Moving States? A Guide to State Income Tax Differences

When planning a relocation, the tax environment of your new destination can make a massive difference in your net disposable income. In this article, we outline the differences between zero-tax states, flat-tax states, and progressive states.

1. States with No Income Tax

As of 2026, there are nine states with no wage income taxes:

• Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

If you earn $100,000 in Texas or Florida, you pay $0.00 in state income taxes. However, keep in mind these states often compensate for the lack of income tax with higher property taxes or sales taxes.

2. Flat Income Tax States

Flat tax states levy a single, uniform tax percentage on all wage earners, regardless of how much they earn. Examples include Illinois (4.95%), North Carolina (4.50%), and Pennsylvania (3.07%). This system is simple but does not offer tax reduction brackets for lower earners.

3. Progressive Income Tax States

Most states use a progressive system, similar to the federal government. Higher brackets of income face higher tax percentages. California has the highest top bracket at 13.3% (including the Mental Health Services tax on incomes over $1,000,000). New York has a top rate of 10.9%.