Wyoming does not have a state income tax

Wyoming is one of nine states with no state income tax on wages, salaries, or investment income. You will not file a Wyoming state income tax return, and your employer will not withhold state income tax from your paycheck. This applies whether you work in Wyoming, live in Wyoming, or both.

However, no state income tax does not mean no taxes at all. Wyoming funds its government through other sources, and you may still owe federal income tax, property tax, and sales tax depending on your situation.

Key Takeaways

  • Wyoming has no state income tax on wages, salaries, bonuses, or investment income of any kind.
  • You still owe federal income tax to the IRS if your income exceeds the federal threshold for your filing status.
  • Wyoming collects revenue through sales tax (currently 4 percent statewide), property tax, and excise taxes on fuel and other goods.
  • If you move to Wyoming from another state, you do not owe back state income tax to Wyoming for prior years.
  • Remote workers living in Wyoming but employed by out-of-state companies do not pay Wyoming state income tax.

How Wyoming funds state government without income tax

Wyoming relies on sales tax, property tax, and mineral extraction taxes to pay for schools, roads, and state services. The statewide sales tax rate is 4 percent, though some counties and cities add local sales tax on top of that, bringing the total to between 4 and 6 percent depending on where you shop.

Property tax in Wyoming is based on the assessed value of real estate and personal property. Tax rates vary by county and municipality. Mineral taxes — particularly on oil, natural gas, and coal — historically made up a large share of state revenue, though that has fluctuated with commodity prices.

This structure means Wyoming residents pay more in sales and property tax than residents of states with income tax, but the trade-off is the absence of state income tax on earnings.

Federal income tax still applies in Wyoming

Wyoming's lack of state income tax does not exempt you from federal income tax. You must file a federal return with the IRS if your income exceeds the threshold for your filing status. For 2024, that threshold is $14,600 for a single filer under age 65, though the amount changes yearly and depends on whether you are claimed as a dependent.

Your federal tax liability is the same in Wyoming as it would be in any other state. The IRS does not reduce your federal tax because your state has no income tax. If your employer withholds federal tax from your paycheck, that money goes directly to the federal government, not to Wyoming.

What happens if you move to Wyoming from a state with income tax

If you relocate to Wyoming from a state that has income tax, you do not owe that state income tax for years after you move. Once you establish Wyoming residency, Wyoming has no income tax to replace it. You will, however, owe property tax and sales tax in Wyoming going forward.

Some states require you to file a part-year resident return for the year you move, showing income earned before and after your move date. Check with your former state's tax authority if you moved mid-year, as a few states still claim tax on income earned while you were a resident, even if you left partway through the year.

Remote workers and Wyoming income tax

If you live in Wyoming and work remotely for a company based in another state, you do not pay Wyoming state income tax on that income. Wyoming has no income tax regardless of where your employer is located. Your employer will not withhold Wyoming state tax, and you will not file a Wyoming state return.

You do owe federal income tax on remote work income, and you may owe sales tax on purchases you make in Wyoming. Some states try to tax remote workers who live within their borders, but Wyoming does not, so living in Wyoming while working for an out-of-state employer is a straightforward situation from a state tax standpoint.

Self-employment and business income in Wyoming

Self-employed people and business owners in Wyoming do not pay state income tax on business profits. You will not file a Wyoming state return for self-employment income. However, you must pay federal self-employment tax (Social Security and Medicare tax) to the IRS, and you owe federal income tax on your net business income.

Wyoming does not have a corporate income tax either, so if you operate as a corporation or LLC, you do not pay Wyoming state tax on corporate profits. You will still owe federal corporate tax if you are structured as a C corporation, or you will report business income on your personal federal return if you are a sole proprietor, partnership, or pass-through entity.

Sales tax, property tax, and other Wyoming taxes you do owe

While Wyoming has no income tax, you will encounter other taxes. The statewide sales tax is 4 percent on most goods and services. Some counties and cities add local sales tax, so your total rate may be 5 or 6 percent. Groceries are taxed at the full rate in Wyoming, unlike some states that exempt food.

Property tax is assessed on real estate and, in some cases, personal property like vehicles. The rate depends on your county and municipality. Wyoming also collects excise taxes on gasoline, diesel, cigarettes, and alcohol. If you own a vehicle, you pay registration fees and may owe use tax if you purchase a vehicle out of state and bring it to Wyoming.

Frequently Asked Questions

Do I have to file a Wyoming state tax return?

No. Wyoming has no state income tax, so there is no Wyoming state return to file. You file only your federal return with the IRS if your income exceeds the federal threshold.

If I work in Wyoming but live in another state, do I owe Wyoming income tax?

No. Wyoming has no state income tax on any income, regardless of where you live. However, your home state may tax your Wyoming income if that state has an income tax. Check with your home state's tax authority.

Does Wyoming tax retirement income, pensions, or Social Security?

No. Wyoming has no state income tax on any type of income, including retirement distributions, pensions, and Social Security benefits. You may owe federal tax on some retirement income depending on your total income and filing status.

What if I inherit money or property in Wyoming?

Wyoming has no state income tax or inheritance tax. You do not owe Wyoming tax on inherited money or property. Federal estate tax may explore if the estate is very large, but that is a federal matter, not a Wyoming one.

Are there any deductions or credits I can claim on Wyoming taxes?

There is no Wyoming state return to file, so there are no Wyoming deductions or credits. You claim deductions and credits on your federal return only.