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Tennessee tax tidbit: no wage tax

March 29, 2010

Tennessee flag You might have seen Tennessee in the list of states that don't collect an income tax.

That's correct … to a point.

The Volunteer State doesn't tax wage income, but it certainly wants its residents to hand over 6 percent of the interest they earn from bonds and notes and from dividends from stock.

This tax has been around since 1929. It originally was called the Hall income tax for the
senator who sponsored the legislation. 

The state does, however, offer a break for its senior citizens.

If you're older than 65 with total income less than $16,200 as a single taxpayer or are a married couple filing jointly with less than $27,000 income, then you're exempt from the tax.

The rest of you Tennessee taxpayers with taxable unearned income, get your returns into the state by April 15.

Tax trip around the United
States:
This post is part of our series highlighting tax
information from the 50 U.S. states and Washington, D.C.
You can read other state tax blurbs at our Complete menu of tasty state tax tidbits.

The State Tax Departments page provides links to
official state
and District of Columbia revenue Web sites so that you can find out more
about
your home's tax laws and filing requirements.

As
we work
through the 2010 tax season, a different state will be featured each day
as
noted in Don't forget your state taxes! Check back to see
what tax
tidbit we share about your home.

Related posts:

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Here in Ohio, unfortunately, we do have such a tax. And with the looming healthcare changes, it is bound to increase.
    There has to be a better way.

  • Your article about Tennessee income tax is correct…to a point. The first $1250 of interest from bonds, notes, or dividends is exempt from the income tax. I live in TN and haven’t yet hit that number, so have never had to file income taxes with the state.

  • CG, thanks for the elaboration on the interest/dividends tax. Glad to see that some investment income is tax free.
    Kay

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