Moving can cut your state income tax to zero: eight states levy no individual income tax in 2026, while top rates elsewhere reach 13.3% in California. But the rate is only part of it. What you actually save depends on when your residency legally changes, what your old state can still tax, and the property, sales and estate taxes in your new state.
Where the rates stand in 2026
The eight states with no individual income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Washington taxes only capital gains: 7% on long-term gains above a yearly deduction, which was $278,000 for 2025.
A top rate applies only to income above the top bracket, so your own saving is usually smaller than the gap in top rates. Work it out on last year’s return.
Residency is about facts, not a form
States look at two things.
Domicile is the place you intend as your permanent home, the place you return to after being away. You have only one. New York’s guidance is typical: your domicile doesn’t change until you can show you’ve abandoned the old one and set up a new one. Moving your driver’s license, voter registration, doctors, bank and the things you care about most is how people show it.
Statutory residency is a day count. New York taxes you as a resident, even if your domicile is elsewhere, if you keep a permanent place of abode in the state for substantially all of the year and spend 184 days or more there. Any part of a day counts as a day. Keeping your old home and visiting often is how people moving out of high-tax states end up taxed as residents of both. Keep a log of where you are each day for the first few years.
In the year you move, you usually file part-year returns in both states, each taxing the income from its part of the year.
What your old state can still tax
Work done there. States tax nonresidents on income from sources in the state. In New York that includes earnings from work done in the state and income from property there. If your job is based at a New York office and you work remotely from another state, New York counts those days as New York workdays unless your employer has set up a real office where you are.
Property you keep. Rent from your old home stays taxable in the state where the home is.
Not your retirement income. Federal law bars a state from taxing nonresidents on retirement income, including payments from 401(k)s, IRAs, pensions, governmental plans and 457 plans. A retiree who moves away takes that income out of the old state’s reach.
Double tax is usually avoided. When two states tax the same income, the state where you live typically gives a credit for tax paid to the other. Check the credit works the way you expect before a large bonus or sale.
Equity pay and bonuses earned while you lived in the old state are where surprises happen. Ask a CPA how your old state treats stock that vested, or a bonus that was earned, before the move.
Beyond the income tax
- Property and sales taxes. States without an income tax raise money elsewhere. Compare the property tax on the home you’d actually buy and the sales tax on what you actually spend.
- Estate and inheritance taxes. Twelve states and the District of Columbia have their own estate tax, and five charge an inheritance tax on heirs. Your domicile at death, and where you own real estate, decide which ones apply. Our guide to inheritance covers both.
- Federal itemizing. For 2026 you can deduct state and local taxes up to $40,400, less once income passes $505,000. Moving to a no-income-tax state may mean you take the standard deduction instead, so part of the state tax you save was already being offset federally.
- Selling your old home. You can exclude up to $250,000 of gain, or $500,000 for a married couple, if you owned and lived in it at least two of the five years before the sale.
- Moving costs. They aren’t deductible unless you’re an active-duty member of the Armed Forces or, under the current rules, a member of the intelligence community.
Timing the money around the move
When you’ll realize large income matters. Moving to a lower-tax state, it often pays to wait until you’re clearly a resident of the new state before selling appreciated investments, taking a large bonus or doing a Roth conversion. Under New York’s rules, for example, a nonresident is taxed on New York source income, so gains on stocks you sell after you’ve truly left aren’t New York’s to tax. Moving to a higher-tax state, the logic runs the other way: realize gains before you go.
Common mistakes
- Keeping the old home and too many days there, and staying a resident on paper.
- Working remotely for an office in the old state and assuming the move ended that state’s claim.
- Chasing a zero income tax rate into higher property, sales or estate taxes.
- Selling a large position just before the move instead of just after.
- Forgetting your advisor’s registration. A state-registered advisory firm with no office in your new state generally needs to register there once it has six or more clients who live there in a year. Ask whether yours can keep working with you.
Questions to ask an advisor
| Ask | A good answer includes |
|---|---|
| What would I actually save, in dollars, after the federal effect? | A side-by-side using my last return |
| When does my residency change, and what proves it? | A date, a day-count plan, and a list of ties to move |
| What can my old state still tax? | Wages, equity, rentals and how the credits work |
| Should I sell, convert or take a bonus before or after moving? | A recommendation with the tax in each case |
| How are you paid, and can you work with clients in my new state? | A fee from me only, and yes |
When advice is worth it, and what it costs
A planner earns the fee when the move is tied to retirement, a business sale, equity pay or a large gain, because timing alone can be worth thousands. You’ll also want a CPA or enrolled agent for the part-year returns. Fee-only planners charge a median $300 an hour (middle half $250 to $350) and $2,000 for a one-time plan. Ongoing planning varies by state: the median is $6,000 a year in California, $4,200 in Florida and $3,000 in Texas. Many planners work by video, so you can keep one through the move; our guide to finding a fee-only advisor near you covers when local matters.
How to find one
In the public graph, start with the tax planning and retirement planning specialties, the lists of advisors for retirees and advisors for high earners, or the retirees audience page. You can also browse advisors in your new state. Moving between the US and Canada is a different problem; see cross-border advisor discovery.