A Tax Fact from The Tax Institute at H&R Block

For those of you who live or work in states with an income tax return, here’s a reminder to get that state return filed. Generally, if you have a federal filing requirement, you also have a state filing requirement.
There are just a handful of states that don’t have an income tax.

They are:

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington and
• Wyoming
• Additionally, New Hampshire and Tennessee limit their state income taxation to dividends and interest income only.

Whether you have to file a state tax return depends on:

• Filing status
• Age
• Gross income, and
• Residency status

You generally must file a tax return in your state of residence reporting income from all sources and/or any state where you earn income or sell real estate.

There are consequences to not filing your state return and those consequences can quickly add up to lots of dollars. If a state return with a balance due is not filed by the due date, or within the extension period, a penalty will be assessed for both failure to file AND failure to pay. In addition to penalties, the states will also charge you interest.

By the way, the state receives information from the IRS regarding your federal return. When the state believes, based on that information, that you are required to file a state return but it does not find one on record, the state will send you a “failure to file notice.” So, even though you might be tempted to let your state return slide, we want to tell you that it is just as important to file and pay your state income tax as it is to file and pay your federal income tax.

This Tax Fact is brought to you by The Tax Institute at H&R Block.

To view other helpful tax information or listen to our Tax Fact podcasts, visit www.digits.hrblock.com

As always . . . everyone’s tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.

This Tax Fact is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.