Nevada does not have a state income tax

Nevada is one of nine states with no state income tax on wages, salaries, or investment income. This means you will not owe Nevada state income tax on money you earn, no matter how much you make. If you live and work in Nevada, you do not file a state income tax return to the state itself.

However, you still owe federal income tax to the IRS. Nevada's lack of a state income tax does not change your federal obligations. You will still file a federal return each year if your income exceeds the threshold set by the IRS.

The other states with no income tax are Alaska, Florida, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes only dividend and interest income, not wages. If you move to Nevada from a state that has income tax, or move away from Nevada to a state that does, your tax situation will change.

Key Takeaways

  • Nevada residents pay no state income tax on wages, salaries, investment income, or retirement distributions.
  • You still owe federal income tax and must file a federal return with the IRS if your income meets the threshold.
  • Nevada funds state services through sales tax, property tax, and other sources instead of income tax.
  • If you earned income in another state before moving to Nevada, you may owe that state's income tax for the months you lived there.

What Nevada taxes instead of income

Nevada makes up the revenue it does not collect from income tax through other taxes. The state has a sales tax of 6.85 percent, though counties can add local sales tax on top of that, bringing the total to between 7.375 and 8.375 percent depending on where you shop. You pay this tax when you buy goods and services.

Nevada also collects property tax on real estate and personal property. Property tax rates vary by county and by what you own. If you own a home or rent an apartment, your landlord's property tax costs may be reflected in your rent.

The state also taxes gaming revenue, which is substantial in Nevada, and collects business taxes, fuel taxes, and other fees. These sources fund schools, roads, law enforcement, and other state services.

How moving to or from Nevada affects your taxes

If you move to Nevada from another state during the year, you will owe income tax to your previous state only for the months you lived there. For example, if you lived in California from January through June and moved to Nevada in July, you owe California income tax for January through June but not for July through December.

Your previous state will want proof that you left. You may need to file a part-year resident return in that state. The IRS will not double-tax you — if you paid income tax to another state, you can claim a credit on your federal return to avoid paying federal tax on the same income twice.

If you move away from Nevada to a state with income tax, you will owe that state's income tax starting the month you move. You will file a part-year resident return in Nevada for the months you lived there, though since Nevada has no income tax, this is usually just a formality or not required at all. Check with the state you are moving to about when your tax obligation begins.

Retirement income and Nevada taxes

Nevada does not tax retirement income, including distributions from 401(k)s, IRAs, pensions, or Social Security. This is one reason some people choose to retire in Nevada. If you receive a pension from a previous employer or withdraw money from a retirement account, Nevada will not tax that money.

You will still owe federal income tax on most retirement distributions. The IRS taxes traditional 401(k) and IRA withdrawals as ordinary income. Roth IRA withdrawals are not taxed federally if you meet certain conditions. Social Security benefits are taxed federally only if your total income exceeds a certain threshold, but Nevada adds no state tax on top.

If you are receiving retirement income and considering moving to Nevada, the lack of state income tax can make a real difference in your take-home money. However, factor in Nevada's sales tax and property tax when comparing your total tax burden to other states.

Federal taxes you still owe in Nevada

Even though Nevada has no state income tax, you must still file a federal income tax return with the IRS if your income exceeds the threshold. For 2024, that threshold is $14,600 for a single person under 65 and $29,200 for a married couple filing jointly under 65. The threshold is higher if you are 65 or older.

You will use the same federal forms — Form 1040 and any schedules that explore to your situation — whether you live in Nevada or any other state. Your federal tax rate and the deductions and credits you can claim do not change because you live in Nevada.

If you are self-employed, you also owe self-employment tax to the federal government, which funds Social Security and Medicare. Nevada does not have a self-employment tax, but the federal government does, and it applies to all self-employed people regardless of where they live.

Other Nevada taxes that affect residents

Nevada has a modified business and occupation tax that applies to certain businesses. If you own a business, you may owe this tax depending on your industry and revenue. The tax is relatively low compared to income tax in other states, which is one reason Nevada attracts businesses.

The state also taxes gambling winnings. If you win money at a casino or through other gambling, Nevada and the federal government both tax those winnings. Casinos report large wins to the IRS, and you will receive a Form W-2G documenting the amount.

Nevada has no inheritance tax or estate tax, which means money you leave to heirs is not taxed by the state. The federal government does have an estate tax, but it applies only to very large estates — $13.61 million or more in 2024 — so most people do not owe it.

Frequently Asked Questions

Do I have to file a Nevada state income tax return?

No. Nevada has no state income tax, so you do not file a state income tax return to Nevada. You still file a federal return with the IRS if your income meets the federal threshold. Some states require part-year residents to file a return even with no income tax, so check Nevada's requirements if you moved there partway through the year.

If I work in California but live in Nevada, do I owe California income tax?

Yes. California taxes income earned within the state, regardless of where you live. You will owe California income tax on your wages even though you live in Nevada. You may be able to claim a credit on your federal return to avoid double taxation, but you still owe California. Some states have reciprocal agreements that change this; check with both states about your specific situation.

Does Nevada tax Social Security or retirement distributions?

No. Nevada does not tax Social Security benefits, pension distributions, or withdrawals from retirement accounts like 401(k)s and IRAs. You will still owe federal income tax on most of these sources, but Nevada adds no state tax. This is a significant advantage for retirees living in Nevada.

What if I moved to Nevada partway through the year?

You owe income tax to your previous state only for the months you lived there. File a part-year resident return in that state for January through the month you left. Nevada does not require a state income tax return, but you still owe federal taxes for the full year. The IRS will not tax the same income twice if you paid another state's income tax.

Are there any other taxes I should know about in Nevada?

Yes. Nevada has a 6.85 percent state sales tax plus local sales tax, property tax on real estate, and taxes on gambling winnings. If you own a business, you may owe the modified business and occupation tax. These taxes fund state services that income tax funds in other states, so your total tax burden depends on your spending and property ownership, not just your income.