State Tax Return Considerations

State taxes can be confusing for US expats that are living abroad. Many will ask ‘Do I need to pay State taxes even though I am living abroad? The answer to this, unfortunately, is not black and white.

Each US State has different rules as to who qualifies as a state resident and what type of income would be taxable in that State. Some States have no income tax charges, such as Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Other States will have varying rules and if you have any affiliation to these States, such as you lived there before moving abroad, you have some workdays there, or you own a property there, it is important to understand the rules and check how they may apply to you.

For example, in some States if you are considered domiciled in the state, you could still be liable to State taxes even though you are not physically present there. In some States you could be liable to State taxes by travelling to and working within the State, even if this is just a few days. This would include remote working from a home you may still maintain within the State. If you are unsure if any of the State income tax rules will apply to you, please contact our team and they will be happy to assist you.