Updated Checked by the Tax-Services.ca editorial team How we check
Eight US states have no tax on personal income in 2026, according to the Tax Foundation’s list: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Washington is the odd one out, since it taxes capital gains only. But for a Canadian the list answers a smaller question than it seems to, because states without income tax don’t switch off your Canadian bill.
Which states have no income tax?
The table follows the Tax Foundation, an American research group, not a government page. New Hampshire is on it because the state repealed its tax on interest and dividends as of 2025. State laws change, so check the state’s own revenue department before you plan around a list from any website.
| State | Note |
|---|---|
| Alaska, Florida, Nevada | No individual income tax |
| New Hampshire | Interest and dividends tax repealed as of 2025 |
| South Dakota, Tennessee, Texas, Wyoming | No individual income tax |
| Washington | Taxes capital gains only: 7%, and 9.9% on gains above $1 million from 2025 |
Forty-two states do tax income. Many snowbirds in Florida or Arizona assume the winter address changes their tax. It doesn’t, as long as the home, the family and the health card stay in Canada.
Does moving there end your Canadian tax?
Not by itself. Canada taxes residents on worldwide income, and the CRA decides who is a resident by looking at ties. The main ones are a home in Canada, a spouse or common-law partner and dependants. Secondary ties count too, such as bank accounts, a driver’s licence and provincial health coverage. The CRA’s page on determining your residency status lays out the whole test.
Someone who keeps a house here and rents a place in Austin for work may still be a factual resident of Canada. Spend 183 days or more in Canada in a year without those ties and you can be a deemed resident, unless a tax treaty makes you a resident of the other country. If you’re unsure, the CRA offers form NR73 for people leaving Canada, and it gives an opinion on your case.
What does Canadian tax cost compared with a zero-tax state?
A fair comparison starts at home. On $120,000 of taxable income, our 2026 engine gives $28,602.76 of federal and Ontario tax, which is 23.8%. Alberta comes to $27,609.73 (23.0%). Quebec comes to $33,572.60 (28.0%).
The gap between Ontario and Alberta is under $1,000. Quebec sits about $5,000 above Ontario and nearly $6,000 above Alberta. So the choice of province moves your bill less than people expect, and the jump from Canada to a zero-tax state is not the only thing to weigh.
Those numbers leave out US federal tax, health insurance and every sales or property tax, which is where most of the real difference between two places hides. You can test your own income with the income tax calculator. The marginal tax rate calculator shows what the next dollar of a raise would cost you here.
What if you only earn or work in one of these states?
Working there for a while is a different case from moving. The Canada-US tax convention exists to avoid double taxation, and it sets out which country may tax which income. Employment income of a US resident for work done in Canada is one of the topics it covers. We haven’t gone through the treaty article by article, so read the Department of Finance text or ask a cross-border tax accountant before you assume an exemption.
One more thing to watch: a state with no income tax may raise its money elsewhere, so look at sales and property tax before you decide anything. A job that pays $120,000 in Toronto and $120,000 in Austin are not the same paycheque once rent, insurance and property tax come out. For a rough feel of Canadian sales tax, the GST/HST calculator shows what a purchase costs here.
What should you do before a move south?
Take the ties one at a time. Write down what you’d keep in Canada: the house, the bank accounts, the family. Be honest about it, because a list that’s mostly ties means you’ll probably stay a Canadian resident for tax. Then decide whether to ask the CRA for an opinion on form NR73. Finally, keep a folder with dates, leases and proof of where you lived. Think of it as a paper trail for tax time, since the CRA can ask years later.
Mistakes people make with this question
The biggest is thinking “no state tax” means “no tax”. The federal government of the United States still taxes income in every state.
Another is leaving Canada on paper but keeping every tie. The CRA looks at facts, not at a change of address form.
And some people never tell the CRA anything, then wonder years later why their status is a question. If you are leaving for good, ask for the NR73 opinion and keep the answer with your records, because a residency argument is much easier to win with paper in hand than with memory.
Our sources
The list of states comes from the Tax Foundation’s 2026 state income tax page. Residency rules come from the CRA‘s page on determining your residency status, and the treaty note comes from the Department of Finance page for the Canada-US convention. Canadian tax figures use 2026 federal and provincial data, checked on 29 September 2026. We couldn’t confirm the state list on a US government page.
Frequently asked questions
Which states have no income tax in 2026?
Per the Tax Foundation: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas and Wyoming. Washington taxes capital gains only.
Do I stop paying Canadian tax if I move to Texas?
Not automatically. The CRA looks at your ties to Canada, such as a home, a spouse or dependants, and worldwide income stays taxable while you're a resident.
How many days can I spend in Canada before I'm a deemed resident?
The CRA says 183 days or more in a calendar year can make you a deemed resident, even without significant ties.
How can I get the CRA's opinion on my residency?
The CRA points to form NR73 for people leaving Canada and NR74 for people entering.
How much tax is $120,000 in Ontario?
Our 2026 engine gives $28,602.76 of federal and Ontario income tax, about 23.8%.