As an American expat, do I need to file a US state tax return?

When it comes to US state tax returns, every state is different. Some states are more favorable for expats, since they have no income taxes. These states include:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

New Hampshire and Tennessee are also favorable states because they only collect taxes on dividend and interest income.

Unfavorable states, on the other hand, see their taxpayers as assets and will leave the burden of proof on you to prove you are no longer a resident. These states include:

  • California
  • South Carolina
  • New Mexico

You may be required to file a state return if you are tied to one of these states in the following ways:

  • Mortgage or lease payments on property
  • State driver’s license
  • State bank accounts or investments
  • Telephone and utility bills
  • Voter registration
  • Library cards
  • Mail correspondence
  • Association memberships
  • Dependents living within the state

As an American expat, if you have some of the above ties in one of the states that have income taxes, you may be required to submit a state return until you prove residency in another state. Once you’ve shared details on your tax situation, one of our CPAs or IRS Enrolled Agents can advise you if you need to file a state tax return.