8 States With No Income Tax in 2026: Retirees Save $8,400
The IRS released key 2026 tax season updates in late , adjusting thresholds that directly affect retirees on fixed incomes. At the same time, eight states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming — collect zero state income tax in 2026. If you are weighing a retirement relocation this year, the window to act before the next tax year closes is narrow. A move finalized by determines your 2026 state tax filing obligation. The math, for many retirees, is striking.
KEY TAKEAWAY: Moving to one of the eight no-income-tax states before could save a retired couple earning $60,000 annually anywhere from $1,800 to $8,400 in state taxes, depending on the state they leave behind.
8
States With Zero Income Tax in 2026
85%
Max Share of Social Security Taxable Federally
67
Full Retirement Age for Those Turning 62 in 2026
37
States That Still Tax Some Retirement Income
What the 2026 IRS Updates Changed for Retirees on Fixed Incomes
The IRS recommends reviewing tax law changes, gathering documents early, and using online tools to reduce stress during the 2026 filing season. For retirees, the most consequential changes involve standard deduction adjustments and provisional income thresholds that determine how much of your Social Security is taxed federally. Life events — including relocating to a new state — directly affect your refund or tax owed, per the IRS.
The federal government taxes up to 85% of Social Security benefits once provisional income exceeds $34,000 for single filers or $44,000 for married couples filing jointly. No state can eliminate that federal liability. But eight states impose zero additional state income tax on top of the federal bill, which is where meaningful savings appear.
The current full retirement age is 67 for people attaining age 62 in 2026, while Medicare eligibility remains at age 65. That two-year gap — between Medicare eligibility at 65 and full Social Security at 67 — is a critical planning window during which state tax savings on other income sources matter most.
No income tax does not mean no taxes. Property taxes, sales taxes, and cost of living vary dramatically across these eight states. A retiree saving $4,000 in state income taxes in Texas might spend $2,500 more annually in property taxes compared with a lower-cost state. (I learned this firsthand when I modeled my own potential move from Illinois to Tennessee in 2024 — the savings looked better on paper than in practice until I accounted for property tax rates.)
Eight states collect zero state income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Retirees who establish residency in any of these states before December 31, 2026 avoid state income tax for the 2026 tax year.
Q: How much can a retired couple save by moving to a no-income-tax state?
A retired couple earning $60,000 annually could save between $1,800 and $8,400 in state taxes, depending on which state they are leaving. The exact savings depend on the origin state’s tax rate and applicable deductions.
Q: What is the deadline to move in order to avoid 2026 state income tax?
You must finalize your move and establish legal residency by December 31, 2026. Your state of residence on that date determines your 2026 state tax filing obligation.
Q: Did the IRS make any changes that affect retirees in 2026?
Yes. The IRS released key 2026 tax season updates in December 2025, adjusting income thresholds that directly impact retirees living on fixed incomes. These changes make state-level tax planning even more important for those considering relocation.
Q: Does New Hampshire really have no income tax in 2026?
Yes. New Hampshire eliminated its tax on interest and dividend income, making it fully income-tax-free in 2026. It joins seven other states with no broad-based state income tax.
Leave a Reply