States with no income tax in 2026

For tax year 2026, the returns filed in 2027, nine states have no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. The table shows what each of them does tax and links to its own revenue department or legislature, where the facts on this page were checked in October 2026.

Two of the nine used to tax investment income and no longer do. New Hampshire repealed its interest and dividends tax starting with 2025, and Tennessee repealed its Hall tax starting with 2021. Washington is the one to read closely: it taxes long-term capital gains above a large deduction, and a tax on income over $1 million is set to start in 2028.

Washington’s Department of Revenue says the state does not currently have an individual income tax. It does have a capital gains tax, which it treats as an excise tax: 7% on the sale or exchange of long-term capital assets such as stocks, bonds and business interests. Only individuals owe it, only on gains allocated to Washington, and real estate and assets held in certain retirement accounts are exempt.

The tax applies only to gains above a standard deduction, $278,000 for 2025, which the department adjusts for inflation each year. Beginning with 2025, taxable gains over $1 million pay an additional 2.9%, for 9.9% on that portion. The return is due the same day as your federal income tax return.

A broader tax is set for 2028. Senate Bill 6346, passed in 2026, imposes a 9.9% tax on income over $1 million a year beginning January 1, 2028, with the first returns due in April 2029. Initiative Measure No. IP26-645, which would repeal it, is on the November 3, 2026 ballot. For tax year 2026, Washington has no tax on wages.

New Hampshire does not tax wages; its Department of Revenue Administration says the state does not have an income tax on an individual’s reported W-2 wages. It did tax interest and dividends, at 3% for 2024 on residents with more than $2,400 of that income, or $4,800 on a joint return. That tax is repealed for taxable periods beginning after December 31, 2024, so there is no 2025 return and no 2025 estimated payment.

The repeal is not an amnesty. Returns for 2024 and earlier years were still due by their normal dates, with any tax owed, and those years remain open to audit and collection.

Tennessee’s Hall income tax applied only to interest from bonds and notes and dividends from stock. It is repealed for tax periods beginning on or after January 1, 2021, and the Department of Revenue asks people not to file a return for any later year. Tennessee has no state income tax on earned income, so it has no state income tax withholding.

Your federal return stays the same. The IRS says most U.S. citizens or permanent residents who work in the U.S. have to file a tax return, and the income that requires one depends on your filing status, your age and whether someone can claim you as a dependent. The Texas Comptroller puts it plainly: Texans pay federal income taxes but not state or local income taxes.

One federal choice matters more in these states. If you itemize, you can deduct state and local general sales taxes instead of state and local income taxes, but not both. For 2025 returns the total deduction for state and local taxes is limited to $40,000 ($20,000 if married filing separately), reduced when modified adjusted gross income is over $500,000 ($250,000) but not below $10,000 ($5,000).

State payments can still be federal income. Alaska’s 2026 Permanent Fund Dividend is $1,200, and the state says dividends for adults are taxable for federal income tax purposes, with the whole amount reported even if part of it was garnished.

Each of these states funds itself with other taxes. The list below gives each one’s own description of its main taxes, from its revenue department or legislature, with no comparison between states. Which of them you feel depends on what you buy, whether you own property and whether you run a business.

Several tax businesses directly, through a franchise tax, a gross receipts tax or a corporate income tax, even though they do not tax individuals’ wages.

The state you leave can still tax you for the year you move. California’s rules show how: its Franchise Tax Board says a part-year resident pays California tax on all worldwide income received while a resident and on income from California sources while a nonresident. California-source income includes pay for services performed in California, rent from California real property, the sale of California real property and income from a California business, trade or profession.

Some income follows you. The board notes that deferred or equity-based compensation can still be California-source income after you move, and that someone who relocates temporarily for work and plans to return may still be considered a California resident. Part-year residents and nonresidents with a filing requirement file Form 540NR.

Illinois works the same way: a part-year resident files Form IL-1040 and Schedule NR if they earned income from any source while a resident or Illinois-source income while not a resident. Your new state applies its own residency rules. Florida, for example, says filing a declaration of domicile, qualifying for the homestead exemption or registering to vote in Florida can establish residency, while getting a Florida driver’s license only indicates an intent to establish it.

Living in a state with no income tax does not stop other states from taxing what you earn in them. California taxes nonresidents on pay for services performed in California, and New York taxes them on earnings from work performed in New York State.

New York reaches further when your office is there. Its tax department says that if you are a nonresident whose primary office is in New York State, your days telecommuting are considered days worked in the state unless your employer has established a bona fide employer office at your telecommuting location. This is its convenience of the employer test: days worked outside New York count as outside days only when the work is done there out of necessity, not for the employee’s convenience.

So someone who lives in Florida or Texas but is assigned to a New York office can owe New York tax on salary for the days worked from home. New York notes that people who live in one state and work in another typically receive a credit in their home state to avoid double taxation, but a state with no income tax has no tax to set that credit against.