any Florida taxes on retirement accounts or withdrawals?

No state tax on withdrawals. However, the federal government taxes traditional IRA and 401(k) withdrawals as income. Roth withdrawals are usually tax-free federally if conditions are met. Florida itself does not tax any retirement account withdrawals or distributions.