States With No Income Tax in 2026: The Complete Take-Home Pay Guide

Quick Answer: Which states have no income tax?

Nine states charge no individual income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire joined the list fully in 2025 after repealing its interest and dividends tax.

Living in one of these states can save a $75,000 earner roughly $3,000 to $4,500 per year compared to a high-tax state like California. The actual savings depend on property taxes, sales taxes, and cost of living. Use the Paycheck Calculator to model your exact take-home pay in any state.

Which States Have No Income Tax in 2026?

Nine states impose no individual income tax as of 2026. Here is each one, along with its overall tax profile:

• Alaska has no income tax and no state sales tax. It has the lowest overall state and local tax burden in the U.S. at roughly 4.9% of income. Residents also receive the Permanent Fund Dividend (about $1,000 in 2025).
• Florida has no income tax. The state charges a 6% sales tax (up to 8.5% with local additions) and has no estate or inheritance tax. It is one of the most popular relocation destinations in the country.
• Nevada has no income tax. The state sales tax is 6.85% (up to about 8.38% combined), and property taxes are very low at roughly 0.53%. Tourism revenue helps fund state services.
• New Hampshire has no income tax. The state fully repealed its interest and dividends tax effective January 1, 2025, making it completely income-tax-free. There is no state sales tax either. Property taxes, however, average roughly 1.86%, among the highest in the nation.
• South Dakota has no income tax. The 4.2% state sales tax is one of the lower rates among no-income-tax states. Property taxes sit around 1.14%, and cost of living is low overall.
• Tennessee has no income tax. The 7% state sales tax (up to 9.75% combined) is among the highest in the country. Property taxes are very low at about 0.56%, and cost of living is low.
• Texas has no income tax. The 6.25% state sales tax (up to 8.25% combined) is moderate, but property taxes are high at roughly 1.60%, well above the national average. There is no estate tax.
• Washington has no income tax on wages and salaries. The 6.5% state sales tax (up to 10.4% combined) is steep. The state also imposes a 7% capital gains tax on long-term gains above a $278,000 standard deduction (adjusted annually for inflation), with a higher rate of 9.9% on gains above $1 million. Washington has the highest estate tax rate in the nation at 35%.
• Wyoming has no income tax. The 4% state sales tax (up to about 6% combined) is low, and property taxes are very low at roughly 0.55%. Cost of living is low, and it is the smallest state by population.

These nine states include three of the five most populous states (Florida, Texas, and Washington) and account for a large share of the country's population growth in recent years. Florida gained 819,000 net residents and Texas gained 656,000, according to recent Census Bureau data.

How Much More Take-Home Pay Do You Actually Keep?

The easiest way to see the impact is to compare real numbers. Below is what a single filer keeps in additional take-home pay by living in a no-income-tax state instead of a state with income tax, at four salary levels:

Annual state income tax savings

• $50,000 salary: Save roughly $1,500 to $2,300/year vs. California, $1,800 to $2,500/year vs. New York
• $75,000 salary: Save roughly $3,000 to $4,500/year vs. California, $3,200 to $3,900/year vs. New York
• $100,000 salary: Save roughly $3,500 to $6,500/year vs. California, $4,500 to $5,800/year vs. New York
• $150,000 salary: Save roughly $8,000 to $12,000/year vs. California, $7,500 to $10,000/year vs. New York

On a biweekly paycheck, that $3,000 to $4,500 annual savings at the $75,000 level works out to roughly $115 to $173 more per paycheck. At higher incomes, the per-paycheck difference grows fast.

These figures reflect state income tax alone. Federal income tax, Social Security (6.2%), and Medicare (1.45%) apply in every state. Use the Paycheck Calculator to model your exact salary in any of the 50 states and see the per-paycheck difference side by side.

Why higher earners save more

States with income taxes use graduated brackets. As your income rises, more of it falls into higher tax brackets. A $150,000 earner in California pays a higher effective state tax rate than a $50,000 earner. So the dollar savings from moving to a no-income-tax state grow disproportionately with income.

The Hidden Costs: Why No Income Tax Does Not Mean Low Taxes

States that skip income tax still need revenue. They collect it through other channels, and those costs can quietly offset your income tax savings.

Property taxes

No-income-tax states have property taxes that are 8 to 12% above the national average, according to the Center on Budget and Policy Priorities. Texas is the clearest example: with an average effective property tax rate of about 1.60%, a homeowner with a $350,000 house pays roughly $5,600 per year in property taxes. In New Hampshire, the rate is even higher at 1.86%, or $6,510 annually on the same home.

Compare that to the national average effective rate of about 1.1%, which would cost $3,850 on a $350,000 home. If you are buying a house, higher property taxes can eat up a large portion of your income tax savings.

Sales taxes

No-income-tax states also lean heavily on sales taxes. Their rates run 18 to 21% above the national average. Tennessee and Washington stand out: Tennessee's combined state and local rate can reach 9.75%, and Washington's can hit 10.4%. On $30,000 of annual taxable spending, a 9.75% rate costs you $2,925 in sales tax.

Alaska and New Hampshire are exceptions. Neither charges a state sales tax, which makes them low-tax states by most measures.

The regressive tax problem

Income taxes are progressive: the more you earn, the higher the rate. Sales and property taxes are not. They take a larger share of income from lower earners. Data from the Institute on Taxation and Economic Policy shows that in Washington, the bottom 20% of earners pay roughly 13.8% of their income in state and local taxes, while the top 1% pay about 4.1%.

This means no-income-tax states can actually be more expensive for lower-income residents than states with a progressive income tax. The benefit of zero income tax scales with income: the more you earn, the more you save.

Cost of living varies a lot

Wyoming and South Dakota have low costs of living across the board. Florida and Texas are affordable outside major metros but expensive in Miami, Austin, and other hot markets. Washington's housing costs around Seattle rival California's. The state's tax advantage disappears fast when your rent is $2,500 a month higher than it would be in Nashville.

States Racing to Join the No-Income-Tax Club

More states are lowering or eliminating their income taxes. Since 2021, 26 states have cut individual income tax rates, and the pace is picking up.

States on a path to zero

• Mississippi is on a legislated path toward full elimination of its income tax. The rate dropped to 4% in 2026 (down from 4.4%) and continues to phase down.
• Iowa has been on a multi-year reduction schedule, bringing its rate down from its former double-digit top bracket.
• Arkansas and North Carolina are also reducing rates on set timelines, with some lawmakers pushing for full elimination.

2026 rate cuts

Nine states reduced individual income tax rates effective January 1, 2026: Georgia, Indiana, Kentucky, Mississippi, Montana, Nebraska, North Carolina, Ohio, and Oklahoma. If you live in one of these states, your 2026 take-home pay is already higher than last year.

Population is following the tax cuts

Migration data from the Tax Foundation and U.S. Census Bureau shows that people are moving to lower-tax states. Florida and Texas lead with 819,000 and 656,000 net residents gained respectively. States without income tax keep gaining population, which in turn strengthens their tax base and makes the no-income-tax model more sustainable.

For workers who have flexibility in where they live, this trend is worth watching. A state that still has income tax today might not in five years, and moving before the full phase-out means you benefit from each year's rate cuts along the way.

Who Benefits Most from Living in a No-Income-Tax State?

Zero income tax helps everyone, but the savings are not distributed equally. Your income level, employment type, and life stage all affect how much you actually keep.

High earners ($150,000+)

This group saves the most in absolute dollars. A $200,000 earner moving from California to Florida can save $10,000 to $15,000 per year in state income tax alone. At $500,000 or above, the savings can exceed $30,000 annually. For high-income professionals with location flexibility, this is often the single biggest financial lever available.

Retirees

Retirement income, including pensions, 401(k) withdrawals, and Social Security benefits, is not taxed at the state level in no-income-tax states. Florida and Tennessee are popular retirement destinations because they combine zero income tax with relatively low property taxes and a moderate cost of living. Retirees on fixed incomes benefit from keeping every dollar of their distributions.

Remote workers

If your employer allows you to work from anywhere, your state of residence determines your state tax liability. A software engineer earning $180,000 while working remotely from Wyoming instead of California saves roughly $12,000 per year without changing jobs. Remote work has turned state tax policy into a real differentiator for workers who can choose where they live.

Self-employed and business owners

Pass-through business income (sole proprietorships, LLCs, S-corps) is taxed as personal income. In a no-income-tax state, none of that income faces state-level taxation. For a business owner netting $300,000 per year, the savings compared to a high-tax state can exceed $20,000 annually.

Who benefits least

Not everyone comes out ahead. Renters do not directly pay property tax, but higher property taxes are baked into rental prices. Lower-income earners may see their income tax savings wiped out by higher sales taxes on everyday purchases. And homebuyers in high-property-tax states like Texas or New Hampshire can end up paying more in total taxes than they would in a state with moderate income and property taxes.

The right question is not "does this state have income tax?" but "what is my total tax burden here?" The Paycheck Calculator helps answer the first part. For the full picture, factor in your housing costs, spending patterns, and any special taxes that apply to your situation.

Washington's Capital Gains Tax: What You Need to Know

Washington deserves a closer look because "no income tax" comes with a big asterisk for investors and high earners.

Since 2022, Washington has imposed a 7% tax on long-term capital gains exceeding a $278,000 standard deduction (adjusted annually for inflation). Beginning with the 2025 tax year, a tiered rate structure applies: gains up to $1 million are taxed at 7%, while gains above $1 million are taxed at 9.9% (the base 7% plus an additional 2.9%).

Who does this affect?

The capital gains tax applies to the sale of stocks, bonds, and other capital assets, but not real estate. It does not affect wages or salaries. For most W-2 employees, Washington remains a true no-income-tax state. For founders, executives with equity compensation, active investors, and anyone selling a business, though, the capital gains tax is a real cost.

Washington's other taxes

Washington also has the highest estate tax rate in the nation at 35%, applied to estates above a $3,076,000 threshold (for 2026). Combined state and local sales tax rates can reach 10.4%, the highest among no-income-tax states. The average combined sales tax rate across the state is 9.47%.

For wage earners, Washington is still one of the best states for take-home pay. For investors and business owners with large capital gains, the picture is more complicated. Run the numbers for your specific situation before assuming Washington is tax-free.

Take-Home Pay Examples: No-Income-Tax States vs. High-Tax States

These examples use 2026 federal and state tax rates for a single filer with no dependents and no pre-tax deductions, paid biweekly (26 pay periods). They show state income tax impact only; federal taxes are identical in all states.

Frequently Asked Questions

Tips for Evaluating No-Income-Tax States

• Compare total tax burden, not just income tax. A state with no income tax can still be expensive if property and sales taxes are high. Look at your full tax picture: income, property, sales, and any special taxes like capital gains or estate taxes.
• Model your paycheck in both states before deciding. Use the Paycheck Calculator to run your salary in your current state and your target state side by side. The per-paycheck difference shows your direct income tax savings.
• Factor in housing costs. Property taxes in Texas (1.60%) and New Hampshire (1.86%) can offset thousands of dollars in income tax savings. If you are buying a home, estimate your annual property tax bill and subtract it from your projected savings.
• Check whether your employer adjusts pay by location. Some companies reduce salaries when remote employees move to lower-cost areas. A 10% pay cut plus a 5% tax savings is a net loss. Confirm your employer's geographic pay policy before relocating.
• Consider your spending patterns. If you spend heavily on taxable goods, a state with a high sales tax (Tennessee at 9.75%, Washington at 10.4%) will eat into your income tax savings. If most of your spending goes to rent, groceries, or savings, the sales tax impact is smaller.
• Think long term if you are nearing retirement. No-income-tax states do not tax pensions, 401(k) withdrawals, or Social Security at the state level. Relocating before retirement means you also benefit during your working years. Florida, Tennessee, and Wyoming are strong options for both current earners and future retirees.

References

• Tax Foundation — 2026 State Income Tax Rates and Brackets — Comprehensive table of all 50 state income tax rates and bracket structures for the 2026 tax year.
• CBPP — Without A State Income Tax, Other Taxes Are Higher — Nonpartisan analysis showing that no-income-tax states have property taxes 8-12% and sales taxes 18-21% above the national average.
• ITEP — Who Pays? 7th Edition — Authoritative data on the regressive nature of state and local tax systems, with state-by-state effective tax rates by income quintile.
• WalletHub — Tax Burden by State in 2026 — Overall tax burden rankings combining income, property, and sales/excise taxes as a percentage of income for all 50 states.
• Tax Foundation — Americans Moving to Low-Tax States — Migration data showing population flows from high-tax to low-tax states, including net gains for Florida and Texas.
• CBS News — 9 States Cutting Individual Income Taxes in 2026 — Reporting on the nine states that reduced individual income tax rates effective January 1, 2026.