Exactly nine states levy no broad-based individual income tax in 2026. That number sounds simple. It isn’t. I moved from Illinois to Texas in expecting a windfall. My property tax bill the first year was $9,400 — nearly double what I paid in Chicago. The savings evaporated fast.
If you’re weighing a move for tax reasons — especially in retirement — the headline number matters far less than what’s underneath it. Here’s what I found when I actually ran the math.
The 9 States With No Income Tax in 2026
Read more: Tax Brackets 2026: Federal Income Tax Rates
The nine states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire completed the repeal of its interest and dividends tax in , fully joining the list.
| State | Income Tax | Main Offset |
|---|---|---|
| Alaska | None | High cost of living |
| Florida | None | Property tax, sales tax |
| Nevada | None | Sales tax up to 8.375% |
| New Hampshire | None (as of Jan 2025) | High property tax |
| South Dakota | None | Sales tax, excise taxes |
| Tennessee | None | Sales tax up to 9.75% |
| Texas | None | High property tax |
| Washington | None (on wages) | Capital gains tax (7%) |
| Wyoming | None | Property tax, mineral taxes |
State-by-State: My Take on Each One
Alaska — The Outlier That Pays You
Alaska is the only state that sends residents an annual check — the Permanent Fund Dividend. No income tax, no state sales tax. But groceries in Anchorage run 30–40% higher than the national average. Remote living costs real money. This one only makes sense if you actually want to live there.
Florida — The Retirement Default
Florida’s property taxes and rising insurance costs quietly reduce retirement income for many residents. Homeowners insurance in South Florida now averages over $4,000 per year in many counties — that’s $333 per month just to insure your house. (A colleague of mine retired to Sarasota and her insurance tripled in three years. She didn’t see that coming.) Florida is still a strong choice for retirees, but budget for insurance before you sign anything.
Nevada — Cheap on Paper, Expensive at the Register
Nevada’s combined state and local sales tax reaches 8.375% in some jurisdictions. Buy a $30,000 car in Las Vegas and you’re paying roughly $2,513 in sales tax alone — about four months of a gym membership paid in one transaction. Nevada also taxes gambling winnings at the federal level, which catches many retirees off guard.
New Hampshire — The Newest Member
New Hampshire completed its repeal of the interest and dividends tax in . That’s genuinely good news for retirees living on investment income. The catch: New Hampshire has some of the highest property tax rates in the country. A median-value home can carry a tax bill exceeding $6,000 per year. That’s $500 per month — roughly the cost of a used car payment.
South Dakota — Quiet and Underrated
South Dakota doesn’t get enough credit. Low property taxes, no income tax, no estate tax. The state sales tax is 4.2%, one of the lowest in this group. For retirees on fixed income, South Dakota is genuinely one of the better options on this list. The tradeoff is harsh winters and limited urban amenities.
Tennessee — Watch the Sales Tax
Tennessee’s combined state and local sales tax can reach 9.75% — among the highest in the nation. Groceries are taxed at 4% statewide. A household spending $800 per month on groceries pays an extra $384 per year in sales tax on food alone. That’s not nothing, especially on Social Security income.
Texas — Big Savings, Big Property Bills
Texas is where the income-tax-free dream most visibly collides with reality. Property taxes in Texas are among the highest in the nation and can significantly reduce retirement income. The effective property tax rate in Texas hovers around 1.6%. On a $350,000 home, that’s $5,600 per year — or $467 per month, roughly the cost of a round-trip flight to Europe. High earners moving from California or New York still come out ahead. Middle-income retirees on fixed income need to do the math carefully.
Washington — The Capital Gains Trap
Washington has no income tax on wages. But since , the state imposes a 7% capital gains tax on gains above $262,000 per year. If you’re selling a business, a rental property, or a large stock portfolio, Washington is no longer the free ride it used to be. This catches high-net-worth retirees off guard constantly.
Wyoming — The Best-Kept Secret
Wyoming combines no income tax, low property taxes, and no estate tax. It also has significant mineral extraction revenue that subsidizes state services. For retirees who don’t mind wide-open spaces, Wyoming is arguably the strongest all-around tax environment on this list. The population of the entire state is under 600,000 — smaller than Louisville, Kentucky.
Is It Really Cheaper to Live in a No-Income-Tax State?
Read more: She Found $23,200 in Hidden Debt After Her Husband Died — SNAP Was the Safety Net Nobody Mentioned
This is the question I get most often. The honest answer: it depends entirely on your income type and spending habits.
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