States with No State Income Tax
Nine states levy no state income tax on wages or salaries: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Moving to one of these states means your paychecks avoid state income tax withholding, but you still pay federal income tax, Social Security, Medicare, and possibly higher property or sales taxes that fund state services.
Which nine states have no state income tax in 2026?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming impose no state tax on wage and salary income. New Hampshire taxes interest and dividends above $2,400 (individual) or $4,800 (joint) at 3% through 2024, but this tax is scheduled for full repeal by January 1, 2026.
How do no-income-tax states fund government services?
These states replace income tax revenue with higher consumption taxes, resource extraction fees, or tourism revenue. Texas and Florida rely heavily on sales tax—Texas's combined state and local rate averages 8.2%, while Florida averages 7.0%.
What is the step-by-step process to change your tax residency to a no-income-tax state?
Step 1: Choose your destination state and verify employment or income sources will continue. If you work remotely for an employer in a different state, confirm whether that state will still withhold income tax (some states tax non-residents on income earned for in-state employers).
Step 2: Establish a physical residence. Sign a lease or purchase property, and move your belongings.
Step 3: Update your voter registration, vehicle registration, and bank account addresses to the new state. Register to vote within your new county.
Step 4: Close or minimize ties to your old state. If you maintain a home in your previous state, you risk being treated as a part-year or dual resident.
Step 5: File a part-year resident tax return in your old state for the portion of the year you lived there, and confirm you owe no state tax to the new state. Keep records of your move date—lease agreements, utility hookup dates, and moving receipts—in case your old state audits your residency claim.
Common mistakes: failing to update your driver's license promptly (your old state may argue you remained a resident), keeping a home in the old state without clear documentation of your move, and assuming your employer will automatically stop withholding your old state's tax (you must update your W-4 and state withholding forms).
Talk to a vetted tax pro
Get matched with a tax specialist who handles situations like yours.
Find a tax proTakes about 2 minutes · No obligation
Do you still pay federal income tax if you live in a no-income-tax state?
Yes. Federal income tax applies to all U.S. residents regardless of which state you live in.
How do no-income-tax states compare on total tax burden?
Total tax burden includes income, sales, property, and excise taxes as a percentage of income. According to the Tax Foundation's 2024 analysis, some no-income-tax states rank among the lowest in total burden—Alaska ranks 4th lowest, Wyoming 2nd lowest, South Dakota 3rd lowest—while others land in the middle.
Calculate your personal tax impact by comparing your current state's income tax (check your last year's return, line 16 on Form 1040 Schedule A) against the difference in sales tax (estimate 1–3% of your annual spending on taxable goods), property tax (multiply your likely home value by the effective rate), and any new costs like vehicle registration or toll roads. High earners in states like California (top rate 13.3%) or New York (top rate 10.9%) see the largest savings.
What are the non-tax factors to consider before moving?
Cost of living varies widely among these states. Florida's housing costs have risen sharply—median home prices in Miami and Tampa exceed $400,000 as of 2024—while South Dakota and Wyoming offer median home prices closer to $250,000–$300,000.
Climate ranges from Alaska's sub-arctic winters to Florida's humid subtropical heat. Natural disaster risk includes hurricanes in Florida, wildfires in parts of Washington and Nevada, and winter storms in Wyoming and South Dakota.
FAQ
Do I avoid capital gains tax if I live in a no-income-tax state?
You avoid state capital gains tax on investments, but federal capital gains tax still applies (0%, 15%, or 20% depending on income, plus 3.8% Net Investment Income Tax over $200,000 single or $250,000 joint). Some states, like California or New York, tax capital gains as ordinary income at rates up to 13.3% or 10.9%, so moving to a no-income-tax state before a large sale can save five or six figures.
Can my old state still tax me after I move?
Yes, if you maintain significant ties—owning a home, keeping a driver's license, claiming a homestead exemption, or spending more than 183 days per year there. States like California and New York aggressively audit high earners who claim to have moved.
Will I pay more in sales and property taxes in a no-income-tax state?
It depends on your spending and housing. If you rent and spend modestly, you may come out ahead.
Do Social Security benefits get taxed in no-income-tax states?
No state income tax means your Social Security benefits are not taxed at the state level. However, federal tax on Social Security still applies if your combined income (adjusted gross income plus nontaxable interest plus half of Social Security) exceeds $25,000 (single) or $32,000 (joint).
Talk to a vetted tax pro
Get matched with a tax specialist who handles situations like yours.
Find a tax proTakes about 2 minutes · No obligation
Evaluate a side hustle or career income strategy
A side hustle is paid work performed outside a primary job, often as an employee, contractor, seller, or business owner. Before choosing among side hustle ideas, estimate startup costs, ongoing expenses, time requirements, demand, payment terms, and tax responsibilities. Side hustles from home may still require licenses, insurance, secure technology, recordkeeping, or permission under a lease, HOA rule, or local regulation.
Employment income may also grow through additional responsibilities, a promotion, a job change, or improved skills. When learning how to ask for a raise, document relevant duties, results, market information, and the requested change without assuming approval. Update skills to put on resume using accurate examples, and prepare for common interview topics. Compare gross pay, benefits, commuting costs, schedule, stability, and taxes rather than evaluating an opportunity by headline pay alone.
Common questions
People also search for
- side hustle
- side hustle ideas
- side hustles
- side hustles from home
- what is a side hustle
- side jobs
- how to start a side business
- how to start small business
- how to start a business
- how to ask for a raise
- goal setting
- skills to put on resume
- resume tips
- tax calculator
- calculator tax
- calculator with taxes
- wyoming
- property tax
- states with no income tax
Part of the Money & Debt (incl. Student Loans) cluster.