Income Tax by State: How Your Location Affects Your Tax Bill (2026)

September 5, 2026 · 5 min read

Where you live significantly impacts how much tax you pay. Nine US states have no income tax at all, while California's top rate hits 13.3%. For a high earner, the difference between living in Texas and California can be $20,000 or more per year in state taxes alone.

States With No Income Tax

Nine states charge no personal income tax: Alaska, Florida, Nevada, New Hampshire (dividends and interest only until 2027), South Dakota, Tennessee, Texas, Washington, and Wyoming. These states fund services through sales taxes, property taxes, or natural resource revenue instead.

Highest Tax States

California tops the list at 13.3% for income over $1 million. Hawaii follows at 11%, New Jersey at 10.75%, Oregon at 9.9%, and Minnesota at 9.85%. New York City residents face a combined state and city rate that can exceed 14%. These rates apply only to income above the threshold — they are marginal rates, not effective rates.

The Total Tax Picture

A no-income-tax state is not automatically cheaper. Texas has no income tax but has high property taxes (1.6-2.5% of home value). Washington has no income tax but has a 6.5% state sales tax (up to 10.5% with local). Tennessee has no income tax but has an 9.75% combined sales tax rate. Compare total tax burden, not just income tax.

Remote Work and Tax Implications

If you work remotely for a company in another state, tax rules get complicated. Some states tax you based on where you work, others based on where your employer is located. A few states have reciprocity agreements. If you moved during the year, you may owe taxes in both states. Consult a tax professional for multi-state situations.

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Also useful: our Salary Calculator for related calculations.