State and local taxes: what changes from state to state

Step 1 — Know the layers: federal, state and local

The IRS handles federal taxes; see our guides to your first tax return and your paycheck. States, counties and cities add their own. USA.gov lists the main kinds (USAGov):

• Income tax: depends on your income and on the tax rate where you live.
• Sales tax: a percentage of the price of what you buy. Most states and municipalities have one; rates can differ by item, and some items aren’t taxed.
• Real estate (property) tax: a tax on land and homes, usually paid to your local government.
• Personal property tax: a tax on things like cars and boats, which not every state or locality collects.

Each state writes its own rules, so this guide shows you where to look, not rates or amounts.

Step 2 — Find your state’s tax agency

Your state’s tax agency explains how much you owe, how to pay, when your return is due and how to check your refund (USAGov). Find it through USA.gov or the IRS list of state government websites, which points to each state’s tax information (IRS — State government websites). For county or city taxes, start from your local government’s website (USAGov — Local governments). Official lists are safer than search ads, and not every agency uses .gov: Florida’s is at floridarevenue.com (IRS — Florida).

A few examples (checked October 27, 2026):

For any other state, ask its tax agency whether it taxes your income. The IRS gives the same advice, and adds that some states follow U.S. tax treaties and some don’t (IRS — Tax treaties).

Step 3 — Give your employer the state paycheck form

When you start a job, you fill out the federal Form W-4 (see your paycheck). Some states have their own form, and the federal one may not be enough:

• California: the federal W-4 is for federal withholding only; you must file Form DE 4 for California. Without it, your employer must withhold as if you were single with zero allowances (EDD — DE 4).
• New York: with a federal W-4 (2020 or later) but no Form IT-2104, your employer may use zero allowances, which may mean the wrong amount is withheld. Complete IT-2104 when you start a job, and again after changes such as moving into or out of New York City or Yonkers (NY DTF — IT-2104 instructions).
• Illinois: give your employer Form IL-W-4 on or before your first day. Without it, your employer must withhold Illinois tax on your entire pay, without exemptions (IDOR — IL-W-4).

When you move or change jobs, ask your employer which state forms they need.

Step 4 — Understand sales tax and property tax

Sales tax can change from place to place. In New York, for example, the combined rate is the state rate plus any local rate, and it varies by county and city (NY DTF — Sales tax rates). California’s sales tax agency has a tool to look up the rate by address (CDTFA).

Property tax. Homeowners usually pay real estate tax to their local government; the amount can depend on the property’s market value, location and condition (USAGov). Texas has no state property tax, but local taxing units set rates and use the money for services such as schools, roads, police and fire protection (Texas Comptroller — Property tax). So “no state income tax” doesn’t mean “no taxes.”

If you rent, you won’t get a property tax bill. Still, Maryland’s tax agency explains its renters’ credit with the reasoning that “renters indirectly pay property taxes as part of their rent” (Maryland SDAT). California’s renter’s credit, for example, is claimed on the state return and has income limits (FTB — Renter’s credit). Ask your state agency whether it has one. For renting itself, see renting your first apartment.

Step 5 — In the year you move, check your residency

Each state defines “resident” in its own way. For example:

• New York: generally, you’re a resident if New York is your domicile (your permanent, primary home), or if you keep a permanent place to live there for substantially all of the year and spend 184 days or more in the state (NY DTF — FAQ).
• California: you’re a resident if you’re in California for other than a temporary or transitory purpose, or if California is your domicile and you’re away only temporarily (FTB — Residents).

These are state rules, separate from the federal tests in our tax residency guide.

You may be a part-year resident. New Jersey, for example, treats you as one if you became a resident during the year (NJ — Part-year residents). In California, a part-year resident pays California tax on all income received while a resident, wherever it came from, plus California-source income received while a nonresident (FTB — Part-year and nonresident). The forms differ by state (see the table in Step 2).

Income connected to two states. If you live in one state and work in another, you may owe tax in both, but your home state typically gives you a credit so the same income isn’t taxed twice (NY DTF — FAQ). California calls its version the Other State Tax Credit (FTB — Part-year and nonresident).

Filing federally as a nonresident? Your state may still expect a return. Illinois, for example, says that if you file federal Form 1040-NR and your income is taxed under federal law, you must file an Illinois return and attach a copy of your 1040-NR (IDOR — Filing requirements).

Step 6 — File your state return at tax time

Your state agency explains when its return is due and how to pay (USAGov). Even if you don’t have to file, a return may be the only way to get back state tax withheld from your pay: Illinois says you must file to get that refund (IDOR — Filing requirements), and New York lists it as a reason to file (NY DTF — FAQ).

Free ways to file:

• IRS-certified volunteers (VITA and TCE) prepare millions of federal and state returns each season; at select “Self-Prep” sites, you can prepare your own basic return with a volunteer’s help (IRS — Free tax return preparation).
• IRS Free File: some partners offer a free state return, others may charge for it, and Free File Fillable Forms has no state filing (IRS — Free File).
• Your state’s own options. California’s CalFile is free (FTB — CalFile), but for tax year 2025 it was only for full-year California residents (FTB — CalFile qualifications), and registering requires a California return filed in one of the last 5 years (FTB — CalFile). New York lists free options, including its own Taxpayer Assistance Program, for people under an income limit (NY DTF — E-file options).