If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2014, see Frozen deposits under How To Report Interest Income in chapter 1 of Publication 550, for information about reporting this interest income exclusion on your tax return.
What are the most income tax-friendly states for retirees? That would be the seven states â Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming â that donât tax personal income; and the two states â New Hampshire and Tennessee â that collect income tax only on interest and dividend income.
Ten states with the lowest personal income tax rates. Tennessee and New Hampshire limit their tax to interest and dividend income, not income from wages. Among the states that tax income, Pennsylvania's 3.07 percent flat tax ranks the Keystone State as the tenth lowest in the nation, according to the FTA's 2015 list. Low personal income tax rates can be misleading; a lack of exemptions and deductions can raise the effective rate you pay.