States with no income tax and what J-1 holders pay there
J-1 visa holders working in states with no income tax still file federal 1040-NR but skip state returns. Learn which states, filing rules, and your refund
You’ve landed a summer job or internship in a state that has no income tax — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, or Wyoming. That sounds great, right? No state tax bill. But here’s what you actually need to know: you still file federal taxes, you still owe FICA contributions in most cases, and your refund depends on what was withheld from your paychecks and your residency status under IRS rules. This guide walks you through exactly what states with no income tax mean for a J-1 visa holder, what you still have to pay, and how to file correctly.
Does this sound like you? You’re on a J-1 visa, you got a W-2 from a U.S. employer, and you worked more than 3 months in the U.S. If so, see your real J-1 taxes calculator number in under 2 minutes — no login required, and you only pay if you actually get a refund.
Which U.S. states have no income tax?
Nine states impose no income tax on wages: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you worked in one of these states, you will not owe state income tax on your W-2 earnings, and you generally will not file a state tax return.
However — and this is crucial — no state income tax does not mean no federal tax. You must still file a federal Form 1040-NR (if you’re a nonresident alien) or Form 1040 (if you became a resident alien during your stay), pay federal income tax on your U.S. source income, and in almost all cases, contribute to Social Security and Medicare (FICA withholding). Skipping the federal return because there is no state tax is one of the biggest filing mistakes J-1 holders make.
What does “no state income tax” actually mean for your J-1 taxes?
When a state has no income tax, it means the state government does not collect a tax on wages. You will not see a state tax line on your W-2 in the “state income tax withheld” box, and you will not receive a state refund. Your paycheck will be larger than it would be in a state with income tax, because your employer does not withhold state tax.
But your federal obligations remain unchanged. The IRS still taxes income you earned in the United States, regardless of which state you worked in. Your employer withholds federal income tax from your paycheck, and you must file a federal return to report that income and either pay any balance due or claim a refund of the withheld tax. This applies whether you worked in Alaska or Alabama.
Why your exact tax filing depends on more than just location
Filing in a no-income-tax state sounds simple, but your actual tax bill and form depend on three key factors: your J-1 category, how long you’ve been in the U.S., and your home country’s tax treaty with the United States.
Your J-1 category matters. If you are a J-1 student, you can exclude your physical presence in the U.S. from the Substantial Presence Test for up to 5 calendar years. If you are a J-1 trainee, intern, specialist, camp counselor, or teacher, you can exclude only 2 of the last 6 calendar years (in some cases, 4). Once your exclusion period ends and you meet the Substantial Presence Test, you become a resident alien and must file Form 1040 instead of Form 1040-NR, even if you work in a no-income-tax state.
How long you’ve been here matters. The Substantial Presence Test counts your physical days in the U.S. over three years. If you are in your first year as a J-1 student, you likely do not meet the test and file Form 1040-NR as a nonresident. If you are in your sixth year, you almost certainly do and file Form 1040 as a resident, and you report worldwide income — not just U.S. earnings. The location of your job (no-income-tax state or not) does not override this.
Your home country’s tax treaty may create exemptions. Some countries have income tax treaties with the United States that allow J-1 students or trainees to exclude certain income from taxation. For example, some treaties allow an exemption on scholarship stipends or internship wages below a certain amount. This exemption exists at both the federal and state level, so it matters even in a no-income-tax state if you are trying to figure out whether any withholding was taken in error. In most cases, if this is your first time in J-1 status and your home country has a tax treaty with the U.S., you likely do not owe federal tax on your J-1 earnings — but that depends on your specific category and income amount.
In general, if this is your first time in J-1 status, you are likely a nonresident alien and will file Form 1040-NR. You will not owe federal income tax if your income is below the filing threshold for nonresidents or if you qualify for a treaty exemption. But whether you worked in Texas or Maine, you still must file to claim a refund of any federal withholding or to satisfy the IRS requirement to report your U.S. source income. One of the fastest ways to get your exact number for your J-1 visa taxes is running your W-2 through the calculator and answering questions about your history and visa category.
Where this is easiest to get wrong
Misconception 1: “No state tax, so I don’t file at all.” This is the most common mistake. You must still file federal taxes. Working in a no-income-tax state does not exempt you from the federal return requirement. The federal government taxes income earned within U.S. borders regardless of state. If you earned a W-2 in Alaska and then took it to file, you cannot simply ignore it because Alaska has no income tax.
Misconception 2: “My employer withheld nothing, so I owe nothing.” Withheld tax is not the same as tax owed. If your employer (or you) believed you qualified for a federal exemption under a tax treaty or because of your J-1 student status, they may have withheld zero federal tax. That does not mean you owe zero tax. You still must file Form 1040-NR to report the income. If your income is below the filing threshold, you will owe nothing, but you will likely receive no refund either — there was nothing to refund. If your income is above the threshold and you do owe tax, skipping the return is serious.
Misconception 3: “I’ll pay FICA here and avoid it later.” FICA (Social Security and Medicare) withholding is separate from income tax. Most J-1 nonresident aliens must pay FICA on U.S. wages, even if they are exempt from federal income tax under a treaty. A no-income-tax state does not affect FICA withholding. If FICA was withheld and you believe you should not have been charged, you will need to file the correct form and claim the exemption — but you cannot simply stop paying it by choosing to work in a no-income-tax state.
Frequently Asked Questions
Do I have to file a federal tax return if I worked in a no-income-tax state?
Yes. Working in a state with no income tax does not exempt you from filing a federal return. If you earned a W-2 in any state, you must file Form 1040-NR (if you are a nonresident alien) or Form 1040 (if you are a resident alien) to report that income to the IRS. The state where you worked does not determine your federal filing obligation — your visa status and the IRS Substantial Presence Test do. File your federal return even if you owe no state tax.
Will I get a refund if I worked in a no-income-tax state?
Your refund depends on how much federal tax was withheld from your paychecks, your filing status, your residency status, and any treaty exemptions you qualify for. A no-income-tax state does not automatically mean a refund. If federal tax was withheld and you owe no federal income tax (because your income is below the filing threshold or you qualify for a treaty exemption), you will likely receive a refund of the withheld amount. If no federal tax was withheld, there is no refund to claim. Answer a few quick questions and see your estimated refund.
Do I still pay FICA if I work in a no-income-tax state?
In most cases, yes. FICA (Social Security and Medicare) is a federal payroll tax separate from federal income tax, and it is not affected by whether your state has income tax. If you are a J-1 nonresident alien on a wage W-2, you must generally pay FICA unless your home country has a treaty exemption that applies specifically to FICA. Check your W-2 in boxes 4 and 6 to see if FICA was withheld. If you believe it was withheld in error, you will need to claim the exemption on your tax return with the correct forms and documentation.
What form do I file if I’m a nonresident alien working in a no-income-tax state?
You file Form 1040-NR, U.S. Nonresident Alien Income Tax Return, along with Form 8843 (if required by your visa status). Your residency status under the Substantial Presence Test determines which form you file, not the state where you worked. If you are in your first year as a J-1 student, you will almost certainly file 1040-NR. If you have been in the U.S. longer and meet the Substantial Presence Test, you file Form 1040 as a resident alien instead, regardless of whether you worked in a no-income-tax state.
Can I claim a FICA exemption in a no-income-tax state?
FICA exemptions are determined by your home country’s tax treaty with the United States and your J-1 category, not by the state where you work. If your country has a treaty that exempts J-1 students or trainees from FICA, that exemption applies whether you worked in Alaska or New York. You claim the exemption by filing Form 8288 (if applicable to your situation) or Form 1040-NR with the correct schedules. The no-income-tax state does not create the exemption or prevent you from claiming it — your visa status and country do.
Will I receive a state refund for working in a no-income-tax state?
No. If a state has no income tax, it does not withhold state tax, and it does not issue state refunds. You will not see any state tax on your W-2, and you will not file a state return. Your entire refund (if any) comes from the federal return based on federal income tax withheld. Some no-income-tax states do have other payroll taxes (such as unemployment insurance or disability insurance in specific cases), but these are employer taxes, not income taxes, and do not result in a refund to you.
This is general information, not personalized tax advice. Your exact filing obligations and refund depend on your visa history, J-1 category, home country, and income level. Use the calculator with your own W-2 details to get a personalized estimate, and consult a qualified tax preparer if you have questions about your residency status, exemptions, or the right form to file.
Working in a no-income-tax state simplifies your state taxes but does not change your federal obligations. You still file federal, still pay FICA in most cases, and your refund depends on withholding and your residency status, not your location. Check your specific situation — your J-1 category, how long you’ve been in the U.S., and whether your home country has a tax treaty — then file your federal return correctly to claim any refund you earned. Visit the J1GoTax homepage if you want to explore your complete filing picture.
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