If you have taxable income on your federal return, or state
income taxes were withheld from your income, you will have to
file a return with the state in which you earned the income. All
but seven states in the United States impose income taxes on individuals
similar the federal income tax (but with lower rates). The states
that do not impose an income tax on individuals are: 1) Alaska
(you actually get paid for living there), 2) Florida, 3) Nevada,
4) South Dakota, 5) Texas, 6) Washington, and 7) Wyoming.
States are independent from one another in their taxing authority,
and all state tax forms differ in some respects. State income
tax forms usually start with federal taxable income, or federal
adjusted gross income, and require a few adjustments. The states
are not bound to honor federal tax treaties, but most do. Those
that do not (that I am aware of) are: 1) Alabama, 2) Arkansas,
3) California, 4) Connecticut, 5) Hawaii, 6) Kansas, 7) Kentucky,
8) Louisiana, 9) Maryland, 10) Mississippi, 11) New Jersey, 12)
North Dakota, and 13) Pennsylvania. If you live or work in one
of these states, you will owe state income tax even though your
income is exempt from federal income tax by a treaty.
If you worked in more than one state, you will probably have
to file a part-year return with each state. Just about all the
states have Web pages from which you can download the necessary
forms. Links to all state revenue department home pages can be
found at the U.S. Treasury's State Links page. Another directory
of state tax information is at taxsites.com.
