Nine US states charge no state income tax on wages, which can significantly increase your take-home pay. If you're considering relocating or comparing job offers across states, understanding which states have no income tax is crucial for your financial planning.
States With No Income Tax
| State | Notes |
|---|---|
| Alaska | No state income tax on wages or salary income. |
| Florida | No state income tax on wages or salary income. |
| Nevada | No state income tax on wages or salary income. |
| New Hampshire | NH taxes interest and dividends only at 3% (being phased out, 0% for 2026) |
| South Dakota | No state income tax on wages or salary income. |
| Tennessee | No state income tax on wages or salary income. |
| Texas | No state income tax on wages or salary income. |
| Washington | WA has a 7% capital gains tax on gains over $270,000 |
| Wyoming | No state income tax on wages or salary income. |
How Much Can You Save?
The savings from living in a no-income-tax state depend on your income level. Here's a comparison of take-home pay for a $100,000 salary:
| State | State Tax | Take-Home Pay | Savings vs. CA |
|---|---|---|---|
| Texas | $0 | $78,736 | +$5,438 |
| California | $5,438 | $73,298 | $0 |
| New York | $5,214 | $73,522 | +$224 |
| Florida | $0 | $78,736 | +$5,438 |
| Washington | $0 | $78,736 | +$5,438 |
| Illinois | $4,813 | $73,923 | +$625 |
| Pennsylvania | $3,070 | $75,666 | +$2,368 |
| Ohio | $2,030 | $76,706 | +$3,408 |
| Tennessee | $0 | $78,736 | +$5,438 |
| Nevada | $0 | $78,736 | +$5,438 |
Important Considerations
While no state income tax is attractive, consider these factors before relocating:
- Sales tax: Many no-income-tax states have higher sales taxes. Texas has a combined state and local rate averaging 8.2%, and Tennessee's averages 9.55%.
- Property tax: Texas has some of the highest property taxes in the nation, averaging about 1.7% of home value, which partially offsets the income tax savings.
- Cost of living: Some no-tax states like Washington and Nevada have high costs of living in major metro areas.
- Other taxes: Washington taxes capital gains at 7% on gains over $270,000. New Hampshire previously taxed interest and dividends.