Tax Guides
No-Income-Tax States in 2026: What a ~6% Take-Home Advantage Is Actually Worth
The Nine States That Don't Tax Your Wages
Eight states plus the District of Columbia's neighbor have no state income tax on wages in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. (New Hampshire taxes only interest and dividends, so W-2 wages are effectively untaxed there too.)
Everyone knows these states exist. What's less understood is how much the absence of a state income tax is actually worth in real dollars — and that gross wages partially adjust down to compensate. This guide runs the actual 2026 tax math on the same jobs in no-tax vs. high-tax states.
The Same Job, Different States: Registered Nurses
Registered nursing is one of the most evenly distributed occupations in the country — there are RNs in every county. Here's what the same job pays after 2026 taxes (single filer, standard deduction, no pre-tax contributions):
| State | State income tax | Gross median | Take-home | % kept |
|---|---|---|---|---|
| Texas | None | $84,349 | $68,170 | 81% |
| Mississippi | Yes | $64,552 | $50,820 | 79% |
| California | Yes | $107,588 | $79,139 | 74% |
Two takeaways. First, the no-tax state (Texas) keeps 81% of gross — the best retention in this group. Second, California's gross premium looks massive on paper ($107,588 vs. $84,349), but after state taxes the take-home gap shrinks to roughly $11,000, not $23,000.
Software Developers: The 76% Club
| State | State income tax | Gross median | Take-home | % kept |
|---|---|---|---|---|
| Washington | None | $156,079 | $117,946 | 76% |
| Tennessee | None | $116,398 | $90,716 | 78% |
| California | Yes | $165,338 | $116,008 | 70% |
| New York | Yes | $158,724 | ~$112,000 | 71% |
The headline: a Washington dev makes $9,259 less gross than a California dev but takes home $1,938 more. The state income tax line alone is worth ~$8-10K a year at these income levels.
The ~6% Rule
Across the occupations we track, the pattern is remarkably consistent:
- No-income-tax states: workers keep 76–81% of gross
- High-tax states (CA, NY, OR, HI): workers keep 70–74% of gross
The difference is roughly 6 percentage points. On a $100,000 salary that's a $5,000–$7,000 per yearswing — every year, for as long as you live there. On a $150K salary it's $8-10K. That's not pocket change; over a 10-year career it compounds to six figures.
The Catch: Other Taxes Move In
No state income tax is not the same as no taxes. The classic counterweights:
- Property taxes: Texas has the highest effective property tax rates in the country (~1.7-1.8% of home value) — which largely cancels the income tax win for homeowners.
- Sales taxes: Washington and Tennessee have high combined sales tax rates (9-10% in many cities).
- Wages adjust down: as shown above, gross salaries in no-tax states run below high-tax hubs because cost of labor is lower.
The honest summary: a no-income-tax state is worth about 6% of your gross in take-home, but renters capture more of that benefit than homeowners, and you give part of it back in sales tax on daily spending.
Frequently Asked Questions
Which states have no income tax in 2026?
Alaska, Florida, Nevada, New Hampshire (W-2 wages only), South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income tax on wages in 2026.
Is it worth moving to a no-income-tax state?
For the tax savings alone, it's worth roughly 6% of gross — $5-7K on a $100K salary. But property taxes, sales taxes, and wage adjustments reduce the benefit, and moving for taxes alone is usually a weak reason versus moving for a job, family, or cost of living. Run the full comparison for your situation first.
Do no-income-tax states pay less?
Often, yes. Wages track regional cost of labor, so Texas and Tennessee medians run below California and New York. The no-tax states win on retention percentage; the high-tax states win on gross. The net pay comparison is where the real answer lives.
Compare Your Own Take-Home, State by State
Run the same salary through every state and province in one place. The calculator shows gross and net side by side for all 50 US states and 13 Canadian provinces, with 2026 IRS and CRA rates built in.
Compare Take-Home Pay by State