USA State Taxes


US state taxes operate on a similar principle to federal taxes. The basic principle of any tax return is to calculate the tax liability, from which it then departs, how much tax you have to pay or how much you will be refunded.

We would divide states in the US into three categories:

- States that do not have a state tax in place
- States that have a state tax but tend to refund the entire state tax
- States that have a state tax but do not refund it


Let's try to analyze each category a little bit in more detail.

States that do not have a state tax are those where your employer does not pay any state tax from you but does not refund any taxes. In such countries, it is not even necessary to file a tax return as there is no such possibility.

Such states in the USA are: Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, Tennessee, New Hampshire.

If you have worked in one of these states, your only obligation will be to file a federal tax return.

States that have a state tax in place but tend to refund it all. These are the countries where your employer pays tax for you in most cases, but when you file a tax return, the tax paid is usually refunded in full. These are countries where there is a high deductible tax item, which usually makes the tax liability zero.

Such states in the USA are: Virginia, Maryland, New York, New Jersey, Massachusetts, Ohio, California, Arizona, Connecticut, Minnesota

States that have a state tax but refund just part of it. These are the states in which your employer tends to pay the state tax for you, but in most cases, just part, sometimes even nothing, will come back, and in some cases, you will still incur a tax debt. These are states where deductible items are limited or cannot be used by non-residents in the US.

Such states in the USA are: Utah, North Carolina, South Carolina, Rhode Island, Alabama, Colorado, Delaware, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, 
Maine, Idaho

You can find the exact calculation of your tax return by using our free tax calculator.

Your Tax Wizard team