Part of the Quarterly Estimated Taxes guide.
Everything in the main guide is federal. This is the question that trips up freelancers who assume one payment covers everything: in most states, it doesn’t.
Myth: “My State Taxes Are Included in My Federal Payment”
This isn’t true for the large majority of freelancers. The IRS and your state’s tax agency are separate taxing authorities with separate accounts, separate forms, and often separate deadlines. A federal estimated payment made through IRS Direct Pay or EFTPS does not touch your state obligation at all — that has to be paid separately, to a different agency, using that state’s own payment system.
The States Where This Doesn’t Apply
Nine states have no state income tax, which means no state estimated tax payments at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live and work in one of these, the federal guide in this pillar is genuinely the whole picture for you — with one asterisk: Washington does levy a separate tax on long-term capital gains above a high threshold, even though it has no tax on ordinary wages or freelance income. This won’t affect most freelancers, but if you’re a Washington resident selling significant stock or business assets in a given year, it’s worth checking whether that specific tax creates a filing obligation — check the Washington Department of Revenue directly for the current threshold, since it adjusts periodically.
Everyone else — the other 41 states plus DC — generally has its own estimated tax system that runs alongside the federal one, and it needs its own calculation. And state isn’t necessarily the last layer, either: freelancers in cities like New York City, Philadelphia, and parts of Ohio and Michigan can face a third layer of local or municipal income tax — with its own separate withholding or estimated payment system sitting entirely outside both the federal and state setups covered here. If you work in one of these cities, check your city’s specific requirements in addition to state and federal.
What’s Actually Different at the State Level
Separate deadlines and structures. Many states mirror the federal quarterly dates, but don’t assume yours does — some states use different due dates, different quarter groupings, or an entirely different payment structure. California is the clearest example of why this matters: instead of the federal system’s flat 25% per quarter, California requires an uneven, front-loaded schedule — 30% due April 15, 40% due June 15, 0% due September 15, and the remaining 30% due January 15. A California freelancer who assumes the state mirrors the federal calendar and sends a flat 25% each quarter has underpaid by 15% by June, and will face an automatic state underpayment penalty — even though they technically paid something on every date they thought mattered.
Separate safe harbor rules. The federal 90% current-year / 100–110% prior-year safe harbor structure covered in the main guide is a federal rule. States are not required to use the same thresholds, and many don’t — a state’s safe harbor percentage, income threshold for the higher tier, or even whether a safe harbor exists at all can differ meaningfully from the federal version.
Separate payment systems. You’ll typically pay through your state’s Department of Revenue website, not through the IRS’s Direct Pay or EFTPS systems — these are entirely different portals with their own account setup.
Why This Actually Costs People Money
The real-world failure mode isn’t usually “I forgot state taxes exist” — it’s assuming that paying the federal safe harbor amount automatically means the state obligation is handled too, since they’re often calculated and paid around the same time of year. They’re not linked. You can be perfectly compliant federally and still owe a state underpayment penalty, calculated entirely separately, for the exact same tax year.
What to Actually Do
- Confirm whether your state has an income tax at all — if you’re in one of the nine states above, this entire section doesn’t apply to you
- Find your state’s specific safe harbor rule — check your state Department of Revenue’s website directly rather than assuming it mirrors the federal 90%/100%/110% structure
- Confirm your state’s due dates — don’t assume they match the federal calendar exactly
- Set up separate tracking — treat the state obligation as its own line item with its own calculation, not a rider on the federal number
- Adjust your “set aside” percentage — if you’re setting aside a percentage of every payment for taxes, that percentage needs to account for both federal and state liability combined, not just federal
A Note on the 25–35% Guideline
Many freelancers use a rule of thumb of setting aside somewhere between 25% and 35% of every payment received into a dedicated tax savings account. Where you land in that range should reflect your total federal-plus-state liability, not federal alone — someone in a state with no income tax will reasonably sit lower in that range than someone in a state with a meaningful income tax rate on top of federal.
Sources: State-by-state income tax status (no-income-tax states); general state estimated tax payment structures; note that state safe harbor rules, deadlines, and thresholds vary by state and should be confirmed directly with each state’s Department of Revenue.
This article is educational content, not individualized tax or legal advice. Consult a qualified professional about your specific situation, including your specific state’s rules.