Moving to a State With No Income Tax: What You Really Save

When people think about moving for money reasons, the first idea is often "move to a state with no income tax." It is a fair idea. State income tax is one of the larger costs for many workers, and in nine states it is zero on wages. But zero on wages is not zero on everything. This guide shows what a move does to take-home pay in real numbers, what you may pay instead, and how to compare two states before you pack.

To run your own numbers, open the state salary comparison calculator. Pick the state you live in and the one you might move to.

Which states do not tax wages

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming do not tax wages. That means that in these states your paycheck loses federal income tax and Social Security and Medicare, but no state income tax. Federal tax and FICA are the same in every state, so the whole difference between two states comes from the state tax.

Two notes. New Hampshire used to tax interest and dividends, but that tax ended after 2024. Washington does not tax wages but does have a capital gains tax on large gains. The other states have their own special taxes too, so "no income tax on wages" is the accurate way to say it.

What a move does to take-home pay

The table shows how much more a single filer keeps in a year after a move, with the same salary, the 2026 federal tax tables and the standard deduction. A plus sign means more money in your pocket.

Three patterns stand out. First, the gain depends on the state you leave. Oregon taxes wages the hardest in this table: a single filer on $90,000 keeps about $7,045 more after a move to Washington. Colorado, with a flat 4.4% rate, taxes the least, so a move to Tennessee gains the least at $90,000. Second, the gain rises with income in every row, because most states tax higher pay at higher rates. California takes $1,649 from a $60,000 salary but $9,720 from a $150,000 one. Third, the Washington row is a little too high, because Washington takes about 1.4% of pay for paid leave and long-term care programs, which are not in this table.

What you may pay instead

States still need money. When they do not tax wages, they often raise it in other ways: sales tax, property tax, fees and taxes on businesses that raise prices. The table shows two of these for the nine states, with median rent for comparison. The numbers come from the Tax Foundation and the Census Bureau’s 2024 American Community Survey and are medians or averages for the whole state. For reference, across the whole country a median home owner paid 0.89% of the home’s value in real estate tax.

Texas, for example, has no tax on wages, but the median home owner pays 1.31% of the home’s value in real estate tax, against 0.71% in California, where Proposition 13 limits how fast a home’s taxed value can rise. A California home costs far more, so the dollar bills are close: the median real estate tax bill is $4,108 in Texas and $5,369 in California. Tennessee has one of the lowest property tax rates (0.45%) and the second-highest average sales tax of any state (9.61%). New Hampshire has no sales tax, but its median real estate tax bill of $6,707 is the second highest in the country, after New Jersey.

Rent and cost of living

Take-home pay is the start of the comparison, not the end. If you rent, median rent is $2,104 a month in California and $1,475 in Texas, according to the same survey. Over a year, the difference in rent is $7,548, which is more than the tax saving on a $60,000 salary. Rent is only one cost. Groceries, gas, insurance, child care and health care vary by place too, and so does pay: a job can pay less in a state with lower costs.

A fair way to compare is to make a short budget for each place. Start with the take-home pay from the calculator, then subtract rent or mortgage, property tax, car and home insurance, and the other costs you know. What is left is what the move is worth.

Taxes follow where you live and where you work

Moving on paper is not the same as moving in practice. Each state has its own rules for who is a resident, and the rules can look at where you sleep, where your family lives and where you keep your home. If you move in the middle of a year, you may be a part-year resident of two states and file in both. Some states also tax income earned inside their borders by people who live somewhere else, and a few states tax remote workers based on where the employer is. If you plan to keep working for an employer in your old state, ask your payroll team how your withholding will change, and check the website of your old state’s tax agency. When the amounts are large, a tax professional is worth paying.

Do not forget local taxes and state payroll programs

Some places have taxes on top of the state tax. New York City and Yonkers tax residents, Philadelphia has a wage tax, many Ohio cities and every Indiana county have local income taxes, and several states take a share of pay for disability or paid family leave programs. Those can narrow or widen the gap. Our paycheck calculator pages for each state list the local taxes we have official rates for.

Frequently asked questions

Is it worth moving to a state with no income tax?

It can be, especially if your income is high and your old state taxes it heavily. A single filer on $150,000 keeps about $9,720 more a year in Texas than in California. But compare the whole budget: rent, property tax, sales tax, insurance and the pay in the new place.

Which state has the lowest taxes overall?

There is no single answer, because the answer changes with your income, whether you rent or own and how you spend. The nine states without a wage tax are the best on income tax alone. A state with a modest income tax and low property tax can be cheaper for a homeowner.

Do I still owe tax to my old state after I move?

You owe tax to a state on income earned there, and in some cases for the part of the year you lived there. Rules differ, so check the tax agency website of your old state.

Does moving to a no-income-tax state change my federal tax?

No. Federal income tax, Social Security and Medicare are the same in every state. The state you live in does change a deduction some people use: you can deduct state and local taxes only if you itemize, and the deduction has a cap, so with no state income tax you may have little to itemize.

Will my salary stay the same if I move?

Not always. Employers in some places pay by location. If your employer lowers your pay for a lower-cost area, compare the new take-home pay with the old one using the "salary needed" figure in the calculator.

What is the best state for a remote worker?

The tax rules are the same for remote workers as for others, with a few differences around which state taxes the pay. Compare take-home pay, housing costs and how fast you can get to a major airport or your office. A state with no wage tax is only one of the factors.

The bottom line

A state with no income tax on wages can raise your take-home pay by thousands of dollars a year, and the gain is larger for higher incomes and for people leaving high-tax states. But taxes are one part of the cost of living. Check property tax, sales tax, rent and the pay you can earn, and check the residency rules of both states before you move. Run the numbers for your own salary, then decide.

Sources

• State Individual Income Tax Rates and Brackets, 2026, Tax Foundation
• State and local sales tax rates, 2026, Tax Foundation
• American Community Survey, 1-year estimates, 2024, U.S. Census Bureau
• Revenue Procedure 2025-32 (2026 inflation adjustments), Internal Revenue Service

Take-home figures are examples worked out with the 2026 federal tax tables, Social Security and Medicare and each state’s 2026 income tax for a single filer with the standard deduction. Rent, home value and real estate tax are 2024 medians for the whole state, and sales tax is the average combined rate on January 1, 2026. Last reviewed October 21, 2026.