Nonresident state income tax filing thresholds vary sharply from one state to the next. More than 20 states require a return from the first day you work there or the first dollar you earn, some set a dollar floor ranging from $100 to $15,300 in state-sourced income, and eight use a day count of 15 to 30 working days before filing is triggered.1Tax Foundation. Nonresident Income Tax Filing and Withholding Laws by State, 2026 Nine states don’t levy an individual income tax at all, so no nonresident return is possible. Which rule applies to you depends on the state, the kind of income, and sometimes on your home state’s tax laws.
States That Tax From the First Dollar or First Day
The largest group of states requires a nonresident return whenever any income is earned within their borders. Arizona, California, Colorado, Delaware, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, and Virginia all sit in this group, among others.1Tax Foundation. Nonresident Income Tax Filing and Withholding Laws by State, 2026 One day of paid work triggers the filing obligation. The actual tax owed on a single day may be tiny, but the return itself is still required.
States With Dollar Thresholds
Other states let nonresidents earn a specific amount before filing kicks in. The floors run from very low to substantial:
- Vermont: $100
- Iowa and Oklahoma: $1,000
- Wisconsin: $2,000
- Idaho: $2,500
- Georgia: $5,000 or 5 percent of total wages, whichever is less
- Minnesota: $15,300 in state-sourced income
Two states combine a day count with a dollar floor. Connecticut requires both more than 15 days of work and more than $6,000 in income before filing is required. Maine requires more than 12 days and more than $3,000.1Tax Foundation. Nonresident Income Tax Filing and Withholding Laws by State, 2026
States That Count Working Days
Eight states set their threshold in days rather than dollars. Illinois, Indiana, Louisiana, and Montana each allow up to 30 working days before a nonresident return is required. North Dakota sets its threshold at 20 days.1Tax Foundation. Nonresident Income Tax Filing and Withholding Laws by State, 2026
Watch for a mutuality condition. Some day-count states only extend the relief if your home state offers a similar exclusion or has no income tax. If your home state doesn’t reciprocate, the day-count relief disappears and you may owe from day one.
Withholding Thresholds Are Not Filing Thresholds
In 16 states, the point at which your employer must start withholding state tax is different from the point at which you personally must file. Arizona is a clear example: employers don’t have to withhold until a nonresident employee has worked 60 days in the state, but the employee’s filing obligation begins on day one.1Tax Foundation. Nonresident Income Tax Filing and Withholding Laws by State, 2026 A clean paycheck with no state tax deducted doesn’t mean nothing is owed. You can still be on the hook when you file.
What Kind of Income Counts
Only income sourced to the state counts against the threshold, and states source income differently depending on what it is.
Wages and Self-Employment Income
Wages, salaries, and self-employment income earned while you are physically working inside a state are the most common trigger. A week-long consulting job, a stretch of commuting across a state line, and a full year of on-site work all count. Business owners and partners also owe on their share of profits from operations within the state, whether or not they are personally present each day.
Rental Property and Real Estate Sales
Rental income from property inside a state is taxable to that state no matter where the owner lives. So are gains from selling real estate located there. Many states go further and require the buyer or closing agent to withhold a percentage of the sale price or the gain at closing when the seller is a nonresident, at rates ranging from roughly 2 percent to 8 percent. If the withholding exceeds the actual tax, you file a nonresident return to recover the excess.
Gambling Winnings
Casino winnings, lottery prizes, and similar gambling income are sourced to the state where the win occurs. A large payout during a visit can create a filing obligation there even without a paycheck from that state.
What Usually Stays With Your Home State
Interest, dividends, and other investment income generally follow your state of residence rather than the location of the bank or brokerage, so they don’t count toward nonresident thresholds unless they are tied to a business you operate in the state. Federal law also blocks states from taxing the retirement income of former residents who have moved away.
Remote Work and the Convenience of the Employer Rule
Remote workers can trigger a nonresident filing obligation in a state they have never set foot in. Under the convenience of the employer rule, a state can tax income you earn from home in another state if your employer is based in the taxing state. The theory is that the remote arrangement is for your convenience, not the employer’s, so the income is treated as if it were earned at the employer’s office.2Tax Foundation. State Individual Income Taxes on Nonresidents: A Primer
New York enforces this most aggressively. Income from a New York employer is allocated to New York unless the employer can show the remote location serves a genuine business purpose. Connecticut and New Jersey apply similar rules, but only against nonresidents whose home states have convenience rules of their own. Delaware, Nebraska, Oregon, and Pennsylvania also maintain some version of the doctrine.2Tax Foundation. State Individual Income Taxes on Nonresidents: A Primer The exceptions are narrow and generally cover only work that physically cannot be performed at the employer’s location.
If you work remotely for an employer in one of these states, assume a nonresident filing obligation may apply and confirm with a tax professional before deciding otherwise.
Reciprocal Agreements Between Neighboring States
Reciprocal agreements exist to spare commuters from filing in two states. Under one of these arrangements, two states agree that residents crossing the border to work will pay income tax only to their home state, and the work state gives up its claim to the wages.
About 16 states participate in reciprocal agreements, clustered in the Mid-Atlantic and Midwest. Pennsylvania and New Jersey run one of the best-known: compensation paid to Pennsylvania residents working in New Jersey isn’t subject to New Jersey income tax, and the reverse holds too. Illinois has agreements with Iowa, Kentucky, Michigan, and Wisconsin. Virginia has arrangements with several neighbors. Minnesota has agreements with Michigan and North Dakota.
p>To use one of these agreements, file a certificate of nonresidency with your employer so the work state stops appearing in your withholding. If your employer withholds for the wrong state anyway, you’ll need to file a nonresident return there to get the money back. Reciprocal agreements typically cover only wages and salaries. Business income, rental income, and other state-sourced income are not included.
If Your Home State Has No Income Tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t tax individual income. If you live in one of these states and earn income in a state that does, you pay the full nonresident tax with no offsetting credit at home, because there is no home state bill to offset. The nonresident tax is a pure additional cost.
One partial break: some day-count states extend their filing relief specifically to residents of no-income-tax states. Louisiana, North Dakota, Utah, and West Virginia offer day-based exclusions available to nonresidents whose home state either provides a similar exclusion or has no income tax.3Tax Foundation. Nonresident Income Tax Filing Laws by State The relief doesn’t extend to high-income individuals, professional athletes, or entertainers.
Whether You’ll Actually Be Taxed Twice
Filing in a nonresident state doesn’t usually mean paying the full rate to two states. Your home state gives you a credit against its own tax bill for the income tax you paid as a nonresident elsewhere.1Tax Foundation. Nonresident Income Tax Filing and Withholding Laws by State, 2026 The credit is capped at whatever the home state would have charged on the same income. Work in a higher-tax state and the credit covers only your home state’s share, leaving the difference as a net cost. Work in a lower-tax state and the credit wipes out that piece of your home state bill, with the remainder still owed at home. The total rarely reaches double taxation, but the extra return is still real work.
What Happens If You Skip the Filing
States exchange data with each other and with the IRS, and employer-reported W-2 information makes it straightforward for a state to spot income earned there without a corresponding return. Penalties look much like a late federal return: a failure-to-file charge that typically runs 5 percent of unpaid tax per month, capped at 25 percent.4Internal Revenue Service. Failure to File Penalty Interest accrues on top, commonly at annual rates from 7 to 11 percent depending on the state.
The bigger risk is the statute of limitations. Many states keep it open indefinitely when no return is filed at all, so they can pursue the tax, penalties, and interest years later. Filing a return, even a late one, starts the clock. If you missed prior years, filing voluntarily before the state contacts you often leads to reduced penalties.