Moving To These 9 States Could Add Thousands to Your Salary — Without a Raise
Written by
Laura Beck
Edited by
Molly Sullivan
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Moving to the right state could put thousands of extra dollars in your pocket every year without changing jobs or getting a raise.
Nine states charge zero personal income tax in 2026. That means residents get their paychecks without state government taking a cut. For people relocating from high-tax states like California, the savings add up fast.
The 9 States With No Income Tax
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming charge no personal income tax in 2026.Â
New Hampshire joined the list most recently. The state eliminated its final 3% tax on interest and dividend income effective Jan. 1, 2025. Washington represents a partial exception because it levies a 7% capital gains tax on certain assets for high earners, but charges nothing on regular wages or salaries.
These states need to fund government services somehow. Most offset missing income tax revenue through higher sales taxes, property taxes or industry-specific levies.
Texas and Florida rely heavily on property taxes. Tennessee boasts one of the highest average sales tax rates in the country at 9.55%. Nevada generates substantial revenue from gambling taxes and tourism fees. Alaska taps oil industry revenues.
Wyoming stands out by keeping all taxes relatively low. The state charges no income tax, no corporate tax and no estate or inheritance tax while maintaining a 4% sales tax and low property tax rates.
More Numbers To Consider
A California household earning the median income of $91,905 would save $2,843 per year by moving to a no-income-tax state, according to Yahoo Finance. That calculation only factors in state income tax savings without considering other costs.
The savings grow substantially for higher earners. An engineer in San Francisco with taxable income of $100,000 owes roughly $6,600 to California each year. Moving to Austin, Texas, means paying zero state tax on that same income, according to financial planning firm PlanCorp. A senior engineer earning $200,000 could save close to $17,000 annually by making the same move from California to Texas.Â
California isn’t alone in charging substantial state income tax. The state’s graduated rates range from 1% to 13.3%, according to the Tax Foundation. New York charges up to 10.9%. New Jersey’s top rate hits 10.75%.
The Trade-Offs
No income tax doesn’t automatically mean lower overall costs. Many no-income-tax states compensate through other levies that can significantly affect household budgets.
Texas property taxes run high compared to California. A California family pays an effective property tax rate around 0.75% while Texas charges approximately 1.74%. On a $1.5 million home, that difference equals $14,850 in annual property taxes.
New Hampshire combines no income tax with no sales tax, creating a unique tax profile. However, the state charges some of the highest property tax rates nationwide at 1.93% to make up the revenue difference.
Florida’s housing market has grown increasingly expensive in recent years. High insurance costs for both homes and cars can eat into the income tax savings. Housing affordability ranks low in many Florida metros despite the tax advantages.
The Bottom Line
Moving to one of nine no-income-tax states can potentially save median earners around $3,000 to $5,000 annually while high earners keep tens of thousands more. California, New York and New Jersey residents see the biggest gains by relocating.
The tax savings are real and substantial. But higher property taxes, insurance costs and sales taxes in no-income-tax states can offset some of those gains depending on individual circumstances.
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