Get help with crypto tax by state comparison. 32 years resolving IRS problems. Free consultation from a crypto tax attorney.
Federal taxes on crypto get all the attention, but state taxes can add 10% or more to your bill. If you are dealing with crypto tax by state comparison, understanding your state obligations is critical.
States With Income Tax on Crypto
Most states that impose income tax treat crypto gains the same as the federal government - as capital gains subject to state income tax. California, New York, and New Jersey have some of the highest rates, adding 9-13% on top of federal taxes. A taxpayer in New York City can face a combined federal, state, and city rate approaching 50% on short-term crypto gains.
States With No Income Tax
Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Crypto traders in these states avoid state-level tax on their gains entirely. This is one reason Florida and Texas have become popular destinations for crypto businesses and traders.
Residency and Nexus Issues
If you moved between states during a tax year, your crypto gains may be apportioned between the states based on residency periods. If you trade crypto in a state where you are not a resident, nexus issues may arise. State tax law is complex, and the rules vary significantly by jurisdiction.
State-Level Resolution
If you owe state taxes on crypto in addition to federal taxes, many states have their own resolution programs including installment agreements and settlement options. A tax attorney licensed in your state can address both federal and state obligations simultaneously.