As 2026 rolls on and families prepare for the upcoming school year, household budgets may face a tight squeeze.

Inflation continues to drive up everyday expenses like groceries, gas, and utilities. But for parents of young children, the most significant financial burden often comes from early childhood care.

The years from birth to age five are typically the most expensive. This is largely driven by center-based infant and preschool care, which contributes to an average annual cost of $29,325, according to a recent LendingTree study.

However, local tax structures and regional economics may influence how much you pay.

In some tax-friendly states, the average annual price of full-time care drops closer to $18,000 — roughly 38% below the LendingTree average. Yet a lower childcare price tag doesn't necessarily help if high sales taxes or the cost of living drag your budget back down.

To see how different regions balance these trade-offs, we analyzed ten low-tax states for middle-class families and ranked them by early childcare costs and cost-of-living indices.

Tax-friendly states ranked by childcare affordability

To determine the baseline for "affordability," we looked at how much families spend on state taxes as a percentage of their income (basing "middle-class" on the latest U.S. Census Bureau median household income data).

Next, center-based data from Child Care Aware® of America (CCAoA) was used to measure average annual early childcare costs for one child (ages 0 to 4) as a percentage of the median household income for a married couple.

The childcare cost calculations account for five key factors:

• Infant care pricing
• Toddler care pricing
• 4-year-old preschool pricing
• Before- and after-school care
• Summer programs

Kiplinger factored in the U.S. Bureau of Economic Analysis (BEA) cost-of-living index, which uses regional price parities (RFPs) to measure local prices for essentials like housing, food, transportation, and healthcare. On this scale, 100 represents the national average; a score of 88 means a state is 12% cheaper than average, while 102 indicates it is 2% more expensive.

Property tax figures were sourced from PropertyShark.

Yet it's important to note that family size, educational opportunities, and other factors can influence how "affordable" a state is, and "middle-class" may be subjective. Consult with a tax professional for your specific financial situation.

Note: Where before-and-after-care or summer program pricing data were unavailable, Kiplinger used a national average as a baseline.

1. South Dakota: Best overall value and lowest cost-of-living

Average annual childcare costs: $17,030

Childcare costs as a % of income: 14.2%

Cost-of-living index: 88.6

If you're a parent and you hate paying taxes, South Dakota is the most affordable state on our list for middle-class families. Everyday expenses track about 11.4% below the national average, potentially saving new parents on must-haves like formula and baby clothes.

Total annual childcare costs average around $17,030 (well below the national average, according to LendingTree), helping keep the overall income-to-cost ratio manageable at 14.2%.

Middle-class family taxes to consider:

• There is no personal income tax in South Dakota, allowing families to take home more of their earnings.
• To compensate for this, the state relies heavily on property taxes, which hover right around or above the national average, per PropertyShark data.
• Additionally, the 4.2% state sales tax applies to both groceries and diapers — everyday essentials that many other states exempt.

The bottom line? South Dakota's no-income-tax policy and low property taxes could help with your long-term family tax planning, but a large volume of goods for young children could offset some of your state tax savings.

2. Louisiana: Low cost of living and childcare costs

Average annual childcare costs: $18,252

Childcare costs as a % of income: 15.6%

Cost-of-living index: 88.2

Louisiana claims the second spot on this list thanks to its low cost of living. Average annual childcare costs total just over $18,200, consuming a modest 15.6% of median household income for married couples. Plus, the everyday living expenses — like food and gas — are 11.8% cheaper than the national average, according to the BEA.

Middle-class family taxes to consider:

• While considered a "tax-friendly" state for the middle-class family, Louisiana barely made our list, since its average combined sales tax is the highest in the nation at a whopping 10.11%.
• On the other hand, property taxes are among the lowest in the country, with a median bill of just $1,180 — significantly below the national average of $3,119.
• And the Bayou State has a low flat income tax of just 3% in 2026, among the lowest in the nation, according to the Tax Foundation.

The bottom line? If you don't mind higher sales taxes for lower property tax bills, a potentially cheaper cost of living, and reduced childcare costs compared to other states, Louisiana could be the second "most affordable" state to live in.

3. North Dakota: Average taxes, but cheaper childcare affordability

Average annual childcare costs: $21,292

Childcare costs as a % of income: 16.2%

Cost-of-living index: 89

North Dakota secures third by offering low costs and high savings. Families spend roughly 16.2% of their income on early childhood care in the Peace Garden State, a rate lower than most on this list. Plus, below-average costs for healthcare and groceries are common in the state, per the BEA.

Middle-class family taxes to consider:

• Unlike its southern neighbor, North Dakota levies a state income tax, though it's quite low, ranging from 1.95% to 2.5%.
• The state sales tax is a moderate 5%, and, importantly, groceries are state-tax exempt.
• Property taxes are also pretty average compared to the national median, according to PropertyShark data.

The bottom line? North Dakota's financial landscape may represent a stable, "middle-of-the-road" path for middle-class families, with few tax "surprises" and potentially low early childcare costs.

4. Wyoming: Low cost of living balances the national average

Average annual childcare costs: $21,080

Childcare costs as a % of income: 17.5%

Cost-of-living index: 92.7

Early childhood care costs can be low for Wyoming families. Center-based infant care averages just $13,120 annually, and summer care programs typically run below $2,400, according to the CCAoA. Plus, the overall cost-of-living index sits 7.3% below the national average.

Middle-class family taxes to consider:

• Wyoming has no state income tax, which can provide relief for middle-class paychecks.
• Also, the state features very low property taxes, with a median property tax bill of just $1,767 (significantly below the national average of $3,411), according to PropertyShark.
• On the other hand, Wyoming still taxes diapers at its moderate 4% state sales tax rate.

The bottom line? Wyoming can provide significant tax relief, especially if you hate paying high state income taxes or property taxes; daily essential costs can also remain low, unless you venture into more rural areas.

5. Alaska: High local costs drag down cost-to-salary ratio

Average annual childcare costs: $20,178

Childcare costs as a % of income: 14.7%

Cost-of-living index: 102.4

Alaska features the second-lowest childcare cost-to-income ratio on the list, requiring just 14.7% of a typical married couple's salary, per the latest data from CCAoA.

But it ranks fifth overall because its remote geography significantly inflates the cost of daily necessities like food and heating utilities, pushing its overall cost of living above the national average.

Middle-class family taxes to consider:

• Alaska is another no-income-tax state, which means capital gains, salaries, and bonuses are exempt from state tax.
• The Last Frontier also levies no statewide sales tax, according to the Tax Foundation.
• However, because Alaska doesn't collect income or sales tax, local and property taxes can vary widely by region.

The bottom line? For families who can navigate long winters and high retail prices, Alaska's early childhood programs can be affordable depending on the area and household income level.

6. Florida: Moderate costs with a higher cost-of-living

Average annual childcare costs: $19,520

Childcare costs as a % of income: 16.9%

Cost-of-living index: 103.4

It might come as a surprise that Florida lands in the bottom half of the rankings on our list.

But the Sunshine State's cost of living sits nearly 4% above the national average according to the BEA, driven up by rising costs in healthcare, food, and utilities. According to the CCAoA, childcare accounts for 16.9% of the median family income, providing some relief for middle-class budgets.

Middle-class family taxes to consider:

• All forms of personal income are state tax-free, which is one of the reasons people move to Florida.
• State officials are also looking to greatly reduce or even eliminate property taxes, though for now, the median bill is just below the national average, per PropertyShark.
• The statewide sales tax rate is relatively high, at 6%, yet diapers and groceries aren't subject to state sales taxes.

The bottom line? While the cost of living on items like groceries, home insurance premiums, and healthcare is higher in Florida than in other places on our list, middle-class families may still find early childhood care affordable in less expensive areas.

7. Arizona: Higher cost of living, but low taxes on everything else

Average annual childcare costs: $21,909

Childcare costs as a % of income: 18%

Cost-of-living index: 100.7

Arizona's placement reflects a combination of an above-average cost-of-living index and steep upfront childcare fees.

Per the CCAoA, middle-class families can expect to dedicate 18% of their annual income to early childhood care, which is only 2% below the national average. Center-based programs for infants and toddlers are more costly than other states so far, averaging $16,384 and $13,742 per year, respectively.

Middle-class family taxes to consider:

• Arizona has a flat income tax rate of 2.5%, making personal individual returns perhaps a little simpler for families.
• Plus, the Grand Canyon State has some of the lowest property taxes in the nation, with a median bill of only $1,879 — 55% below the national average, according to PropertyShark.
• At the same time, the state's 5.6% sales tax is relatively average; Arizona still taxes diapers.

The bottom line? Despite a higher cost of living, Arizona could be an affordable option for parents with slightly higher incomes who want lower property tax bills. But the overall financial and tax environment requires careful cash-flow management for growing families.

8. Tennessee: Low childcare costs except in the summer

Average annual childcare costs: $23,371

Childcare costs as a % of income: 20.8%

Cost-of-living index: 91.9

Despite boasting a relatively low cost-of-living index that is 8.1% below the national average, Tennessee ranks low on our list due to the state's shortage of licensed childcare facilities. Because of this, summer childcare costs alone can reach over $8,000, pushing total annual care to nearly 21% of a family's household income, per CCAoA data.

Middle-class family taxes to consider:

• Tennessee has no state income tax, meaning your wages, salaries, and tips are state tax-free.
• Property taxes are also among the lowest in the U.S., with a median bill of around $1,442, according to 2026 PropertyShark data.
• High sales taxes are the norm in the Volunteer State. At 7%, Tennessee's base rate is the second-highest in the nation and applies to diapers. Groceries are also taxed, although at a lower rate of 4%.

The bottom line? Tennessee's lower cost of living offers potential savings on most everyday expenses. However, middle-class families with young children should factor in the higher sales tax rates and elevated summertime care costs into their annual budgets.

9. Nevada: Middle ground cost of living, with higher childcare costs

Average annual childcare costs: $24,102

Childcare costs as a % of income: 21.1%

Cost-of-living index: 100

Nevada represents a somewhat flat baseline for everyday living, with housing, food, and medical costs landing right around the national average, according to the BEA. Yet early childcare eats up more than one-fifth (21%) of the median middle-class household income, making these costs a heavier burden than in other areas on our list.

Middle-class family taxes to consider:

• Like many other states on this list, Nevada has no state income tax, helping middle-class families keep their entire paycheck (at least from a state tax perspective).
• Per PropertyShark data, property taxes are also low, with a median bill of about $2,027.
• Sales taxes are a bit higher, around 6.85%, though Nevada doesn't tax groceries or diapers at the state level.

The bottom line? Nevada families enjoy zero state income tax and highly reasonable property taxes, which offer some relief, but the high cost of childcare means that while families keep their full paychecks, a substantial portion is immediately redirected to local care facilities.

10. Washington: Least affordable, high cost of living

Average annual childcare costs: $28,436

Childcare costs as a % of income: 19%

Cost-of-living index: 107

Washington closes out the list as the most expensive tax-friendly state for middle-class families with young children. A cost-of-living index of 107 means families pay a 7% premium on necessities like housing and utilities.

While high median incomes keep the childcare-to-salary ratio at 19%, the annual average childcare cost of $28,436 makes it the most expensive baseline care price on the list, according to the CCAoA.

Middle-class family taxes to consider:

• Though there is no personal state income tax, Washington imposes a 7% to 9.9% tax on long-term capital gains over $262,000.
• The Evergreen State also has a high sales tax, ranking among the highest in the nation.
• Property taxes, too, are expensive, with a median bill above the national average at $4,556, according to PropertyShark data.

The bottom line? Although childcare costs are comparable to a couple of other states on this list, property taxes, an elevated cost of living, and high sales taxes create significant financial hurdles for middle-class families.

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Virginia lawmakers have approved what appears to be the nation’s first tax on data center electricity use.

The budget deal, which ends months of budget negotiations, will impose a new charge on the power used by data centers in the Commonwealth beginning July 1.

But…the compromise stops short of rolling back the long-standing and controversial sales tax exemption on equipment that has helped fuel Virginia's massive data center industry.

The legislation now heads to Gov. Abigail Spanberger, who is expected to sign it before the start of the new fiscal year. Here's more of what you need to know.

Virginia data center tax compromise

The new data center tax emerged from negotiations during this year’s General Assembly session, as Virginia lawmakers struggled to reconcile competing views on how to tax one of the Old Dominion state's fastest-growing industries.

For months, some state senate lawmakers pushed to scale back or eliminate Virginia’s sales tax exemption for data center equipment.

Supporters of repealing the billion-dollar tax exemption argued that the incentive — first enacted in 2008 — has become increasingly costly as data center construction has accelerated across Northern Virginia. State estimates show the exemption now reduces revenue by more than $1.5 billion annually and is expected to rise further as new facilities come online.

Still, some House of Delegates lawmakers and Gov. Spanberger opposed eliminating the incentive outright. A concern was reportedly that eliminating or changing the exemption before its slated end in 2035 could undermine Virginia’s reputation as a destination for stable technology investment.

The disagreement had stalled broader budget negotiations until lawmakers reached a compromise earlier this week: keep the exemption in place, but add a new tax tied directly to electricity consumption.

Under the FY 2027–FY 2028 biennial budget agreement:

• Data centers will pay 1.1 cents per kilowatt-hour of electricity consumed, billed monthly.
• If Spanberger signs the budget, the tax will begin on July 1, 2026.
• Revenue is capped at $600 million annually, with excess collections refunded to the data centers at the end of the fiscal year.

Virginia's Data Center Alley: Why this matters

As Kiplinger has reported, Virginia is home to the largest concentration of data centers in the world, with Northern Virginia’s “Data Center Alley” anchoring a global hub of cloud computing and digital infrastructure.

Around 200 facilities are currently operating in Loudoun County alone, with more planned. These facilities handle over one-third of the world’s daily internet traffic.

But the scale of the data center industry has sparked debate over everything from electricity and water usage to noise concerns.

• Utilities and grid planners have warned that data center electricity demand is growing rapidly, driven in part by artificial intelligence (AI) workloads that require more computing power than traditional cloud services.
• In some forecasts, data centers could account for roughly 20% to 30% of electricity demand in parts of Virginia over the next decade if current growth trends continue.
• For some Virginia residents living near data centers, the constant hum from cooling systems, back-up generators, and other equipment has become a quality of life issue.

Data centers also typically rely on large diesel-powered backup generators to ensure uninterrupted operations during power outages, which raises concerns about local air quality in some communities.

And, depending on the design and cooling technology, large facilities can consume hundreds of thousands of gallons of water per day to cool server racks. Some large campuses reportedly use volumes comparable to those of a small town, raising sustainability questions in some communities.

Adding to the debate, the existing data center sales tax exemption in Virginia cost an estimated $1.6 billion last fiscal year, according to the Commonwealth’s tax disclosures.

That massive exemption and the growing backlash over the more than 600 data centers already in the Commonwealth have made data centers a politically sensitive issue.

But Virginia isn't alone. Similar data center debates have erupted across the United States.

A recent Gallup poll finds that 71% of Americans now oppose the construction of AI data centers in their local communities (with 48% strongly opposed). The pollsters note that local data center construction is more unpopular in the U.S. than building a nuclear power plant.

As of June 2026, according to various online trackers, more than 25 states are either advancing data-center-related legislation or have enacted measures that address grid cots, reporting requirements, utility regulation, tax incentives, or local authority over data centers.

Virginia data center tax exemption: What's next?

For most residents, the immediate impact of the new tax will likely be indirect, since the data center tax revenue will flow into the Commonwealth's general fund.

Notably, under the budget compromise, the Virginia Department of Environmental Quality (DEQ) would play a larger role in regulating data centers. The agency, currently responsible for protecting Virginia's air, water, and land resources, would study data center impacts, create rules, and oversee limits on issues including noise and water use.

Will Spanberger sign? Gov. Spanberger, who has signaled support for the compromise, is expected to sign the budget.

Her signature will end this year’s fiscal standoff, but not the broader debate over how and whether the data center industry should be taxed or constrained. So stay tuned.

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After lawmakers approved HJR 1-F during a special session on June 2, a proposed constitutional amendment aimed at expanding property tax relief for homeowners is headed to the November ballot, setting up one of the most closely watched tax debates in recent Florida history.

For homeowners, the proposal could mean significant savings. Under the measure, Florida’s existing $50,000 homestead exemption would increase to $150,000 in 2027 and $250,000 in 2028, reducing the portion of a home’s value subject to tax.

A homeowner with a $400,000 primary residence could save thousands of dollars annually, depending on local tax rates. And for supporters, that potential savings is exactly the point.

Critics, however, have raised questions about how local governments would replace the revenue currently generated by property taxes, which a legislative analysis projects could drain local municipalities of up to $8.4 billion annually by 2028.

And…a nonprofit group, naming two former South Florida mayors as plaintiffs, has filed a lawsuit against the measure, arguing that the ballot summary is "unconstitutionally biased, misleading, and inaccurate."

These tensions have emerged as central questions surrounding the proposal as it heads toward a statewide vote. Here's more of what you need to know.

The HJR 1-F property tax exemption for Florida homeowners

The passage of HJR 1-F moves the long-debated property tax relief conversation in Florida from Tallahassee to the ballot box.

• If approved by at least 60% of Florida voters this November, the amendment would significantly expand the state’s homestead exemption for qualifying homeowners.
• The proposal applies to owner-occupied primary residences that qualify for Florida’s homestead exemption and would not extend to second homes or investment properties.
• The measure also introduces a tiered structure based on residency duration.

Current Floridians and those who establish permanent residency by December 31, 2026, would be eligible for the full tax break immediately, while anyone moving to the state after that date would have to wait five years before becoming eligible for the full $250,000 exemption.

Gov. Ron DeSantis has framed the measure as a way to provide relief for homeowners facing rising housing costs, insurance premiums, and other housing-related expenses.

“I think a lot of people need relief,” DeSantis told reporters in a recent presser, adding, "I think a lot of people have been wondering, where can we get it? We’re showing a pathway to be able to get that done that I think is going to be transformational for people."

To justify that relief, the administration points to an aggressive surge in local property tax collections.

According to data released by the governor’s office, property tax revenue collected by Florida local governments has nearly doubled over the past seven years, climbing from $32 billion to $60 billion. It is currently projected to reach $83 billion by 2032.

Why property taxes matter

Property taxes have become an increasingly visible part of the cost of homeownership, particularly in fast-growing areas where home values have climbed sharply over the past decade.

For retirees, fixed-income residents, and longtime homeowners, the appeal of lower property tax bills is easy to understand. Many are already balancing rising insurance premiums, HOA fees, utility costs, and other housing-related expenses.

Supporters argue homeowners should not continue paying higher taxes simply because their property values have increased. They view the amendment as long-overdue relief that would allow residents to keep more of their own money while strengthening Florida’s reputation as a low-tax state.

For many households, even modest savings could have a meaningful impact on annual budgets.

Tradeoffs for Florida voters

The debate surrounding the amendment extends beyond annual tax bills and potential savings.

Former State Sen. Jeff Brandes has described the proposal as "a tax shift, not a tax cut," arguing that while homeowners may pay less directly, the costs associated with funding local government services do not simply disappear.

Property taxes currently help support many of the services and infrastructure residents rely on every day, including public safety, road maintenance, infrastructure improvements, and emergency preparedness.

Notably, HJR 1-F legally requires local governments to prioritize remaining property tax revenues strictly on designated "core services," such as law enforcement, fire protection, and flood control.

However, the lawsuit filed by Save Our Voters From Misleading Ballot Language argues that the ballot summary's promise of "ensuring funding for core services" is misleading when the policy itself cuts the revenue available to pay for them.

In a state that regularly faces hurricanes and severe weather events, how local governments would replace billions of dollars in projected revenue reductions remains one of the proposal’s biggest unanswered questions.

Cragin Mosteller, spokesperson for the Florida Association of Counties, told the Miami Herald that "one of the things that is easy to overlook sometimes is that we move to a community not only because it’s safe but because it’s wonderful, because it has a great quality of life."

For opponents, the question isn’t whether homeowners deserve lower taxes. It’s whether communities can continue delivering that quality of life if one of their largest sources of funding is significantly reduced.

Ultimately, the decision comes down to how homeowners view property taxes: as a recurring cost of homeownership or an investment in the neighborhood surrounding that home.

Infrastructure and public safety are easy to take for granted when they work seamlessly, but their true value becomes clear the moment those services are stretched thin.

What happens next

The amendment must receive at least 60% voter approval to become part of the Florida Constitution — assuming the text first survives its current legal challenge. So between now and Election Day in November, debate over the measure will continue as those on both sides try to win over voters.

Floridians will ultimately have to weigh historic tax savings for their household budgets against long-term funding concerns and the certainty of local services they rely on every day.

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Spending the summer months in Arizona might sound intense — and it often is.

Between a stretch of 100-degree days, spiking utility bills, and the sudden storms of monsoon season, the desert climate can certainly feel daunting. But these few months only tell part of the story.

From fall through spring, Arizona shifts into a sun-soaked haven. During this period, the Grand Canyon State boasts the mild weather of coastal California at a comparatively lower cost.

That affordability extends to state income and property taxes. Residents enjoy a low flat income tax of just 2.5%, and property tax rates typically fall below the national average. There is no state inheritance tax to worry about, and Arizona waives its state sales tax on groceries.

Interested in finding your piece of the desert? Buckle up for a road trip. Here are the ten cheapest places to live in Arizona.

Cheapest places to live in Arizona

After Kiplinger ranked property tax bills from highest to lowest per county in Arizona, one trend jumped out: Rural areas are the cheapest. You’ll typically find a more affordable lifestyle in the country than in metropolitan areas like Phoenix.

But if you’re ready to see vast desert landscapes and quaint small towns and are willing to travel to a city for other amusements, look into these places in Arizona.

Note: Kiplinger used 2026 data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in Arizona to live.

Santa Cruz County

Median property tax bill: $1,415

Median home price: $233,000

At a median of $1,415, Santa Cruz County features the highest property tax bill on our list. Yet, home prices are relatively modest, at roughly $233,000, according to the Tax Foundation.

Located along the sunny Mexican border, Santa Cruz is Arizona's smallest county by land area, but don't let that fool you — there's plenty to do. Whether you're looking for a deeply cultural journey, historic exploration, or a scenic outdoor escape, Santa Cruz offers a distinct, authentic vibe in every region.

Nature lovers can experience world-class birding in the Patagonia Mountains and Patagonia Lake State Park, explore the scenic Arizona Trail, or hike through the lush Sonoita Creek State Natural Area. Just up the road, you can taste award-winning local varietals in the high-desert wineries of Sonoita and Elgin.

For history and art enthusiasts, the area boasts the historic 18th-century Spanish mission at Tumacácori National Historical Park and the oldest Spanish military presidio in Arizona at Tubac, which has evolved into a thriving, world-renowned artist colony.

In the heart of the county sits Nogales, the vibrant county seat and one of the nation's most crucial international ports, anchoring a rich Mexican-American border culture and a bustling produce economy.

So come to Santa Cruz for whatever your vibe is, but stay for the relatively affordable property tax bill.

Gila County

Median property tax bill: $1,386

Median home price: $269,400

Gila has the second-highest median home price on our list, at $269,400, though its median property tax bill is just under $1,400, per the latest U.S. Census Bureau Data. This anomaly exists because while property tax rates are low, highly desirable mountain communities like Payson and Pine drive up home values.

Outdoor enthusiasts might absolutely love Gila County for its local topography. The landscape shifts from the blooming cactus of the Sonoran Desert to the towering ponderosa pines of the Mogollon Rim, meaning a scenic hike is never far away, no matter where you roam.

Residents also enjoy easy access to Tonto Natural Bridge State Park, which contains the world's largest natural travertine bridge. Meanwhile, water lovers can explore Roosevelt Lake — the largest lake entirely in central Arizona — via boating, fishing, and camping along the shoreline.

Families might also love exploring the ancient, restored Salado pueblo ruins at Besh-Ba-Gowah Archaeological Park, or visiting the Tonto Fish Hatchery to learn all about the trout life cycle.

If you have an active, outdoorsy household, Gila County, Arizona, might make for an incredible next stop, and your wallet could thank you.

Yuma County

Median property tax bill: $1,333

Median home price: $217,800

With a median property tax bill hovering around $1,333, Yuma County stands out as a highly affordable corner of the Grand Canyon State. Home prices can also be lower, with a median home price just under $218,000, per the Tax Foundation's data.

Known as the "Winter Lettuce Capital of the World," the region famously produces roughly 90% of all the leafy greens consumed across North America during the winter months. Beyond its agricultural importance, Yuma is also recognized as the "Sunniest Place on Earth," holding a Guinness World Record for enjoying sunshine about 91% of the year — so be sure to pack your parasol!

Residents take advantage of this endless sunshine by kayaking, canoeing, and tubing along the Colorado River, exploring the scenic walking trails and butterfly gardens at West Wetlands Park, or conquering the rolling hills of the Imperial Sand Dunes.

But if outdoor adrenaline isn't your thing, no biggie; historical sites like the Yuma Art Center & Historic Theatre and a vibrant downtown shopping scene mean you can easily trade the desert heat for central AC without missing out on the local vibe.

Whether you're looking for booming seasonal energy or desert relaxation, Yuma County awaits, complete with a relatively low property tax bill.

Cochise County

Median property tax bill: $1,310

Median home price: $218,300

Homes in Cochise are priced slightly higher than in Yuma County, with a median price of around $218,300. However, the median property tax bill is comparatively lower, at just $1,310, according to the U.S. Census Bureau.

Keen on a unique, bohemian atmosphere? Cochise has you covered. Nestled in the region is Bisbee, an artsy mountain enclave beautifully carved into the steep hillsides of Mule Mountain Canyon. The town is filled to the brim with historic brick buildings, local boutique shops, and distinct craft breweries. And when you want to switch gears, you can easily head into other parts of the county for a totally different lifestyle.

The region is famous for the iconic Old West town of Tombstone, home to a community proudly preserving its rugged cowboy heritage through authentic stagecoach rides and daily reenactments of the historic gunfight at the O.K. Corral.

For the outdoorsman, the area surrounding the city of Sierra Vista provides exploration of underground rock formations at Kartchner Caverns State Park, hikes through the scenic San Pedro River Valley, and rock climbing at the Cochise Stronghold.

Offering a vibrant mix of exciting, unconventional, and rich all-American culture, Cochise County delivers a perhaps unforgettable southwestern lifestyle — with surprisingly low property taxes.

Mohave County

Median property tax bill: $1,238

Median home price: $281,000

Located a little over two hours from Las Vegas, Mohave County has a relatively low median property tax bill of just under $1,240.

However, the median home price is the highest on our list at $281,000, according to the latest Tax Foundation data. This is largely due to a localized housing shortage coupled with out-of-state migration from higher-cost states, like California. But don't let Mohave's slightly higher prices drive you away from this piece of American history.

The area has the longest remaining drivable stretch of the historic Route 66, giving residents access to vast, open desert landscapes. You can also take a walk into the Grand Canyon West, where stepping out onto the Skywalk — a famous horseshoe-shaped glass bridge suspended 4,000 feet above the canyon floor — isn't just a daring fantasy, but a reality.

The county's unique geography also features the iconic London Bridge, which was meticulously relocated from England to Lake Havasu City in the 1900s. Alongside local lakes and the Colorado River, the region offers plenty of water recreation paired with a deeply rooted historic mining culture.

Looking for a slice of wide-open outdoor living mixed with a lack of restrictive HOAs and plenty of lifestyle freedom? Mohave County, Arizona, might just be your next move.

Navajo County

Median property tax bill: $1,195

Median home price: $201,500

Navajo County home prices are relatively low compared with other places on our list, at just around $201,500. Median property tax bills are also considered cheap at under $1,200 per year, according to the Tax Foundation.

The area is known for the dramatic contrast of red sandstone buttes in the north and cool pine forests, alpine streams, and deep lakes in the south. Named after the Navajo Nation, which spans across its northern territory, the county is also home to the Hopi and White Mountain Apache tribes, creating a rich cultural tapestry.

Up north, residents can explore the iconic monoliths of Monument Valley alongside local Navajo guides, or visit Petrified Forest National Park to hike past ancient fossilized logs and vibrant strata in the Painted Desert.

Down south, the vibe transforms into a mountain resort centered on active communities like Show Low and Pinetop-Lakeside. Here, locals enjoy endless summer fishing, boating, and hiking at the Fool Hollow Recreation Area, as well as skiing and snowboarding at Sunrise Park Resort during the winter.

Navajo County might just be the ultimate all-season escape from the desert heat and winter snow, delivering a diverse mountain lifestyle paired with a surprisingly affordable property tax bill.

Graham County

Median property tax bill: $1,013

Median home price: $212,000

The median property tax bill in Graham is cheap, at slightly more than $1,000 per year. Home prices can also be relatively inexpensive compared to the rest of the state, with a median of about $212,000 according to the U.S. Census Bureau.

Those who want a classic, laid-back small-town American vibe might stop their travels right here. The county is named for the lofty Mount Graham, which serves as a picturesque backdrop for the entire county. Locals can hike or off-road up the mountain, or soak in nearby mineral hot springs.

Graham also has a tight-knit, small-town atmosphere, where local traditions, such as high school football games, holiday light parades, and seasonal harvest events, are center stage. The region even draws travelers from all over for its annual Salsa Fest.

Yet, despite the hometown charm, Graham is quite the scientific hub. Residents can book guided astronomy tours to see the enormous telescopes at the Mount Graham International Observatory, delve into the Space Shuttle simulators at Eastern Arizona College's Discovery Park, or head outdoors to learn about desert conservation at the striking Gila Box Riparian National Conservation Area.

Come to a place steeped in tradition, research, and strong community, and stay because those property taxes are just so cheap.

La Paz County

Median property tax bill: $873

Median home price: $135,800

A little over two hours from Phoenix is La Paz County, with a median property tax bill of just $873, which is lower than that of all neighboring counties. According to Tax Foundation data, the median home price is also relatively cheap, at $135,800.

La Paz is a snowbird's paradise. Winter residents and visitors flock to the region to enjoy sunny boating on the Colorado River, relaxed camping at Buckskin Mountain State Park, and the sprawling gem and mineral shows in Quartzsite.

For adrenaline seekers, the county delivers in spades, whether you're jet-skiing on the Parker Strip or tearing through the open desert along the rugged Arizona Peace Trail.

Conversely, when summer hits its stride, a beautiful hush falls over the region. Much like the rest of rural Arizona, the crowds thin out, treating residents to private solitude, wide-open roads, and peaceful river access all to themselves.

So if you want exceptionally low property taxes, you could reside in La Paz County for its vibrant winter fun and unmatched seasonal relaxation.

Apache County

Median property tax bill: $572

Median home price: $63,700

Apache County, Arizona, has the lowest median home price on the list, sitting under $64,000 according to U.S. Census Bureau data. Median property tax bills are also exceptionally cheap, hovering just below $575.

Because Apache County is a remote region where the Navajo Nation holds a significant portion of the territory, private acreage is limited, leading to more off-grid living and cheaper home prices. So if homesteading is your goal, the county has your back.

In particular, the sprawling high-desert flatlands near towns like Concho and St. Johns are famous for having highly affordable land, paired with a quietly independent attitude. You must be prepared to haul your own resources, though, which may include drilling a well or setting up solar power — traditional municipal utilities are scarce, which can rack up costs.

Yet when you want to transition from homesteading to recreation, the county offers unforgettable southwestern experiences. Residents can take incredible guided tours through the sheer cliffs of Canyon de Chelly National Monument, hike the brilliant badlands of the Painted Desert, or step back in time by exploring the Hubbell Trading Post National Historic Site.

For the modern frontiersman in all of us, Apache County's unbeatable wide-open freedom could be your calling.

Greenlee County

Median property tax bill: $518

Median home price: $158,600

Greenlee County is the cheapest place to live in Arizona. The median property tax bill is only $518, and home prices are around $158,600, per the most recent Tax Foundation data.

As Arizona's least populous county, Greenlee is peaceful, off the beaten path, and defined by mining, ranching, and warm small-town hospitality. In fact, it hosts the Morenci Mine, the largest open-pit copper mine in North America.

Running right through the county is the historic Coronado Trail (U.S. 191), featuring more than 400 twists and turns that provide prime motorcycling, cycling, and sightseeing opportunities.

Following this winding route upward leads to a dramatic change in scenery at Hannagan Meadow. In stark contrast to the desert canyons below, the meadow sits at over 9,000 feet, offering a mountainous setting for horseback riding, hiking, and both summer and winter eco-tours.

Rockhounds can also strike out into the desert to search for brilliant agate, blood-red jasper, and rare fire agate at public sites like the Round Mountain Rockhound Area and Limestone Gulch. Meanwhile, outdoor sportsmen may fish for native Arizona trout in the mountain streams or spend a quiet afternoon casting along the scenic banks of the Gila River.

So if you want to bypass bustling urbanization in favor of quiet, simple living, making the most affordable county in Arizona your next destination might just be the perfect choice.

More Cheap Places

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After weeks of intense budget negotiations, New Yorkers are in for a payout in 2026.

More than 8 million residents will receive hundreds of dollars in relief this fall, due to the Protecting Our Wallets Energy Rebate (POWER) program, a new initiative designed to combat surging gas and electric bills in the state.

Checks will be sent automatically to qualifying New York residents.

"We know New Yorkers need some relief," Gov. Kathy Hochul said in a press briefing regarding the program. "...The bills are just getting higher and higher, and it is so discouraging for our families."

But the POWER rebate is only one piece of a larger $268.1 billion puzzle. The finalized 2026-2027 New York budget introduces several targeted and localized changes to the state's tax landscape.

From a tipped income exemption for workers to a controversial new "pied-à-terre" tax on luxury New York City real estate, these provisions are intended to reshape New York's affordability — even as the state faces a staggering $34.3 billion cumulative structural budget gap through 2029.

Here's the breakdown of how the new budget might impact your wallet.

Who qualifies for a New York State rebate check?

Roughly $1 billion in rebates will be sent starting in September 2026. To be eligible, a taxpayer must be a full-time resident and not claimed as a dependent. No application is necessary.

The POWER rebates are also based on 2024 state tax filings. How much you receive depends on your state adjusted gross income (AGI) and filing status for that tax year.

Below is a table outlining the 2026 New York POWER check amounts:

Targeted relief for NY families, workers, and older adults

Beyond one-time checks, the budget also introduced a few long-term adjustments offering more potential savings for New Yorkers.

• Expanded childcare: The state is investing $1.5 billion to expand its Child Care Assistance Program (CCAP) by raising income eligibility limits to include more families and capping weekly copayments. Through instituting the $15 weekly caps, an eligible family currently paying $300 per week could see their annual expenses drop by over $14,000.
• Tax-free tips: Starting in 2026, New York will eliminate income taxes on the first $25,000 of tipped wages for those earning under $150k (similar to the federal "no tax on tips" deduction). This could save service workers — from servers to stylists — roughly $189 per person in annual state income taxes, according to state data and Kiplinger's analysis.*
• Older adult property tax relief: The state authorized an expansion of the Senior Citizen Homeowners' Exemption (SCHE) to $75,000 (up from $50,000). So, for example, if you're newly qualified for the homestead exemption and have a 2.5% property tax rate, you could save about $500 on your next property tax bill. (Yet, not all tax jurisdictions may adopt the exemption, and the percentage of your property tax bill that qualifies could differ depending on income.)

However, despite the state having the funds to support these initiatives, the New York State Comptroller forecasts a cumulative structural deficit of about $34.3 billion through 2029 due to federal cuts from the Trump administration, coupled with state Medicaid and education spending.

Additionally, New York City's structural deficit is projected to be $10.4 billion in 2027. New York City Mayor Zohran Mamdani has previously advocated for higher taxes on high earners to address the city's deficit. The new real estate surcharges included in the state's budget might just deliver.

The 'millionaire's' second-home tax in New York City

As part of the 2027 New York budget, Hochul and Mamdani have introduced an annual surcharge targeting New York City's high-end secondary market, specifically homes valued at $5 million or higher. This new "pied-à-terre" tax on non-primary residences will be in addition to annual property tax bills.

Here's how it'll work. Starting July 1, 2026, co-ops and condos will be taxed using the city’s current "assessed values" framework, starting with properties valued at $1 million or more. Single-family homes will use a lower annual tax rate for properties valued at $5 million. After two years, co-ops and condos will then switch to the lower single-family home framework.

Here's the math in action:

Here's how it could affect you. According to state officials, a single-family home assessed at $11.5 million would pay about $92,300 annually under the new tax law. In total, this second home tax is expected to cost some luxury homeowners about $500 million annually until the provision expires in 2031 (unless renewed by state lawmakers).

'Pied-à-terre' tax critics and budgetary concerns

New York is home to "the highest concentration of extreme wealth in the nation," according to the Institute on Taxation and Economic Policy (ITEP). At the same time, New York City has a 25% overall poverty rate, according to Robin Hood, which is higher than it has ever been.

Some state and city officials see the new second-home tax as a means to bridge New York City's wealth gap and the state's structural deficit in one go.

However, critics of the plan argue that the tax will weaken the city's economy rather than improve affordability.

"It will not raise the amount of revenue expected." James Whelan, President of the Real Estate Board of New York, reportedly wrote to Business Insider. "[It will] eliminate thousands of construction jobs, lower property values, and raise costs for New Yorkers."

• Recent reports from the U.S. Census Bureau mark New York property tax bills as among the highest in the nation, with a median bill of $6,542.
• The U.S. Bureau of Economic Analysis (BEA) also reports that the average prices for essential goods and services in the state, like food, transportation, and healthcare, are about 8% above the national average (ranking New York as the fifth most expensive state to live in overall by these metrics).

Fiscal watchdogs caution that $268 billion in spending could outpace inflation for New Yorkers.

"The budget increases State Operating Funds spending by at least 8 percent," the Citizens Budget Commission of New York (CBCNY) reported after the budget's release. "[This pushes] decade-long spending growth over $30 billion above inflation."

Yet even with budgetary concerns, New York State currently boasts a $2.5 trillion economy, ranking as the third-largest state economy in the U.S., according to the BEA.

This means the state generates about 7.9% of the nation's Gross Domestic Product (GDP), and recent projections for New York City's economic growth track around 1.7% annually, roughly in line with national U.S. GDP projections.

Bottom line for your wallet

For the average New Yorker, the 2027 budget might present a mixed bag of immediate relief and long-term questions.

If you are a working parent or a service industry professional, the combination of the POWER rebate, the childcare cap, and the tax-free tips could represent a significant relief in your monthly household costs for the coming year.

However, for the real estate industry and high-net-worth individuals, the pied-à-terre tax might signal a shift toward more aggressive wealth redistribution to patch a looming multi-billion-dollar deficit.

Ultimately, the $100 to $200 hitting your mailbox this fall could be a helpful bridge, but not quite a cure for the state's high cost of living. Whether New York's economic output can continue to outpace inflation — and whether the new NYC luxury taxes will drive away wealthier individuals — remains to be seen. Stay tuned.

Read More

• 10 Cheapest Places to Live in New York
• Will You Still Owe Taxes After Moving Out of a State With a Wealth Tax?
• New York Tax Guide

For first-time buyers and budget-conscious households, the 2026 housing market presents a significant challenge.

Last month, the U.S. Bureau of Labor Statistics reported an annual inflation rate of 3.8%, a surge that has trickled down to every facet of daily life, including groceries, healthcare, utilities, and — yes — even the housing market.

Currently, median home prices for new single-family homes are hovering around $412,000, according to Property Shark, with annual property tax bills hovering around $3,119 (though property taxes vary by locality).

But a handful of states tell a different story. In these locations, cost-of-living indices mostly remain below the national average, and median property tax bills are often under $1,500.

Are these lower costs enough to outpace inflation? To find out, we’ve ranked the top ten states with the lowest property tax bills in the U.S. by their affordability to see if 2026 is your year for a move.

States with the lowest property tax bills

Kiplinger used the latest data from Property Shark, sourced from the U.S. Census Bureau, to determine the ten lowest median property tax bills in the nation.

Then, median home values and household incomes were utilized to calculate the home price-to-income ratio for each state. This data point shows the average annual salary required to purchase a home in each state. For example, a ratio of 2.73 means that the average home price is roughly 2.7 times the state's average annual salary.

For our cost-of-living (COL) index, we utilized regional price parities (RFPs) from the U.S. Bureau of Economic Analysis (BEA). These figures represent a weighted average of prices for essential goods and services, including food, transportation, and healthcare.

On the BEA scale, 100 represents the national average. A score of 88, for instance, means the state is 12% cheaper than the national average, while a score of 102 indicates it is 2% more expensive.

Cost of living in states with low property taxes

The ranking below shows typical home values vs. average salaries in the states listed (as reflected in the home price-to-income ratio), along with daily living expenses such as grocery bills and local tax burdens.

While Kiplinger considered some qualitative factors, like job opportunities and weather, it's important to note that healthcare accessibility, education outcomes, political climate, and other considerations can influence reasons to live or move in a specific state and affect the amount needed for "affordable" living in that state.

Each individual's needs differ, so consult a tax professional or financial planner when necessary.

1. West Virginia: Low entry barrier for homeownership

Home price-to-income ratio: 2.73

Median property tax bill: $865

Cost-of-living (COL) index: 89.5

With a home price-to-income ratio of 2.73 according to Property Shark, West Virginia is the most affordable state on our list for homebuyers. Plus, a median property tax bill of $865 and a COL index 10.5 points below the national average secure the Mountain State's top spot.

• The trade-off: Job variety can be limited; West Virginia also has a relatively high state and local sales tax (which can reach 7% in some areas) and taxes most kinds of retirement benefits, but not Social Security benefits.
• Should you move? Remote workers and first-time buyers looking for maximum square footage for their dollar could win out. But if you need more amenities in less populated areas, you might reconsider West Virginia.

2. Mississippi: Cheap median home prices and cost of living

Home price-to-income ratio: 3.01

Median property tax bill: $1,215

Cost-of-living (COL) index: 87

Mississippi boasts a 3.01 home price-to-income ratio, which earns the state a high ranking, despite a significantly higher median property tax bill of $1,215 (compared to West Virginia). The overall cost of living (87) is among the lowest in the country, according to the BEA.

• The trade-off: The job market in Mississippi has been historically slower-paced, though metropolitan areas may sing a different tune. Still, Mississippi has one of the nation's highest grocery taxes at a whopping 5%. Home insurance premiums can also be high compared to the national rate, according to the latest data from Bankrate.
• Should you move? Professionals in agriculture or manufacturing who value a low-cost, warmer climate might consider moving to Mississippi. Also, those who want to live on the cheaper side of things may consider the Magnolia State home.

See also: 10 Tax-Friendly States for Retirees in 2026

3. Arkansas: Very low property taxes and costs on daily essentials

Home price-to-income ratio: 3.09

Median property tax bill: $1,040

Cost-of-living (COL) index: 86.9

Arkansas may be a haven for frugal living, holding the lowest overall COL index on this list at just 86.9. Daily essentials like gas and food are significantly cheaper here than in, say, Alaska or South Carolina. Property tax bills, too, can be quite low, at just over $1,000 per the latest U.S. Census Bureau data.

• The trade-off: Arkansas has some extreme weather. Capital gains are taxed as ordinary income (with a 50% exemption on net long-term investments), and high state and local sales taxes are used to offset the low property taxes.
• Should you move? You might relocate to Arkansas if you're an outdoor enthusiast looking to take advantage of the state's many mountains, lakes, and rivers (weather permitting). On the other hand, corporate professionals might settle near growing hubs like Bentonville or Fayetteville.

4. Oklahoma: Lower median household income and home prices

Home price-to-income ratio: 3.07

Median property tax bill: $1,599

Cost-of-living (COL) index: 87.8

Oklahoma has a relatively low home price-to-income ratio of 3.07, according to data sourced from Property Shark. Daily essentials like gas and electricity are also affordable with an index score of 87.8, about 12.2% lower than the national average.

• The trade-off: Property taxes are the highest in the states on this list, with a median bill of $1,599. Residents must also contend with "Tornado Alley" weather and a regressive tax system that relies heavily on sales tax.
• Should you move? Oklahoma typically offers a highly favorable business tax environment, which makes it a more attractive place to live for entrepreneurs and business owners. But once you're retired, some of your income may still be taxed, like distributions from your pension, 401(k), and IRA.

5. Alabama: The 'middle ground' of low taxes and cost of living

Home price-to-income ratio: 3.28

Median property tax bill: $788

Cost-of-living (COL) index: 88.8

Alabama has the second-lowest property tax bill on our list, with a median of just $788. The Heart of Dixie's COL index of 88.8 and home price-to-income ratio of 3.28 also make the state very affordable, though slightly less so than the top five, according to 2026 Property Shark data.

• The trade-off: Alabama summers are hot and humid. Combined state and local sales tax can reach 9.46%, according to the Tax Foundation; Alabama is one of the few states to still tax groceries, too.
• Should you move? Recent college grads, particularly in the growing tech and aerospace industries, might call the Cotton State "home." Although retirement income is state-taxed, certain exemptions and no state taxes on Social Security could make retirement more affordable.

6. Kentucky: Solid middle ground for overall affordability

Home price-to-income ratio: 3.23

Median property tax bill: $1,544

Cost-of-living (COL) index: 90.2

Kentucky isn't a standout performer for any one metric, but rather an overall affordable choice across the board. With a home price-to-income ratio of 3.23, you'll only need to offer about 3.2 times the average annual salary to buy a home, plus the cost of living is almost a full 10 points below the national average (per BEA data).

• The trade-off: Even though the median property tax bill of $1,544 is higher than that of many states listed here, it isn't the overall highest. However, if you plan on retiring in Kentucky, the Bluegrass State still taxes some retirement income (though it offers significant exemptions) and is one of the few states with a death tax.
• Should you move? Those seeking a blend of cultural hubs (like Louisville or Lexington) and affordable rural living could choose to live in Kentucky. But if you love the fast-paced energy of a city with bustling nightlife, you might look elsewhere.

7. Louisiana: Affordable living and home prices

Home price-to-income ratio: 3.56

Median property tax bill: $1,180

Cost-of-living (COL) index: 88.2

A 3.56 home price-to-income ratio puts Louisiana in the bottom half of the list. Yet while home prices are higher relative to income, the $1,180 median property tax bill remains a major draw for new residents. Plus, the COL index is still 11.8% lower than the national average, per the BEA.

• The trade-off: Louisiana has the highest sales tax in the U.S. (exceeding 11% in some areas). Home insurance premiums are also rising due to the state's location on the Gulf Coast, and summers are humid.
• Should you move? Budget-savvy buyers who prioritize lifestyle, arts, and food culture might make the move to the Pelican State. Once you retire, you could also find enjoyment in escaping the harsh winters of the north.

8. South Carolina: Popular destination with some affordability

Home price-to-income ratio: 3.74

Median property tax bill: $1,251

Cost-of-living (COL) index: 93.7

South Carolina is among the top ten states people are moving to in 2026, and current home prices reflect that. The median property tax bill is $1,251, which isn't bad, but the COL index of 93.7 is the highest on our list so far (yet still below the national average), according to 2026 BEA datasets.

• The trade-off: Rapid growth in recent years has put strain on the state's infrastructure and caused traffic congestion in popular areas like Charleston. While primary residences are taxed at a relatively low rate, vacation homes are taxed at a higher rate.
• Should you move? South Carolina remains a top destination for families and retirees who want coastal access without Florida's higher costs (which are above the national average). The state also frequently ranks as one of the best for military retirees due to veteran benefits.

See also: 10 Cheapest Places to Live in South Carolina

9. Tennessee: Can be affordable despite high growth

Home price-to-income ratio: 4.12

Median property tax bill: $1,442

Cost-of-living (COL) index: 91.9

Tennessee ranks 9th on our list due to its highest home price-to-income ratio of 4.12. The Volunteer State also has the third-highest COL index on our list, at roughly 8% below the national average, per the BEA. Like South Carolina, Tennessee is a top ten destination for new residents, and the median property tax bill of $1,442 reflects that.

• The trade-off: High sales taxes and vehicle registration fees can offset Tennessee's "no state income tax" status, and a competitive housing market is pricing some folks out of popular places like Nashville.
• Should you move? Professionals and families who can bring an out-of-state salary to a high-growth market might benefit from a move. And once you have a home, retirees could prosper with no state taxes on retirement income.

See also: 10 Cheapest Places to Live in Tennessee

10. Alaska: High cost of living and less affordable

Home price-to-income ratio: 3.80

Median property tax bill: $738

Cost-of-living (COL) index: 102.4

Alaska ranks last in affordability among states with low property tax bills, even with an abnormally low median property tax bill of $738. The Last Frontier has the highest COL index on our list (2.4 points above the national average), and the state has the second-highest home price-to-income ratio of 3.80, according to Property Shark.

• The trade-off: While Alaska famously boasts no income tax, fluctuating local taxes require careful planning (for instance, some areas have no property tax, while the median bill is closer to $4,113 in areas that do). The costs of daily essentials are high.
• Should you move? Self-reliant individuals and high-earners in energy or maritime might relocate to Alaska to maximize their space. But if you like city conveniences, the move may not be for you.

Should you move to a state with low property taxes?

A low property tax bill is a significant perk, but it's only one piece of the affordability puzzle. So while the home price-to-income ratio tells you if your salary can support a mortgage in a new state, lower property taxes often make up for that revenue through a higher state sales tax or lower investment in public infrastructure.

You should also weigh other quantitative factors — like COL indices — against qualitative ones, like proximity to family or career opportunities.

Ultimately, the most "affordable" move is one where your income stays comfortably ahead of both the tax collector and grocery bill. Choose wisely.

Read More

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• How to Lower Your Property Tax Bill This Year
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Every year, thousands of people move to Georgia. In 2026, the Peach State remains a top 10 destination for inbound residents according to the latest U-Haul research.*

It's easy to see why: With views ranging from the Blue Ridge Mountains to the historic, moss-draped streets of Savannah, Georgia offers a distinct four-season lifestyle that not many in the U.S. get to enjoy.

Beyond the scenery, the financial forecast might be bright, too. Georgia has continued to be part of the state "flat tax revolution," with Gov. Brian Kemp recently signing legislation that cut the income tax rate to 4.99%.

On top of that, new statewide caps now limit how much your property assessments can rise, and many Georgia residents are seeing rebate checks hitting their mailboxes just in time for summer.

If you're looking to claim your piece of the Peach State without breaking the bank, here are the ten cheapest places to live in Georgia.

*The U-Haul Growth Index is an annual report measuring migration trends through net gain or loss of one-way U-Haul equipment.

Cheapest places to live in Georgia

After Kiplinger ranked property tax bills from highest to lowest per county in Georgia, one trend jumped out: Rural areas are often the cheapest. You’ll typically find a more affordable lifestyle in the country than in, say, the bustle of Atlanta or Augusta.

But if you’re ready to see festivals and state parks, and maybe willing to travel to a city for other amusements, look into these affordable places in Georgia.

Note: Kiplinger used 2026 data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in Georgia to live.

Taylor County

Median property tax bill: $838

Median home price: $87,700

Taylor County property taxes are relatively low, with a median bill of around $840. Home prices, too, tend to be affordable compared with other places in the state at just $87,700, according to the latest data from the Tax Foundation.

Seeking out agricultural simplicity? Taylor could be your sanctuary. The county is famous for its rolling orchards, which boast more than 3,600 acres of sweet Georgia peaches starting in mid-May and transitioning to buttery pecans in the fall.

Beyond the farms, residents have easy access to the great outdoors. You can spend weekends fishing at the Fall Line Sandhills, boating along the Flint River, or checking out the local motorsports park at Silver Dollar Raceway.

Come to Taylor for budget-friendly family fun, but stay for the low property tax bill.

Twiggs County

Median property tax bill: $807

Median home price: $111,300

With the highest median home price on the list at more than $111,000, Twiggs County has a median property tax bill of only $807, per the U.S. Census Bureau. The relatively low tax bill might be due to the county's effective property tax rate of only 0.4% — less than half the national average.

Twiggs is perfect for the discerning resident who wants to save and stay in the heart of it all. Located at the geographic center of Georgia, the county is only 90 minutes from Atlanta and even closer to suburban amenities in Macon.

History buffs can explore the nearby Ocmulgee Mounds National Historical Park, home to ancient trails, and the Museum of Aviation, with its impressive aerospace displays.

If you prefer the water to the woods, Lake Tobesofkee sports 35 miles of shoreline, while the 8,600-acre Bond Swamp National Wildlife Refuge provides a rare opportunity for bald eagle viewing and wetland hiking.

When you're drawn by history or the outdoors, Twiggs County might give you a way to plant roots without breaking the bank.

Jenkins County

Median property tax bill: $797

Median home price: $92,900

Home prices remain relatively competitive in Jenkins County, with the median price tag sitting just under $93,000. Homeowners also enjoy one of the most affordable property tax bills in the region (less than $800), which, according to Tax Foundation data, is lower than all the neighboring counties.

Relocating to Jenkins offers a unique scenic escape centered around Magnolia Springs State Park.

Known for its crystal-clear springs that produce 7 million gallons of water daily, the park is a hub for both nature and history. Residents can stay overnight in cozy cottages, spot alligators along the boardwalk or tackle the bike loop as part of the journey to earn an exclusive T-shirt from the Muddy Spokes Club.

The county's seat, Millen, also serves as a historic railroad hub. Visitors might watch trains from across the state traverse the local depots. For an even slower pace, you can explore the 35-mile Millen-Jenkins County Scenic Byway, which winds through pastoral farmlands and historic sites.

Supposing you're a fan of cycling, quiet nature and keeping your tax bill low, Jenkins County might be the destination for you.

Wilcox County

Median property tax bill: $795

Median home price: $87,600

Located in south-central Georgia, Wilcox County home prices sit comfortably at $87,600, and median property tax bills are around $795, according to the latest data released by the U.S. Census Bureau. This affordability is partly due to the county's low-density charm, with a population that hovers around 8,800 residents.

Don't let the uncrowded nature of Wilcox fool you; for remote workers or retirees searching for small-town tranquility, the area might be a perfect fit. The county seat, Abbeville, is perched along the Ocmulgee River, offering locals prime access for boating and fishing.

On the weekends, you can head to nearby Calhoun Produce for farm-fresh treats and seasonal events or rev things up at the Funny Farm ATV Park.

Whether you're a local thrifter looking for a change of pace or a newcomer wanting to escape the city hustle, Wilcox might provide a great backdrop to save a little extra every month.

Wilkinson County

Median property tax bill: $775

Median home price: $86,300

Homes in Wilkinson tend to have a lower median price compared with the rest of the state, at around $86,300. Property taxes are equally wallet-friendly; according to the latest Tax Foundation data, the median annual bill is $775.

The landscape in the area is unique — picturesque rolling hills sit atop vast kaolin mines. Wilkinson is a global leader in producing this specialized white clay, which is essential for everything from high-end paper and paint to cosmetics.

Despite its industrial importance, the atmosphere remains deeply personal. The community is so welcoming that it has been recognized as a "County of Excellence" by the Association of County Commissioners of Georgia for three consecutive years.

The local culture is also reflected in the annual State Banana Pudding Festival held each spring — a quirky, delicious celebration that brings the whole county together.

Wilkinson also offers plenty of opportunities for hunting, boating and hiking in the area. Come for the low property tax bill, and stay for the neighborhood charm.

Warren County

Median property tax bill: $730

Median home price: $67,100

At only $67,100, Warren County holds the title for the lowest median home price on our list, according to 2026 Tax Foundation data. Even though the county's effective tax rate of 0.8% is close to the national average of about 0.9%, the exceptionally low property values keep the actual median property tax bill for homeowners at a modest $730 per year.

Despite the rural price tag, Warren County is only about 45 minutes west of Augusta — home to the famous Augusta National Golf Club and the world-renowned Masters Tournament.

Residents can enjoy that same sporting spirit closer to home at nearby favorites such as the Ogeechee Valley Country Club or Washington-Wilkes.

If golf isn't your game, there's still plenty to explore. You can join the community at the annual Sportsman's Festival to celebrate local heritage, browse the antique shops in downtown Warrenton, or take a walking tour of the county's beautifully preserved historic district.

Visit Warren County to escape the high cost of city living, and linger for the authentic, small-town Georgia vibes.

Appling County

Median property tax bill: $721

Median home price: $76,700

South of the Altamaha River is Appling County, home to relatively low median home prices of around $76,700. According to the latest U.S. Census Bureau data, the median property tax bill is also fairly modest, at $721.

Paddling along the Altamaha is a favorite pastime for locals, as the river remains one of the largest undammed watersheds on the East Coast. Naturalists might also explore the Moody Forest Natural Area, a 4,400-acre preserve home to 300-year-old longleaf pines and endangered wildlife.

For those who prefer a night under the stars, Falling Rocks County Park offers RV camping a stone's throw from the river.

Lastly, one of the Appling's most unique traditions is the annual Tree Fest in Baxley. Beyond the live entertainment and vendor markets, the festival is one of the few places you can taste a "rosin potato." Cooked in a boiling vat of pine resin, these potatoes are wrapped in newspaper and served with a texture and flavor that locals swear is unlike any other.

If you're looking for a nature-focused community and a budget-conscious bottom line, Appling could be a must-visit for 2026.

Treutlen County

Median property tax bill: $708

Median home price: $100,100

Nestled in the heart of Georgia's timber country, Treutlen County property taxes are relatively low, at barely above $700. Median home prices, however, are slightly higher than those in other places on this list, largely due to the lower inventory of existing Treutlen homes and a recent wave of high-value new builds.

New residents could find themselves in the county seat, Soperton, known as "The Million Pines City." In the 1920s, local farmer James Fowler planted more than 7 million pine trees in collaboration with chemist Charles Herty, proving that pine pulp could be turned into paper. The result revolutionized the Southern economy.

That nature-focused spirit lingers in the area today. Adventure seekers flock to the Ohoopee River, a rare "blackwater" river where tea-colored waters and stark white sandbars create a surreal backdrop for kayaking and fishing.

If you prefer land to water, the county also has some of the most productive hunting grounds in Georgia.

The community hosts the Million Pines Arts & Crafts Festival every November, where you can watch blacksmiths and potters at work, buy hand-woven rugs, or grab a plate of barbecue while listening to live music under the shade of the very pines that made the area known.

Check out Treutlen for the low property tax bill, and stay for a community that helped build the modern-day South.

Atkinson County

Median property tax bill: $625

Median home price: $79,000

About two hours from the bustling "River City" of Jacksonville, Florida, Atkinson County lends a pace of life — and a price tag — that might feel worlds away, according to the Tax Foundation.

With a median home price of $79,000 and a property tax bill of $625, Atkinson is the second-most affordable destination on our list.

Atkinson County is part of Georgia's berry industry, as its landscape is dotted with family-owned farms. During harvest season, the pace of life slows to match the picking cycles, offering a "farm-to-table" lifestyle that comes standard with the county's affordable property taxes.

For a step back in time, visit Pearson to see authentic 19th- and 20th-century houses that illustrate the grit of Georgia's early settlers. If you prefer solitude, the Alapaha and Satilla Rivers provide a peaceful escape.

Whether you're exploring the wetlands or tasting local produce, Atkinson County proves that a $625 tax bill could still buy a rich lifestyle in 2026.

Wheeler County

Median property tax bill: $554

Median home price: $88,200

Wheeler County is the cheapest place to live in Georgia, with a median property tax bill of only $554 and median home prices around $88,200, per 2026 Tax Foundation data.

Life in Wheeler can be water-based. The Little Ocmulgee State Park & Lodge is the county's social and recreational hub, featuring a 265-acre lake perfect for boating and swimming. While the kids enjoy the on-site splash pad, adults can take advantage of the acclaimed Wallace Adams Golf Course, known for its challenging fairways and scenic loblolly pines.

The park also hosts the annual Spanish Moss Festival each September, a weekend of arts, crafts, and live music that celebrates the unique beauty of the South Georgia landscape. If you prefer life in the saddle, the Sweetwater Horse Event Park is a local favorite, offering trail riding, horse training and full RV hook-ups for campers.

The relaxed, nature-focused atmosphere of Wheeler — coupled with the niche equestrian vibe — might just have you saying “yes” to the cheapest place to live in Georgia.

More Cheap Places

• 10 Cheapest Places to Live in Florida
• 10 Cheapest Places to Live in Texas
• 10 Cheapest Places to Live in North Carolina
• 10 Cheapest Places to Live in Tennessee

Millions of people are leaving high-tax states like California and New York, according to recent IRS migration data, and billions of dollars in income are shifting out of both states each year.

In California alone, IRS-based analysis shows roughly $10 billion to $12 billion in adjusted gross income (AGI) has left the Golden State in a recent year, much of it tied to higher-income households.

New York has also seen multibillion-dollar net outflows (about $9.9 billion), particularly from upper-income taxpayers relocating to lower-tax states like Florida and Texas.

At the same time, two new policy developments are reshaping the conversation around what it actually means to “leave” a high-tax state: a proposed wealth tax in California and a second-home tax proposal in New York.

Together, these measures raise a practical question for taxpayers: Does moving from a high-tax state to a low-tax state actually end your tax exposure or actually change how closely it's reviewed by auditors?

California wealth tax coming in 2026?

As Kiplinger has reported, a proposed wealth tax in California is heading to the November 2026 ballot, where voters will decide whether to impose a one-time 5% tax on some ultra-wealthy households.

The measure would apply to a very small number of taxpayers (roughly 250 according to some estimates) at the top of the wealth distribution, based on net worth, including assets like stocks, real estate, and business ownership interests.

Supporters argue in part that the "wealth tax" would raise significant revenue, about $20 billion a year, per the Institute on Taxation and Economic Policy (ITEP) estimates. Critics say it could increase incentives for high-net-worth households to relocate, especially given existing migration trends already showing sustained outflows from the state.

Gov. Gavin Newsom, who opposes the measure, reportedly told the New York Times, “This will be defeated — there’s no question in my mind," referring to the ballot measure.

Also worth noting: Because wealth taxes depend on residency status at the time of assessment, the proposal has also renewed attention on how states determine whether someone is still considered a resident after a move.

New York 'Second-Home Tax' targets luxury property owners

Meanwhile, in New York, Gov. Kathy Hochul and NYC Mayor Zohran Mamdani are working to advance a proposed tax on high-value second homes, often referred to as a "pied-à-terre" tax.

The proposal focuses on luxury properties valued at over $5 million, particularly in high-value urban markets like New York City, that are not primary residences.

Supporters say the annual surcharge would capture revenue from high-end real estate that benefits from city infrastructure and help fund vital public services. In a Tax Day launch video, Mamdani said, “When I ran for mayor, I said I was going to tax the rich — well, today, we’re taxing the rich.”

Opponents argue the measure could discourage investment and further accelerate out-migration from New York among wealthy homeowners.

Interestingly, while structurally different from a wealth tax, the "second home tax" raises a similar issue: how property use and residency status are defined when taxpayers own assets across multiple states.

Residency rules for tax purposes when you move: Why they matter

So what does all of this have to do with relocating?

Moving to a lower-tax state may seem straightforward: change your address, buy a new home, and start fresh. But for tax purposes, due to residency rules, leaving a state like California or New York isn't always that simple.

That's because residency rules determine your status based on where you have established your permanent home (domicile) and how much time you spend in your home state.

It's important to note that residency rules aren’t unique to NY and CA. Every state with an income tax has some version of them, and many rely on similar “facts and circumstances” tests to determine where you reside for tax purposes.

What’s different right now is the spotlight. As more high-income households consider relocating, those rules are getting renewed attention — particularly in states where the financial stakes are rising.

So, how can you potentially still owe taxes to your former state, at least for a period of time? Here are some common situations.

Your "domicile" doesn’t change overnight.

States look beyond a new address to determine where your permanent home really is. If your life remains centered in your old state, it may continue to treat you as a resident.

You're spending too much time in your former state.

Even after a move, crossing the common 183-day threshold in your former state can trigger residency for tax purposes.

Ongoing ties signal you haven’t fully left.

Maintaining a home or holding on to key financial and business connections can work against your claim.

Your daily activity leaves a trail.

In some cases, auditors might review travel logs, credit card records, and even phone location data to determine where you actually spend your time.

The transition year raises questions.

The year you move — when ties overlap, and timing matters most — is often where residency disputes arise.

Here's a simplified example:

A taxpayer moves from California to Florida, buys a new home, and files as a nonresident. But they keep a property in California, spend significant time there, and maintain business ties. If the state determines they didn’t fully break residency — or spent too many days there in California — they could still be taxed as a resident by California on their full income.

To reduce the risk of your former stale's tax bills following you after you think you've left:

• Make the move decisive, not partial.
• Track your days carefully throughout the year.
• Update legal and financial records to match your new state.
• Keep documentation showing when and how you moved.
• Take extra care in the year of the relocation.

Moving to lower tax states: Bottom line

Moving to a lower-tax state can reduce your tax bill, but only if the move holds up under scrutiny. Remember, your residency for tax purposes is generally determined by what you do, not just what you file, and without a clear break, your former state may still have a claim on your income.

Also, keep in mind that no-income-tax states often have to make up for lost revenue elsewhere, so sales and property taxes can sometimes be higher. Consider the tax-tradeoffs of various states before you start packing boxes.

As for what comes next: In California, November could be a key inflection point if voters weigh in. In New York, the path runs through the state’s legislative and budget cycles, where proposals can evolve — or stall — over the coming months. Stay tuned.

Related

• 9 No-Capital-Gains-Tax States Ranked by Cost of Living
• California Wealth Tax Proposal Heads to the Ballot: What It Means for You
• Millions of People Are Moving From High-Tax States Like California and New York: Here's Where They're Going Instead
• States With the Highest and Lowest Income Taxes

With gas prices, grocery bills, and other everyday costs rising, many people are looking for ways to keep more of what they earn and, in some cases, what they invest.

One area to find some relief? Nine states don’t tax capital gains (i.e., the money you make when you sell assets like stocks, a business, or even your home). And on the surface, that can mean keeping significantly more of your money after a big sale.

But that tax advantage on its own doesn’t answer a bigger question: Even with no state tax on capital gains, are these states actually less expensive places to live?

In many cases, the answer depends on "everything else," like housing costs, property taxes, insurance, and essential expenses that can eat into gains savings.

So, here’s how the nine states with no state-level capital gains tax stack up when you factor in the 2026 cost of living.

States with no capital gains tax ranked

To show whether the no-capital-gains-tax advantage translates into real-world affordability, we ranked the states primarily using the latest available cost-of-living data (BEA regional price-parity data), with housing trends (median home prices) and state and local tax burdens (sales and property taxes) factored in.

We also considered everyday expenses, like food, fuel, and housing, to assess how much capital gains tax savings might be offset in practice.

States with cost-of-living index scores below 100 are generally cheaper than the national average, while those above 100 are more expensive.

No-capital-gains tax states cost of living

The comparisons below focus on typical statewide costs and tax structures. However, costs will always vary by household and depend on housing choices, spending habits, and individual tax situations.

So, when in doubt, consult a qualified and trusted tax professional or financial planner about how different tax landscapes might impact your personal financial situation.

1. Missouri: Low housing costs with broad capital gains relief

Cost of Living Index: 88 | Median Home: ~ $285K

Property tax: Approx. 0.8%

Sales tax: 4.2% state + 3–5% local

Tax structure: Missouri allows individuals to deduct 100% of capital gains from Missouri taxable income.

Tax challenge: Missouri’s low cost of living and relatively affordable housing make it attractive on paper, but the state still relies heavily on sales and property taxes. As a result, everyday spending and local tax bills can chip away at your capital gains savings.

Tax tip: The Show-Me State can be especially attractive from a tax perspective if your capital gains are large, but your overall spending remains modest. And lawmakers are considering a proposal that could eventually eliminate the state's income tax.

For more information, see: Another State Could End Income Tax in 2026.

2. Tennessee: No income tax but rising urban costs

Cost of Living Index: 91 | Median Home: ~$350K

Property tax: Approx. 0.6%

Sales tax: 7% state + up to 2.75% local

Tax structure: No state income or capital gains tax

Tax challenge: In fast-growing cities like Nashville, rising home prices, combined with some of the highest sales tax rates in the country, mean that "no income tax" doesn't automatically translate into low monthly costs for some residents.

Tax tip: Avoiding the fastest-growing and most expensive areas of Tennessee might help if you're worried about housing costs. That, in turn, could help you realize more of the tax benefits the Volunteer State has to offer.

For more information, see: 10 Cheapest Places to Live in Tennessee.

3. South Dakota: Low-cost living with zero investment taxes

Cost of Living Index: 89 | Median Home: ~$310K

Property tax: Approx. 1.2%

Sales tax: 4.2% state + 2–3% local

Tax structure: No state income or capital gains tax

Tax challenge: According to an Institute on Taxation and Economic Policy (ITEP) analysis, sales taxes in the Mount Rushmore State bear part of the revenue burden. So, for some residents, everyday spending (groceries, fuel, basic goods) carries more weight over time, even without a personal income tax.

Tax tip: If your financial picture is built around big, infrequent gains rather than daily spending, South Dakota’s tax structure can stretch your savings further.

4. Texas: No capital gains tax but high property taxes

Cost of Living Index: 94 | Median Home: ~$340K

Property tax: Approx. 1.6%–1.9%

Sales tax: 6.25% state + up to 2% local

Tax structure: No state income or capital gains tax

Tax challenge: Property taxes in the Lone Star State effectively replace income taxes. That means even after a big financial gain, ongoing housing costs remain relatively high and predictable year after year

Tax tip: Run a property‑tax estimate before you buy, because that cost can narrow the benefit of Texas having no capital gains tax, and check out our report on the cheapest places to live in Texas.

5. Wyoming: No income or capital gains tax with below-average costs

Cost of Living Index: 92 | Median Home: ~$340K

Property tax: Approx. 0.55%

Sales tax: 4% state + up to 6% local

Tax structure: No state income tax and no capital gains tax

Tax challenge: Property taxes remain relatively low on average, but Tax Foundation and NAR regional data show that local costs in Wyoming can shift quickly by county, especially in higher-demand energy and recreation areas.

Tax Tip: If you're considering the Equality State, your monthly housing costs might be more manageable over time because property taxes are lower than in most states.

6. Nevada: Tax-free gains in a higher-cost state

Cost of Living Index: 105 | Median Home: ~$450K

Property tax: Approx. 0.6%–0.7%

Sales tax: 6.85% state + 1–3% local

Tax structure: No state income or capital gains tax

Tax challenge: Housing and services in Las Vegas and Reno have climbed above national averages, and combined with sales taxes, the everyday cost of living reduces how far those gains stretch in the Silver State.

Tax tip: Nevada can be most effective for people realizing occasional large gains, since that’s where the lack of state income tax generally has the most significant impact.

7. Florida: No income tax but rising insurance costs

Cost of Living Index: 102 | Median Home: ~$410K

Property tax: Approx. 0.8%–1.1%

Sales tax: 6% state + up to 2% local

Tax structure: No state income or capital gains tax

Tax challenge: The real cost pressure in the Sunshine State is insurance. According to the Florida Office of Insurance Regulation, premiums have surged in many areas due to hurricane risk, meaning total housing costs (taxes + insurance) can rise well beyond what the absence of income tax would suggest.

Tax tip: If you're considering Florida as a place to live, price homeowners' insurance early and compare carriers, because that can change the affordability picture, even with zero personal income tax.

For more information, see: Florida Tax Trade-Off: Why 0% Income Tax Doesn’t Always Mean Cheaper in 2026.

8. New Hampshire: No wage tax but high housing costs

Cost of Living Index: 110 | Median Home: ~$500K

Property tax: Approx. 1.9%–2.1%

Sales tax: 0%

Tax structure: No tax on wages or capital gains

Tax challenge: Simplicity in the Granite State's tax landscape comes with high fixed costs. Property taxes are among the highest in the country, according to the Tax Foundation, and limited housing supply pushes prices up, especially in commuter areas tied to Boston, per NAR data.

Tax tip: New Hampshire can work from a tax perspective if your priority is to avoid income and sales taxes, but you are comfortable with property taxes taking a meaningful share of your savings over time.

9. Alaska: No income tax but higher everyday prices

Cost of Living Index: 99 | Median Home: ~$390K

Property tax: Approx. 1.0%

Sales tax: 0% state + 1–3% local (varies)

Tax structure: No state income or capital gains tax

Tax challenge: Imported goods and fuel costs can drive up everyday spending in Alaska, meaning even with low taxes, your budget can feel more stretched in ordinary purchases.

Tax tip: Alaska’s Permanent Fund Dividend program can partially offset higher costs for some, making net income in the Last Frontier State surprisingly competitive.

Washington State: The no income tax state with a catch

Cost of Living Index: Above average in major metros

Property tax: Approx. 0.9%

Sales tax: 6.5% state + 2–4% local

Tax structure: Washington doesn’t make the main ranking because it doesn’t really fit the “no capital gains tax” grouping. That's because, while the state has no broad-based personal income tax, Washington has a state capital gains tax that applies to gains exceeding a certain threshold (7% on gains over $250K for 2026).

And, as Kiplinger reported earlier this year, the Evergreen State enacted a new 9.9% millionaires' tax set to take effect in 2028.

Tax challenge: For most residents, Washington still feels like a low‑tax environment because they don’t pay state income or capital gains tax. But high‑earning investors can face a very different picture when they sell large positions or cross income thresholds.

Tax Tip: Run a scenario that includes both the state capital gains tax and the new 9.9% millionaire tax so you can see whether your specific income and gain profile still benefits from Washington’s lack of a broad‑based personal income tax.

Are no-capital-gains-tax states cheaper? Bottom line

States with no capital gains tax can meaningfully increase your after-tax returns, but it’s only one piece of the equation when you're considering places to live.

Once property taxes, sales taxes, housing costs, insurance, and everyday expenses are factored in, the states with the biggest tax advantages aren’t always the ones where your money actually goes the furthest.

And don't forget about federal capital gains tax rates, which don't depend on where you live, but rather on the type of asset, your federal taxable income, and how long you held the property sold.

Related

• 9 States With No Income Tax Ranked by Cost of Living
• Capital Gains Tax Rates for 2026
• Why Millions of People Are Leaving High-Tax States
• New Wealth Taxes Could Drive Residents Out of Some States: But Will You Still Owe Taxes After You Leave?

Although the April 15 IRS tax deadline has passed, taxpayers in Delaware, Iowa, Virginia, Louisiana, and South Carolina are still on the hook for their state returns — or have just received extra time.

It has been a tumultuous tax season. The 2025 Trump tax bill not only overhauled federal rules but also prompted state lawmakers to wrestle with whether to adopt federal tax code changes.

While these updates may have yielded new tax savings for some taxpayers who live in states that adopted them, the new rules also led to state refund delays, even leading one state tax agency to move its filing deadline as far as October.

So, when is your state tax return due? If you live in one of these states, here's who needs to file by April 30, which taxpayers have more time, and state tax policy to watch as we move further into 2026.

April 30 deadlines: Delaware and Iowa state taxes are due

The two states with income taxes due by April 30, 2026, are Delaware and Iowa. Even though the federal deadline passed on April 15, residents in these states have until the end of the month to finalize their state returns.

"The Iowa Department of Revenue is once again reminding Iowans of the many resources available that can assist taxpayers with filing their tax return," noted Iowa's DOR in a press release, "[State] income tax returns are due on April 30."

What is due by April 30, 2026?

• Individual state tax returns. Both final filings and any tax payments owed.
• Estimated state tax payments. The first quarter installment for the 2026 tax year (in Iowa only; Delaware's estimated payments were due April 15).

Federal estimated tax payments were due April 15, 2026.

Virginia and Louisiana state income tax returns are due May 2026

Taxpayers in Virginia and Louisiana have even more breathing room, with state tax deadlines stretching into May 2026.

• Virginia residents have until May 1, 2026, to file state income tax returns.
• Louisiana taxpayers have until May 15, 2026, to submit their state returns.

What is due in May 2026?

• Individual state income tax returns. Final filings and payments for both Virginia and Louisiana.
• State business tangible property tax returns. This includes returns for specific jurisdictions in Virginia, like Arlington County.

South Carolina taxpayers have a special extended tax deadline for the 2026 tax season that extends beyond May (more on that later).

2026 mail rules for filing state tax returns

You may file by mail or electronically, but most state tax agencies recommend the latter. Not only does e-filing typically yield quicker processing than for paper returns, but it also bypasses the risks associated with the new USPS postmark rule.

Under this new policy, physically mailed returns are often not postmarked until they reach a regional processing center. If you mail your return on the deadline date, your state income filing might not be stamped until the following day, potentially leading to late-filing penalties.

Note on state tax extensions: If you can't file on time, you should file for a state tax extension (which usually pushes your tax filing due date until October 15 or later). This differs from the federal extension, which should have been requested by April 15.

But remember, an extension to a file is not an extension to pay. Be sure to estimate and pay your tax liability by the state deadline to avoid any late-payment interest and penalties.

New tax law changes for states in 2026

As mentioned, several states adopted federal changes from the 2025 Trump tax bill, which are now impacting the 2026 state tax season.

Of the states with April 30 deadlines (or later), conformity varies:

• Delaware: partially conformed, decoupling from business expense provisions and some individual deductions like "no tax on tips."
• Iowa: rolling conformity, adopting most major federal tax changes automatically.
• Louisiana: partially conformed, decoupling from certain business expense deductions.
• Virginia: partially conformed, including the temporary adoption of an increased standard deduction.

What does this mean for you? In many cases, the Trump tax law changes might lend higher tax savings on some state returns (e.g., if you were a worker who qualified for the federal overtime tax deduction).

However, in states that did not conform to these individual tax breaks — like South Carolina — you may be required to "add back" those deductions on your state return, even if you claimed them on your federal filing.

South Carolina 2026 tax extension deadline: October 15

South Carolina state lawmakers debated whether to conform or decouple from the Trump tax law changes for most of the 2026 tax season. As a result, the processing of state income returns for early filers was delayed, and the state return deadline was eventually extended.

"We are automatically extending the tax filing due date for all 2025 South Carolina Individual Income Tax returns to October 15, 2026," the South Carolina Department of Revenue acknowledged in a recent release. "This extension applies only to the deadline to file your return, not to pay what you owe."

The new Trump tax law changes were enacted federally after many states had already concluded their summer legislative sessions. As such, more states may decouple or conform to federal tax policy when legislatures meet for their regular sessions in the next few months. What comes out of those sessions may ultimately impact how much you owe in 2026 state income taxes.

Stay tuned for updates.

Read More

• 5 Reasons Your Tax Refund Might Be Delayed and How to Fix It
• Does Your State Have an IRS Disaster Extension?
• 2026 State Tax Changes to Know Now
• IRS Tax Refund Schedule 2026: When Will Your Refund Arrive?

Missouri is moving toward a major tax decision that could be decided by voters: whether to essentially eliminate the state income tax and replace much of that revenue with higher sales taxes.

The stakes are significant. Missouri’s individual income tax raises roughly $8.5 billion to $9 billion each year — about 60% to 65% of state general revenue — and is the largest source of funding for schools, public safety, and core state services. If the income tax is phased out, most of that revenue would likely be replaced through expanded reliance on sales taxes.

Missouri’s move comes as several other states, including Kentucky, Mississippi, and Oklahoma, have also cut or plan to phase out their income taxes, making the Show-Me State part of a growing national debate over how much states should rely on income taxes.

A central question for voters is this: with no state income tax, who really ends up paying more, and how much will it cost households at the register?

Missouri income tax elimination could follow capital gains tax change

Missouri’s willingness to make sweeping tax changes was already on display last year when it eliminated state taxes on capital gains.

• As Kiplinger reported, that policy, effective as of the 2025 tax year, removed taxes on profits from stock, bond, and other investment sales.
• The measure reportedly cost the state roughly $300 million to $500 million in annual revenue, depending on market conditions.

Now, the question is whether Missouri will go further and end the broad‑based income tax altogether.

As mentioned, Missouri’s individual income tax accounts for roughly 8 billion dollars a year and helps fund schools, public safety, and many core state services. If the income tax is phased out, most of that revenue would need to be replaced by a greater reliance on sales taxes and other changes to the state budget.

Meanwhile, Missouri’s current state sales tax rate is 4.225%, according to the Department of Revenue, though many residents pay more once local taxes are added.

Under the leading proposals, the state would gradually reduce the income tax over several years, with reductions tied to revenue triggers intended to avoid sudden budget chaos.

Missouri Income tax rate 2026: What a change would mean for residents

Right now, Missouri's 2026 individual income tax tops out at 4.7% on taxable income over $9,436 (Single filers; brackets start at 0% up to $1,348, then climb in approx. 0.5% steps).

If the no-income tax plan advances, the practical impact for most Missouri households would be:

• Lower withheld income tax and higher take‑home pay, especially for wage earners
• Higher prices on many goods and services if sales tax rates rise or the taxable base expands
• A shift from being taxed primarily on earnings to being taxed more on spending

Because sales taxes are collected at the register, many residents would feel the tax burden on a daily basis, and many say the ultimate effect would also be uneven.

That's because studies show that households with lower and middle incomes, which often spend a larger share of their income on taxable goods and services, would likely feel the change more heavily than wealthier households whose income is typically more tied to savings or investments.

Proponents and critics: Who wins and who pays

Supporters of the income‑tax‑to‑sales‑tax shift argue that the measure would make Missouri more competitive with no‑income‑tax states like Texas and Florida, reduce reliance on taxing wages, and simplify the tax code over time.

They point to the recent elimination of capital gains taxes as proof that the state is comfortable shifting away from taxing certain forms of income and moving toward a more investment‑friendly system.

Gov. Mike Kehoe has become a leading supporter of phasing out Missouri’s income tax.

In his 2026 State of the State address and subsequent public comments, Kehoe called for the plan to be placed before voters through a constitutional amendment.

He has argued that Missouri’s tax structure "should modernize for the times we’re in and not be burdened by a tax code written in another era," framing the income‑tax elimination as a central part of his economic agenda.

However, some opponents of the measure, including the nonprofit Missouri Budget Project (MBP), warn that replacing roughly $8.5-$9 billion in annual income-tax revenue with higher sales taxes will sharply increase tax rates and potentially force cuts to essential public services.

In a piece on its website regarding the impact of such a proposal on the state's rural communities, MBP writes the following.

"Missouri’s income tax supports nearly 2/3 of Missouri’s state general revenue budget – a critical state funding source for K-12 schools, mental health services, children’s services like childcare and foster care, and services for older adults like Meals on Wheels and respite care. There’s simply no realistic way to make up the revenue lost from eliminating the income tax – meaning harmful cuts to services for Missourians."

• A key argument is that sales‑based taxes tend to fall more heavily on lower‑income households
• That could deepen inequality and make the state's tax system less progressive.

Also worth noting: Missouri’s experiment could also influence how other states frame their own debates over reliance on income taxes, especially as more states look to cut or phase out their personal income tax.

Missouri income tax elimination bill: What happens next

The measure, HJR 173/174, has passed both legislative chambers and awaits Gov. Kehoe's decision by May 22 on whether to place it on the November ballot.

• If it goes to voters, a "yes" vote would begin a multi‑year phaseout of the income tax and a gradual pivot toward relying more on sales taxes.
• That could mean modestly lower income‑tax bills for many households, but also higher everyday costs at the register, especially for those who spend the largest share of their income on taxable goods and services.

For residents, the core takeaway is this: Missouri gave itself a trial run on big tax changes by eliminating capital gains taxes last year. If approved, this next step could be even bigger.

Missouri’s experiment could also influence how other states frame their own debates on income taxes, especially as more look to cut or phase out personal income tax. So, stay tuned.

More on State Taxes

• States With the Highest and Lowest Tax Rates in 2026
• Missouri Eliminates Capital Gains Tax: What It Means for You
• 9 States With No Income Tax Ranked by Cost of Living

Property taxes are a financial strain for many, but are one of the largest sources of funding for local governments in Ohio.

These levies generate roughly $24 billion annually for local governments and help finance schools, police and fire departments, infrastructure, parks, libraries, and more in the Buckeye State.

But now, a proposed constitutional amendment that organizers are trying to qualify for the November 2026 ballot would, if approved, abolish property taxes statewide, as early as next year.

In petition materials supporting the Ohio ballot initiative to eliminate property taxes, organizers wrote: “Property ownership in Ohio feels more like renting from the government, hindering true ownership. This limits our freedom, obstructs wealth transfer to future generations, and keeps families in poverty.”

If passed by voters, the measure could translate into major savings for homeowners but pose fiscal challenges for local services and government budgets.

That’s why some Ohioans are sounding alarms. Here's more to know.

Ohio property tax rate

Ohio’s property tax system is layered.

Residential property is taxed on 35% of its appraised market value, which becomes the taxable value. Local tax rates — including those set by school districts, counties, municipalities, and special levies — are then applied to that value.

The effective property tax rate in Ohio averages roughly 1.3% to 1.6% statewide, above the national average, according to the Tax Foundation.

Here’s an example of how a property tax bill stacks up for a "typical homeowner."

In that simplified example, homeowner property taxes total roughly $3,300–$3,500 per year. And if Ohio property taxes are eliminated, that bill could drop to $0.

But…the revenue would still need to be replaced to effectively fund schools and other important local services.

Ohio proposed property tax changes: Who benefits?

According to reporting on the ballot effort, here's who stands to benefit if Ohio eliminates property taxes.

• Owner‑occupied homeowners would likely see the largest direct savings, especially in urban and suburban areas where property taxes tend to be higher.
• Those with rapidly rising assessments — whose bills have outpaced income growth — would also benefit from property tax relief.
• Investors and commercial property owners would benefit as well, though the net economic impact would depend on how replacement taxes are structured.

However, the full impact of ending property taxes in Ohio would depend on how lawmakers address the revenue loss. Right now, it's unclear exactly what the replacement plan would be.

If not property taxes, where would revenue come from?

Some analysts warn that eliminating property taxes without a clear replacement strategy could create massive shortfalls in local budgets.

A state Office of Budget and Management analysis suggests Ohio could lose about $24 billion in property tax revenue annually if property taxes are abolished.

Possible replacement revenue sources could include:

• Higher statewide sales taxes
• Expanded or increased state and local income taxes
• State budget subsidies or revenue sharing to local governments
• New local tax options or service fees

Each option comes with trade‑offs, and some policymakers caution that shifting the burden away from property taxes could disproportionately affect households with low or middle incomes.

For example, a Tax Foundation analysis suggests that if Ohio eliminated property taxes and replaced them with income taxes, the statewide rate could average around 12.6%. That number could climb above 13% in some counties, with extreme estimates as high as 27%.

Other analyses suggest that eliminating property taxes could require much higher sales tax rates, depending on the mix of alternatives chosen.

Could local services be harmed?

It's important to know that in every state, property tax revenue helps support several essential state services.

Public Schools: Property taxes fund the majority of many local school budgets. Cuts could lead to larger class sizes, program reductions, or teacher layoffs.

Police and Fire: Emergency services in cities and towns rely on property tax levies for staffing and equipment.

Infrastructure: Maintenance of roads, bridges, and local public works projects depends on steady tax revenue.

Libraries, Parks, and Community Programs: These services often operate on tight budgets funded significantly by property tax levies.

As a result, some local officials have described the potential loss of property tax revenue as "catastrophic" for many jurisdictions, because it could force deep cuts in essential services.

Several schools, first responders, and local officials have mounted opposition through the coalition Ohioans to Protect Public Services.

On its website, the group states: "Eliminating property taxes sounds simple. In reality, it creates chaos that will hurt every family, every community, and every paycheck."

The group points out that a move to end property taxes could "wipe out $20 billion in critical services," including those for older adults, at-risk youth, and public health services.

Current Ohio property tax relief

In response to calls for property tax relief, Ohio has recently enacted several reforms.

In December of last year, Gov. Mike DeWine signed five bills intended to limit future property tax increases and expand homeowner tax credits.

Those measures are projected to deliver more than $3 billion in savings for Ohio property owners, according to state estimates.

• One measure expands a state owner‑occupancy credit that gradually increases relief for homeowners over several years.
• Other measures cap increases tied to reappraisals and give counties greater oversight over tax rates.

What Ohio homeowners can do now

If you’re a homeowner watching the Ohio property tax debate:

Review your property tax bill and exemptions. You might qualify for credits or be able to appeal your property tax valuation.

Attend local budget hearings to understand how property tax revenue is being used.

Monitor the signature drive. Petitions are still circulating as organizers work to meet certification requirements for the November 2026 ballot.

Also worth noting: Ohio voters will soon elect a new governor, since Gov. DeWine is term-limited. The 2026 Ohio gubernatorial election is set for November 3, 2026, so discussions about tax relief will likely continue in the coming months.

Ohio property tax debate: Bottom line

Ending property taxes in the Buckeye State could deliver savings for homeowners, but it would also remove one of the state’s most important revenue sources.

Note: Grassroots organizers are still collecting the required signatures for certification, so it's unclear whether the proposal will qualify for the 2026 ballot.

But Ohio isn't alone in considering abolishing property tax. Other states, including Florida, as Kiplinger has reported, have recently considered similar proposals. For more information, see our report: Florida Wants to Eliminate Property Taxes.

And whether the replacement comes through higher sales taxes, higher income taxes, or cuts to core services, someone will ultimately pay the price. So, stay tuned.

More on Property Taxes

• 10 States With the Highest Sales Tax
• 3 States Consider Eliminating Property Taxes This Year
• How to Lower Your Property Tax Bill

Now that Tax Day has passed and many people are taking a closer look at how much they owed the IRS or may have received as a refund, one question comes up again and again: Would I pay less tax somewhere else?

For most people, the answer isn’t straightforward.

That's partly because state taxes vary widely across the country, from places with no income tax at all to states with some of the highest top rates in the nation. But as with the overall cost of living, your true tax burden depends on more than just one number.

Property taxes, sales taxes, and the structure of your income can all significantly affect how much you actually pay.

So, if you're looking for a tax-friendly place to live, here’s a closer look at states with the highest and lowest tax rates in 2026 — and what those differences could mean for your wallet.

State Tax Rates 2026

Tax burden and comparative classifications (including high, moderate, and low relative descriptors) are generally based on the 2026 Tax Foundation state tax burden index.

Cost-of-living comparisons of no-income-tax states generally use the most recently available U.S. Bureau of Economic Analysis (BEA) regional price parity (RPP) data.

Property tax rates are approximate effective rates based on assessed home values and can vary depending on local assessment practices.

Remember: In any state, your actual costs will depend on your income, housing choices, spending habits, tax deductions, credits, and exemptions, as well as local prices.

States with the highest income tax in 2026

The following states have some of the highest top income tax rates and generally rank above average in overall tax burden and state income tax rates.

*States are listed alphabetically, not by rank, within each group.

California

income tax rate: 13.3%

Sales tax: About 8.5%–10.5% combined

Property taxes: Approx. 0.7%–0.9%

California has the highest top marginal income tax rate in the country. While property taxes are limited by state law, high sales taxes and elevated housing costs significantly increase overall expenses.

Why it matters: Even for middle-income households, high housing costs and sales taxes raise the baseline cost of living in the Golden State.

Connecticut

Top income tax rate: 6.99%

Sales tax: 6.35%

Property taxes: About 1.7%–2.1%

Connecticut combines moderate-to-high income, sales, and property taxes across the board.

Why it matters: Overall tax burden in the Constitution State is driven by a combination of income, sales, and property taxes, none of which are the highest nationally, but are elevated relative to many other states.

New Jersey

Top income tax rate: 10.75%

Sales tax: 6.6%

Property taxes: Approx. 2.1%–2.3% (highest in the U.S.)

New Jersey’s tax profile is dominated by exceptionally high property taxes, which affect homeowners across all income levels.

Why it matters: For some Garden State households, property taxes can function almost like a second housing payment layered on top of a mortgage.

New York

Top income tax rate: 10.9%

Sales tax: Approx. 8%–9% combined

Property taxes: About 1.4%–1.8%

New York combines high income taxes with above-average sales taxes and some of the highest property taxes in the country, particularly outside New York City.

Why it matters: Total tax burden can shift significantly depending on where you live within the Empire State, especially for homeowners.

Massachusetts

Income tax: 5% + 4% surtax over $1M

Sales tax: 6.25%

Property taxes: About 1.0%–1.3%

Massachusetts uses a flat income tax but applies an additional surtax on high earners.

Why it matters: A flat income tax structure can still produce a steep effective tax increase in the Old Bay State once income crosses key thresholds.

Do no-income-tax states really save you money?

Even among states with no income tax, i.e., Texas, Florida, Tennessee, Washington, Nevada, New Hampshire, South Dakota, Alaska, and Wyoming, total tax burdens vary widely.

That’s because these states still rely on:

• Sales taxes (often 5%–10% combined)
• Property taxes (Approx. 0.3%–2.3% depending on the state)
• Select local and specialized taxes

For example:

• Texas and New Hampshire rely heavily on property taxes, raising housing costs
• Tennessee and Nevada rely more on sales taxes, increasing everyday spending
• Alaska has no state income or sales tax, but higher overall living costs based on BEA data
• Washington now has capital gains taxes on high earners as well as a newly enacted surtax on income over 1 million.

Why it matters: Eliminating income tax shifts, rather than removes, the tax burden, often onto housing or consumption (via sales taxes).

That brings us to the states with the lowest income tax.

5 lowest income tax states in 2026

The following states rank among the lowest in overall tax burden based on sales tax, property taxes, and cost of living.

Florida

Income tax: None

Sales tax: Approx. 7%–7.5%

Property taxes: About 0.8%–1.1%

Florida remains tax-friendly, though rising housing and insurance costs are eroding affordability.

Why it matters: Housing and insurance costs in some areas of the Sunshine State can reduce the overall benefit of having no state income tax.

South Dakota

Income tax: None

Sales tax: Approx. 6%–6.5%

Property taxes: About 1.2%–1.4%

South Dakota maintains relatively balanced low-to-moderate taxes across categories.

Why it matters: The lack of a state income tax, combined with moderate sales and property taxes, helps keep the overall tax burden in the Mount Rushmore State relatively low.

Tennessee

Income tax: None

Sales tax: Approx. 9%–9.5% combined

Property taxes: About 0.5%–0.7%

Tennessee has no income tax and relies heavily on sales taxes, which are among the highest in the country.

Why it matters: Lower housing taxes help homeowners in the Volunteer State, but everyday purchases carry a higher tax burden.

Texas

Income tax: None

Sales tax: Approx. 8%–8.25% combined

Property taxes: About 1.6%–2.1%

Texas replaces income tax with some of the highest property taxes in the U.S.

Why it matters: Homeownership costs in the Lone Star State often determine total tax exposure more than income does.

Wyoming

Income tax: None

Sales tax: Approx. 5.5%–6%

Property taxes: About 0.6%–0.7%

Wyoming has one of the lowest overall tax profiles in the country.

Why it matters: Low taxes across income, sales, and property contribute to the Equality State having one of the lowest overall tax burdens in the country.

States that fall in the mid-range on taxes

The following states have moderate overall tax burdens, without the high rates of top-tax states or the clear tax advantages of no-income-tax states.

Alaska

Income tax: None

Sales tax: None statewide (local taxes vary)

Property taxes: Approx. 1.1%–1.3%

Alaska has no state income or sales tax, but overall living costs tend to be higher than the national average, according to BEA regional price data.

Why it matters: Despite having no state income or sales tax, overall living costs in the Last Frontier State are higher than the national average, according to BEA data.

Pennsylvania

Income tax: 3.07% flat

Sales tax: 6%

Property taxes: Approx. 1.3%–1.6%

Pennsylvania’s flat income tax is simple, but local and property taxes vary widely.

Why it matters: Local income taxes and property tax differences can significantly affect the Keystone State's total tax burden despite its flat income tax rate.

Nevada

Income tax: None

Sales tax: Approx. 8.1%–8.4%

Property taxes: About 0.6%–0.7%

Nevada remains tax-friendly, but rising housing costs in major metros are driving up overall expenses.

Why it matters: Tax structure advantages in the Silver State can be diluted by housing inflation.

New Hampshire

Income tax: None on wages

Sales tax: None

Property taxes: About1.8%–2.1%

New Hampshire has no income tax or sales tax, but among the highest property tax burdens in the country.

Why it matters: Housing costs are the primary tax pressure point in the Granite State.

Washington

Income tax: None on wages

Sales tax: Approx. 9.2%–10.4% combined

Property taxes: 0.8%–0.9%

Other taxes: 9.9% new tax on annual income over 1 million, capital gains tax on high-earner investment income

Washington doesn't have a broad-based personal income tax, but offsets it with high sales taxes and targeted taxes on high incomes, including a capital gains tax on high earnings and a newly enacted surtax on millionaires.

Why it matters: Tax advantages in the Evergreen State depend heavily on income level.

Bottom Line

How to compare state taxes before you move

State tax rates vary widely, but no single number tells the full story. If you’re comparing states or considering a move, it helps to evaluate:

• Income taxes avoided
• Property and sales tax burden
• Cost-of-living differences

In some cases, no-income-tax states offer meaningful savings. In others, those savings are offset by higher property taxes or higher everyday costs.

Maybe the better question when figuring out where to live this year isn’t which state has the lowest taxes — it might be where you’ll keep the most money after all taxes and expenses are combined.

More on State Tax

• 9 No-Income-Tax States Ranked by Cost of Living
• States with Low and No Capital Gains Tax in 2026
• Retirement Taxes: How All 50 States Tax Retirees
• Another State Could End Income Taxes in 2026: What to Know

Who doesn't love strolling cobblestone streets after a hearty meal of shrimp and grits? Well, maybe some don't — but the millions of people flocking to Charleston every year suggest otherwise.

Between the sun-drenched beaches and the rich cultural history, it's no wonder many vacationers start wondering what it would actually take to call the Palmetto State "home."

Long regarded as a retiree's paradise, South Carolina's biggest draw remains its incredibly low property taxes, which are some of the lowest in the nation. Plus, no "death tax" in the state means your heirs have more wealth to hold onto.

So if you're looking to make the move without breaking the bank, here are the ten cheapest places to live in South Carolina right now.

Cheapest places to live in South Carolina

After ranking property tax bills from highest to lowest per county in South Carolina, you can bet on one thing: Rural areas win out. You'll typically find a lower cost of living in the countryside than in the hustle and bustle of a big city.

But if you want to cash in on historic sites, state parks, and motor speedways (and maybe want to commute for other enjoyments), check out these cheap places to live in South Carolina.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in South Carolina to live in.

Williamsburg County

Median property tax bill: $687

Median home price: $104,500

Williamsburg homes are pretty affordable, with a median home price of around $104,500. Property tax bills can be cheap too, sitting right under $690 per 2026 data released by the Tax Foundation.

If you have dreams of living in Charleston but want the feel of a small town, Williamsburg may be perfect for you, according to the county's Economic Development Board. The area features historic homes dating back to the 1700s, backdropped against southern magnolias and pine forests.

Residents enjoy fishing, hiking, and paddling at the new Black River State Park, shopping at the local farmer's market, or exploring historic ties at the Williamsburgh Society Museum. Plus, you're about a 90-minute drive from Myrtle Beach and Charleston.

Come to Williamsburg for down-home southern comfort and charm, and stay for the relatively low property tax bills.

Allendale County

Median property tax bill: $669

Median home price: $76,200

Allendale has the lowest median home price on our list, at only $76,200. The median property tax bill is also relatively cheap at just $669, according to the latest data from the U.S. Census Bureau.

Allendale County remains one of the most budget-friendly entry points in South Carolina, though it’s a choice that requires a love for true rural isolation.

In the summer, residents head to Barnwell State Park for lakefront swimming and fishing. As the humidity drops in the fall, the area becomes an explorer’s playground — from the walking trails at Burton’s Ferry Bridge to the world-renowned archaeological discoveries at the Topper Site.

If you have the flexibility of a remote job and a desire to trade the hustle for a significantly slower pace, you might consider relocating to Allendale County, South Carolina.

Darlington County

Median property tax bill: $652

Median home price: $158,200

Home prices are relatively low in Darlington; the median price tag is hardly above $158,000. The median property tax bill is also cheap — less than $655 — according to the Tax Foundation.

Most people know Darlington County for one thing: "The Track Too Tough to Tame." As home to NASCAR’s oldest superspeedway, the county pulses with energy twice per year, drawing over 47,000 fans to the area. But once the engines quiet down, you’re left with one of the most affordable and hospitable regions in the Pee Dee.

You can trade the asphalt for the cypress-lined boardwalks of Williamson Park or take a walking tour through one of the county’s five nationally recognized historic districts, where massive oaks and antebellum architecture define the landscape.

Whether you’re here for the adrenaline of the Southern 500 or the quiet beauty of the South Carolina botanical trails, Darlington County proves you don't have to sacrifice culture for cost.

Cherokee County

Median property tax bill: $614

Median home price: $142,000

Named after the Cherokee people who inhabited the land, the county tends to have a lower median price, at around $142,000. Property taxes can be relatively affordable as well, with a median bill of $614, according to the latest 2026 data from the U.S. Census Bureau.

History buffs — especially those with an interest in military strategy — will find a lot to love in Cherokee County. This is the home of the Kings Mountain National Military Park, the site of the battle Thomas Jefferson famously called "the turn of the tide of success" during the Revolutionary War. Today, the county keeps that spirit alive through lantern tours along campaign trails, war demonstrations, and visitations to colonial-era sites.

But it’s not all about the past; the area boasts a vibrant modern culture, from the seasonal productions at a local theater to the South Carolina Peach Festival, which transforms the city of Gaffney into a hub of live music and carnival fun every July.

If you’re looking for deep-rooted heritage and a community that celebrates its "peachy" local flavor, Cherokee is a top-tier budget pick.

Lee County

Median property tax bill: $599

Median home price: $104,600

Located in the Pee Dee region, Lee has relatively low home prices, with a median of around $104,600. Property tax bills are barely shy of $600, per the latest information from the Tax Foundation.

Lee County is a place that proves art can grow anywhere. The region is home to the world-renowned Pearl Fryar Topiary Garden, a three-acre "living" masterpiece of hope and inspiration.

Following the legendary artist's passing in early April 2026, his work has become a rallying point for the community; now preserved by a local nonprofit, the garden remains a sanctuary for those who find peace in horticulture and grassroots creativity.

The beauty extends beyond the garden to the banks of the Lynches River and the sprawling trails of Lee State Park. It’s a quiet, rural lifestyle, but the area is currently seeing a modern spark; the county seat of Bishopville is undergoing a major $5 million downtown revitalization, including a new technical education center that is breathing fresh life into historic structures.

In Lee County, you aren't just buying an affordable home — you’re joining a community dedicated to growth, preservation, and the legendary hospitality of the Pee Dee.

Union County

Median property tax bill: $579

Median home price: $103,600

Union home prices are relatively low, under $104,000, according to the Tax Foundation. Median property tax bills are relatively low at approximately $579 per year. The property tax bill in Union is also cheaper than all surrounding South Carolina counties.

For those who want their backyard to be nearly 62,000 acres of wilderness, Union County is a dream. Home to a significant portion of the Sumter National Forest, the area offers endless territory for hunting, camping, and hiking. Water lovers can spend their weekends on the Tyger River Canoe Trail or fishing at one of the county’s five major lakes.

After a day in the forest, you might want to stop at Midway BBQ in Buffalo. As the last remaining "hash house" in the county, this 85-year-old Southern institution serves up local flavors that travel guides consistently rank as a "must-visit."

Whether it's an afternoon or an eventual stay, Union County offers plenty to do with a relatively low property tax bill to boot.

Marlboro County

Median property tax bill: $496

Median home price: $82,000

Marlboro County has the second-lowest median home price on our list at $82,000. And the median property tax bill hovers at $496, according to the U.S. Census Bureau.

If you’re looking for a place with "kick," Marlboro County has it — literally. The region is the birthplace of Blenheim Ginger Ale, a cult-favorite spicy soda that’s been bottled there since 1903.

Beyond the soda pop, the Marlboro lifestyle is surprisingly active. Until two years ago, residents flocked to Lake Paul Wallace, a 300-acre oasis in Bennettsville that features a rare "split" design: one side is a peaceful waterfowl refuge and fishing spot, while the other boasts a white sandy beach for swimming and water skiing.

However, recent damage to the dam has caused closures, though the state of South Carolina has allocated $25 million for repairs to begin in 2027.

Between the historic heritage sites in the county seat and the sprawling fields of strawberries and corn, Marlboro offers a quintessential rural South Carolina experience with cheap property tax bills.

Chesterfield County

Median property tax bill: $487

Median home price: $116,200

Chesterfield can be relatively affordable, with the median home price around $116,200. Meanwhile, the median property tax bill in the area is just $487, according to the Tax Foundation.

Often described as the "Gateway to the Carolinas," Chesterfield is the ideal spot for those who value peace over proximity. The county is rural, scenic, and considered by some a top-tier choice for retirees or families looking to trade city noise for starlit nights. The trade-off? You’ll likely face a 45-minute drive for major retail hubs — but for many, the cost savings make the commute more than worth it.

The region is a playground for outdoor enthusiasts. You can spend your mornings horseback riding through the Sand Hills State Forest or golfing at one of the area’s championship 18-hole courses.

For those ready to settle into the great outdoors, Chesterfield County may be one of South Carolina’s best-kept secrets.

Dillon County

Median property tax bill: $452

Median home price: $85,400

About 40 minutes out from Florence is Dillon County, South Carolina. But home prices are more affordable in Dillon than in metropolitan areas. The median house price is $85,400, and property tax bills can also be quite cheap. Residents pay a median bill of $452, according to 2026 data.

For those searching for a "small-town" soul with a slow, intentional pace, Dillon County is a top contender.

Outdoor life is the heartbeat of the region, with locals spending their weekends camping and fishing at Little Pee Dee State Park. While travelers might recognize the county for the neon lights of the famous "South of the Border" attraction along I-95, residents know the area for its quiet streets and community staples like the Dillon County Theatre and the local history museum.

If you enjoy high-octane weekends, the Dillon Motor Speedway also provides a local alternative to the larger tracks, keeping the racing tradition alive without the "big city" traffic.

Dillon County is the perfect escape for those looking to disconnect from the metro life without disconnecting from their savings account.

Marion County

Median property tax bill: $436

Median home price: $93,200

Marion County is the cheapest place to live in South Carolina. The median property tax bill is only $436, and home prices are around $93,200, per the most recent Tax Foundation information.

Known as "Swamp Fox" country for its deep ties to the winding Little Pee Dee River and revolutionary war leader Francis Marion, this county is steeped in rustic history.

Today, Marion is defined by its stunning antebellum architecture and serves as the ultimate affordable alternative to the coast — offering a peaceful retreat approximately 45 minutes away from the bustle of Myrtle Beach.

Charming, moss-draped streets lead residents to the historic train depot and the scenic Catfish Creek Canal, where hiking and biking trails offer a front-row seat to the area's natural beauty. For a deeper dive into the local soul, the Holliday House offers immersive tours that capture the elegance of a bygone era.

Adventure and tranquility await in Marion County, the cheapest place to live in South Carolina.

More Cheap Places

• 10 Cheapest Places to Live in North Carolina
• 10 Cheapest Places to Live in Florida
• 10 Cheapest Places to Live in Tennessee
• 10 Cheapest Places to Live in Virginia

In recent years, more states have adopted a single income tax rate, or "flat tax." Unlike progressive systems, where tax rates rise as income increases, a flat tax applies the same rate to all taxable income.

Flat taxes could make certain places more appealing for those looking to keep more of their paycheck. That's likely something people are thinking about as tax season wraps up.

Supporters say flat taxes are easier to understand and plan for and could make some states more competitive. (That could be helpful as people leave high-tax states like California and New York for states with lower tax rates.)

But critics warn that flat tax rates often benefit higher-income households more than those with middle or lower income.

So the big question is: who really pays more when every dollar is taxed at the same rate? Here’s more of what you need to know.

Which states have flat tax rates in 2026

As of this year, more than a dozen states levy a flat income tax. Ohio is the newest addition at 2.75% as of January 1, 2026. (The flat rate applies to income above ~$26,050; income below that is still untaxed.)

The following table shows states that have made the shift in recent years.

Note: Mississippi exempts lower income from taxes, then applies a flat rate to the rest, which is why it’s often grouped with flat-tax states.

Here are the states that have had flat rates for a long time.

Note: Massachusetts taxes most income at a flat rate, with a 4% surtax on income over $1 million.

Even at $75,000 in taxable income, the difference between low- and high-rate flat-tax states exceeds $2,000 a year, and it widens at higher incomes.

Flat tax benefits and drawbacks: Who really pays?

Not everyone is a fan of flat taxes.

Critics argue that treating a $50,000 earner the same as someone making $500,000 feels unfair — higher-income households benefit far more, while residents with middle or lower incomes see little relief.

• For example, in a state with a flat tax of 3.99%, someone earning $50,000 would be left with about $48,000 after tax.
• Meanwhile, a $500,000 earner in that same state would keep about $480,000.
• That’s over $430,000 more in take-home pay, largely reflecting the difference in income, even though both pay the same rate

Note: This is a simplified example. It assumes gross income equals taxable income and doesn't account for tax deductions, exemptions, credits, or federal taxes.

Another argument against flat tax rates is the challenges sometimes created for state budgets. Lower income tax revenue can push lawmakers to adjust or increase other state levies, like sales taxes and property taxes.

• North Carolina's flat tax has been in place since 2014, now has a 2026 rate at 3.99%, and has funded priorities amid growth, though ongoing revenue gaps fuel debates over sales and property hikes.
• Iowa's 2025 flat tax at 3.8% promised simplification and growth for all earners. But some critics projected annual revenue losses of more than $1 billion, raising concerns that lawmakers could turn to higher sales or property taxes to offset the shortfall. Data show those kinds of taxes tend to disproportionately burden middle- and lower-income households.

Similar debates have occurred in other states, with proponents highlighting economic growth and competitiveness, and opponents warning that reduced progressivity can strain funding for essential services.

Understanding these trade-offs is important if you’re considering moving to a different state. A lower income tax may look attractive, but other forms of taxation or reduced services and the overall cost of living can sometimes offset the benefit.

Flat tax examples: What does it mean for your money?

Flat taxes can generally increase take-home pay for some earners, but everyday pressures like rising housing costs, groceries, gas taxes, and energy bills often eat into that extra cash. That can make the net benefit feel smaller than the numbers suggest.

If You’re Middle-Class

The savings could be tangible but modest.

• At $75,000 in taxable income, someone living in Arizona would pay about $1,875 in taxes, compared with roughly $3,975 in Idaho.
• That's a difference of $2,100 a year.

If You're a Higher Earner

The picture shifts at higher incomes.

• At $150,000, a taxpayer in Arizona might owe $3,750, while someone in Idaho could pay roughly $7,950.
• That’s over $4,000 in potential savings, enough to cover several months of groceries, a mortgage payment, or climbing energy costs.

*These are simplified examples that don't account for federal taxes or other credits, deductions and the like.

The income gap is why some argue that flat taxes tend to favor higher earners. While everyone pays the same tax rate, those with larger incomes see the biggest real-dollar savings.

In the end, whether a flat tax actually affects your finances depends heavily on your income and where you live.

Flat tax rates: Bottom line

If you’re considering relocating, taxes are only one piece of the puzzle. A state that looks tax-friendly because of a flat income tax (or even no personal income tax) might not necessarily translate to more money in your pocket.

Understanding the full picture — income tax, other taxes, and cost of living — can help give you a clearer sense of which states truly help you keep more of what you earn.

Learn More

• Millions of People Are Leaving High-Tax States Like California and New York
• 9 No Income Tax States Ranked by Cost of Living in 2026
• How All 50 States Tax Retirees

As tax season winds down and spring prompts thoughts of moving, people across the U.S. consider the financial benefits of relocating to a state with no income tax.

While that's understandable, since avoiding state income tax can save money, overall affordability depends on more than just tax policy. Housing, everyday expenses, and even other types of taxes often offset income tax savings.

In 2026, the nine states with no broad-based personal income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — continue to attract residents. But not all are equally cost-effective.

And…Washington state is now a special case because it taxes some high-income capital gains and, starting soon, income over $1 million. (More on that below.)

Here’s more to know about how these states rank when you weigh both tax savings and the cost of living.

Cost of living in no income tax states

To compare affordability across no‑income‑tax states, we used BEA regional price parities (RPPs) as a rough measure of how expensive each state is relative to the rest of the country. However, lower prices don’t automatically mean more affordable if wages are also lower.

• RPPs are indexed to the national average, where 100 equals the U.S. average price level.
• Values below 100 mean prices are lower than average, and values above 100 mean prices are higher.

We also considered:

• Housing costs: Median home prices and rents (Zillow, U.S. Census Bureau).
• Everyday expenses: Food, utilities, transportation, and healthcare.
• Taxes beyond income tax: Property taxes, sales taxes, and total state‑ and local‑tax burdens (Tax Foundation, 2026).

Which state is the most tax-friendly?

This ranking is a simplified comparison based on average price levels and tax burdens.

Your actual costs will depend on your income, housing choices, spending habits, tax deductions, credits, and exemptions, and local prices.

1. Tennessee: Best overall value

• Income tax: 0%
• Cost of living: Approx. 90 (Roughly 10% below U.S. average, BEA RPP)
• Tax burden: Below average (Tax Foundation)

Tennessee offers a compelling combination of affordability and financial simplicity.

Housing and everyday expenses remain well below the national average, and the state’s relatively low total tax burden (despite higher sales taxes) adds to its appeal. BEA RPP data places the overall cost index at roughly 90, meaning households spend about 10% less than the national average.

Why the Volunteer State ranks first: Low housing and living costs allow residents to retain more of their income, making Tennessee a top choice for those looking for affordability.

For more information, see our guide: 10 Cheapest Places to Live in Tennessee.

2. Texas: Balanced overall, higher property tax

• Income tax: 0%
• Cost of living: Approx. 100 (About average for U.S., BEA RPP)
• Tax burden: Slightly below average, but property taxes are high (Tax Foundation)

Texas benefits from a relatively strong economy and no state income tax. However, property taxes are among the highest in the U.S., and housing costs are rising in major metros like Austin and Dallas.

For more information, see: 10 Cheapest Places to Live in Texas.

BEA RPP data show overall costs near the national average, and the Tax Foundation describes the total state-local tax burden as moderate, partially offset by property taxes.

Why the Lone Star State ranks here: Texas can be a balanced option for those who can manage property taxes while benefiting from no income tax.

3. South Dakota: Broad affordability

• Income tax: 0%
• Cost of living: Approx. 88–92 (About 8–12% below average, BEA RPP)
• Tax burden: Among the lowest (Tax Foundation)

South Dakota combines low costs across housing, utilities, and everyday expenses with one of the lowest total state and local tax burdens.

BEA RPP data show the state is 8–12% below the national average. For households seeking straightforward savings without tradeoffs, South Dakota is consistently cost-effective.

Why the Mount Rushmore State ranks high: South Dakota's broad affordability paired with minimal taxation.

4. Wyoming: Low taxes, moderate costs

• Income tax: 0%
• Cost of living: Approx. 95–100 (slightly below to near average, BEA RPP)
• Tax burden: Low (Tax Foundation)

Wyoming’s overall costs hover near the national average, with moderate housing prices and below-average total tax burdens. Its rural economy can offer relatively fewer job opportunities, and services could be limited in smaller towns.

Why the Equality State ranks here: Moderate costs make Wyoming affordable, but economic and service limitations are tradeoffs to consider.

5. Florida: Popular but rising costs

• Income tax: 0%
• Cost of living: Approx. 103 (Roughly 3% above U.S. average, BEA RPP)
• Tax burden: Below average (Tax Foundation)

Florida attracts residents with no income tax and no tax on retirement income. However, BEA RPP data shows overall costs slightly above the national average, driven by housing in high-demand areas like Tampa, Miami, and Orlando.

Homeowners' insurance premiums are among the highest in the U.S., further increasing costs. The Tax Foundation reports that the total tax burden is below the national average, but rising living costs reduce net savings.

Why the Sunshine State ranks mid-pack: Tax advantage in Florida is partially offset by housing and insurance costs.

For more information, see our report: Florida Tax Tradeoffs: Why 0% Income Tax Doesn't Always Mean Cheap.

6. Nevada: No income tax, Higher everyday costs

• Income tax: 0%
• Cost of living: Approx. 102–108 (About 2–8% above average, BEA RPP)
• Tax burden: Near average (Tax Foundation)

Nevada avoids income tax, but BEA RPP data show overall living costs slightly above average, largely due to housing in Las Vegas and Reno and higher transportation costs.

The Tax Foundation indicates the total tax burden sits near the U.S. median. Rising housing and everyday expenses erode some of the savings from zero income tax.

Why the Silver State ranks here: Nevada is still relatively tax-friendly, but everyday costs can reduce the net benefit.

7. Washington: High costs, new taxes for high earners

• Income tax: No wage income tax; 7% capital gains tax on high earners (9.9%)
• Cost of living: Approx. 115–120 (Roughly 15–20% above U.S. average, BEA RPP)
• Tax burden: Around average (Tax Foundation)

Washington does not tax wages, but housing in Seattle and surrounding areas drives overall costs 15–20% above the national average. A new capital gains tax on high earners further limits the state’s attractiveness for wealthier residents. (And the state just enacted a 9.9% tax on millionaires.)

Sales and property taxes contribute to a total tax burden near the national median, according to the Tax Foundation.

Why the Evergreen State ranks low: High housing and everyday costs in Washington, combined with a new capital gains tax and millionaire tax, can reduce the advantages of a no-wage-tax state for some higher earners.

8. New Hampshire: No wage tax, high property costs

• Income tax: No tax on earned wages (investment income tax phased out as of 2025)
• Cost of living: About 112–115 (Roughly 12–15% above average, BEA RPP)
• Tax burden: Relatively high property tax rate (Tax Foundation)

New Hampshire has no tax on earned wages, but property taxes are among the highest in the nation.

BEA RPP data show overall costs above the national average, and the Tax Foundation confirms that property taxes significantly offset the benefit of no income tax for many households.

Why the Granite State ranks here: High property costs reduce the net financial advantage for homeowners.

9. Alaska: Highest costs despite tax perks

• Income tax: 0%
• Cost of living: Approx. 124–126 (About 24–26% above average, BEA RPP)
• Tax burden: Low overall (Tax Foundation)

Alaska offers no income tax and distributes an annual Permanent Fund Dividend, but elevated prices for goods, groceries, utilities, and transportation make it one of the most expensive states. BEA RPP data confirms a cost index 24–26% above the national average.

The Tax Foundation reports a low overall tax burden, but everyday expenses largely outweigh tax savings for most households.

Why the Last Frontier State ranks last: The high cost of living in Alaska eclipses the benefits of no income tax.

Are states with no income tax better? Bottom line

Avoiding state income tax can save money, but your overall cost of living matters more. States like Tennessee and South Dakota offer broad affordability, while others, like Florida, Washington, and Alaska, offset tax advantages with high housing, insurance, and everyday costs.

If you're thinking about moving to a low-tax state, look beyond income tax and evaluate total expenses, including property taxes, insurance, and cost-of-living differences.

Particularly with prices rising on everything from food to gas taxes, a state with no income tax is only beneficial if your overall expenses remain manageable.

Read More

• People Are Leaving High-Tax States: Here's Where They're Moving Instead
• States With the Highest Gas Tax in 2026
• Frugal Habits People In Different States Are Using to Save in 2026
• 9 No-Capital-Gain-Tax States Ranked by Cost of Living

Income tax cuts are coming to North Carolina, or are they? Thanks to a landmark law passed just a few years ago, Tarheel State taxpayers are slated to see personal income tax rates trigger annually downward until 2028. But a new legislative push seeks to hit the brakes.

Gov. Josh Stein (D) and some Republican state House leaders are warning of a $2.8 billion to $3.5 billion budget shortfall over the next two years. That could potentially threaten funding for critical services unless the income tax cuts are paused.

"We are not a poor state," Gov. Stein remarked to reporters, while proposing a $1.4 billion plan to shore up immediate services — particularly the state's Medicaid program. "But we are making ourselves a poor state by reckless, pre-programmed tax cuts."

However, the GOP-led state Senate remains committed to the rate reductions, meaning the upcoming spring legislative session is shaping up to be a tumultuous battle over the state's long-term fiscal path. Here is what is at stake for your 2026 North Carolina paycheck and beyond.

Income tax in North Carolina for 2026

North Carolina's flat income tax rate is 3.99% for 2026, lower than last year's 4.25%. Under the current legislative roadmap, additional cuts are scheduled through 2028, provided the state hits specific revenue benchmarks.

• In 2027, the personal income tax rate is scheduled to drop to 3.49%.
• In 2028, the personal income tax rate is scheduled to drop to 2.99%.

Note: Additionally, the corporate income tax rate is scheduled to hit 0% by 2030.

The NC Office of State and Budget Management (OSBM) recently projected that the General Fund revenue is on track to exceed the $33.042 billion trigger required to authorize the next round of cuts.

Yet, the benefits are not expected to be distributed equally. According to an analysis conducted by the OSBM, higher-income households stand to see the most significant dollar-amount relief in 2027:

North Carolina state income tax: Is your lower rate coming?

Although the North Carolina income tax cuts are codified in law and set to trigger automatically upon meeting revenue targets, the state's fiscal leadership remains sharply divided.

Notably, North Carolina entered 2026 as the only U.S. state without a new budget, due to a stalemate in the General Assembly over income tax cuts and their impact on public service funding. This means the Tarheel State is currently operating on recurring base funds.

And this legislative session, the debate continues, as Gov. Stein is spearheading calls to freeze further future rate reductions, citing a projected revenue gap of to $3.5 billion by the 2027-2028 fiscal year.

"[This gap would cause] the state to have to make painful cuts to critical services like public safety, education, and health care," Stein stated in a March press release. "As our population rapidly grows and the federal government becomes a less reliable partner, I urge this General Assembly to…hit pause on outdated, irresponsible tax triggers."

But legislative leaders argue that the governor's own spending plan — including the $319 million boost to the Medicaid budget — poses fiscal risks as well.

"Senate Republicans remain committed to addressing the state’s most pressing needs in a responsible, fiscally sound manner," Lauren Horsch, spokesperson for state Senate Leader Phil Berger (R-District 26), issued a statement in response to the plan. "Gov. Stein’s proposal…would create a recurring budget deficit and force the state to increase taxes on working families.”

Meanwhile, the OSBM projected a $370 million revenue surplus for the current fiscal year of 2025-2026. While a surplus is usually good news, State House Speaker Destin Hall (R-District 87) noted that the funds are expected to be "entirely consumed" by rising Medicaid costs.

Bottom line: NC income tax trigger 2027

Because certain economic triggers are projected to be met this year, North Carolina lawmakers might cut the income tax rate to 3.49% in 2027. However, the viability of the 2.99% target in 2028 remains in intense debate, particularly with a potential budget deficit on the horizon.

"We are bearing the fruit of an orchard that was planted a long time ago," Gov. Stein noted during a recent education conference. "But today, we risk hollowing out the institutions that have helped to create our success."

The fiscal cliff Stein warns about dominated last February's budget talks, ultimately resulting in a $600 million stopgap for Medicaid and other essentials but leaving broader funding for public education and infrastructure in limbo.

So for North Carolina taxpayers, the road to a 2.99% income tax rate cut might be blocked by a looming $2.8 billion to $3.5 billion deficit reality — or no budget at all. Stay tuned for more updates.

Read More

• 10 Cheapest Places to Live in North Carolina
• North Carolina Tax Guide
• North Carolina’s $15,000 Forgivable Mortgage: How to Qualify in 2026

Florida's no-income tax status draws retirees every year. U.S. migration data show the state has recently attracted the largest net inflow of residents age 60 and older.

But savings from having no personal income tax don’t tell the whole story about the cost of Florida retirement.

Rising living costs and ongoing tax policy debates, including proposals to eliminate Florida property tax, as well as other "hidden costs," can all impact your 2026 bottom line.

Here's more of what you need to know

How much no income tax saves Florida retirees

Florida doesn't levy a personal state income tax. So, most common sources of retirement income, including Social Security benefits, pensions, and withdrawals from IRAs and 401(k)s, aren't taxed at the state level.

• For retirees moving from higher-tax states, that difference alone can translate into thousands of dollars in annual savings.
• For example, a retiree earning $70,000 per year in New York could pay roughly $4,000 in state income tax on their retirement income, whereas moving to Florida would eliminate that tax.

Having no personal income tax can also simplify planning. Retirees in the Sunshine State don’t have to manage state-level withholding or track varying tax treatment across income sources.

How the IRS taxes retirement income

Yes, Florida has no state income tax, and retirees can often keep more of each retirement dollar. But federal taxes still apply, so understanding how your income is taxed by the IRS is key.

• Up to 85% of Social Security benefits may be taxable, depending on your "combined income" (AGI + tax-exempt interest + half of Social Security benefits).
• Withdrawals from tax-deferred accounts like IRAs and 401(k)s are generally taxed at ordinary federal income tax rates. (10–37%) depending on your taxable income after deductions.

Example: A retiree with $22,000 in Social Security benefits, $35,000 in pension income, and $13,000 in IRA withdrawals has a combined income of roughly $59,000 in 2026, putting them well above the Social Security taxation threshold.

Their IRA and pension withdrawals, after the standard deduction plus the extra standard deduction for age 65 and older, fall mostly in the 12% federal tax bracket.

Note: This is a simplified example. Under the new 2025 federal tax law, retirees age 65 and older may qualify for an additional senior bonus deduction of up to $6,000, which can lower their taxable income.

For more information, see: How the New Senior Bonus Deduction Works.

Florida property tax breaks for retirees

Property taxes are one of the most important and variable costs retirees face in Florida.

Florida’s average effective property tax rate is about 0.79%, according to data compiled by the Tax Foundation. For a $350,000 home, that's roughly $2,765 per year before any additional savings.

Notably, Florida offers several programs that can reduce that bill:

• Homestead Exemption: Every Florida homeowner with a primary residence can lower their home's taxable value by up to $50,722 (adjusted for the 2026 CPI), directly reducing property taxes. This exemption applies automatically when you file with your county property appraiser and is available to all permanent residents, including retirees.
• Assessment Caps: (Save Our Homes Cap): Limits the annual increase in assessed home value for homesteaded properties to 3% or the change in the Consumer Price Index (whichever is lower). For retirees who have owned their homes for many years, this can dramatically slow the growth of property taxes, especially in high-value real estate markets.
• Senior Property Tax Exemptions (65+): Many counties offer additional exemptions or caps for homeowners age 65 and older. These vary locally. Some counties provide extra dollar exemptions on top of the homestead exemption (e.g., $25,000–$50,000 additional for income-qualified). Others limit the annual increase in taxable value for seniors, sometimes saving hundreds or even thousands of dollars per year.

Retirees must apply through their county property appraiser’s office and meet age/residency and often income requirements. Some counties also offer additional benefits linked to income or veteran status, which can further reduce taxes.

Florida property taxes compared to other states

Florida homeowners pay significantly less than those in New Jersey, with a high 2.23% rate. But they still face a higher burden than residents of Alabama, who enjoy a much lower 0.38% average.

2026 Florida property tax changes to watch

As Florida lawmakers continue advancing several property tax reform proposals that could appear on the November 2026 ballot, this year is important not just for current residents but also for retirees deciding when — or where — to move.

These proposals range from expanding homestead exemptions to phasing out non‑school property taxes and creating new limits on assessed value growth.

If voters approve one or more of these amendments, some changes could take effect as early as 2027, potentially lowering property tax bills for many homeowners.

But...nothing is final yet, and the exact measures that make the ballot are still being finalized, so stay tuned.

Other taxes Florida retirees still pay

Even without income tax, Florida retirees aren’t tax-free. Sales taxes are a core example.

Tip: Florida offers annual sales tax holidays, including periods for back-to-school items, hurricane preparedness supplies, and energy-efficient products, which can help retirees save on essential purchases.

Gov. Ron DeSantis' office has touted the state's sales‑tax holidays as a whole, delivering about $450 million in savings to Florida families and residents last year.

'Hidden costs' that can quietly eat into your retirement budget

Taxes are only part of the equation. Several non-tax costs can significantly affect retirement budgets in Florida.

Insurance Costs: As of 2026, homeowners' insurance in Florida is among the highest in the country due to hurricane, tornado, and flood‑related risk. Estimates from the National Association of Insurance Commissioners and recent industry analyses suggest that average annual premiums range from about $3,000 to over $6,000, depending on location, property value, and coverage levels.

Housing Costs: According to rental data from Apartments.com average rent in many parts of Florida is about $1,600 to $2,300 per month (~$20,000–$27,000 per year). Though this varies significantly by area and apartment type.

Everyday Living Expenses: The latest available data from the Bureau of Labor Statistics’ Consumer Expenditure Survey indicate that households headed by someone age 65 or older typically spent about $61,000 per year on all expenses in 2024, including essentials like food, utilities, transportation, and healthcare.

Additional Considerations: While Florida doesn’t tax income at the state level, some public services, like transportation infrastructure and local programs, might be affected by lower income-tax revenue. As a result, some retirees could see differences in the quality or availability of services compared with those of states with income tax.

Together, these costs can offset some of the savings from Florida’s tax advantages if you don't plan carefully.

Strategies to keep more of your money in retirement

Retirees can take a few key steps to maximize Florida’s advantages:

• Claim every property tax break you're eligible for.
• Pay attention to 2026 ballot initiatives involving taxes.
• Plan for federal taxes. Coordinating withdrawals from Social Security and retirement accounts can reduce overall tax liability
• Consider the location within Florida. See our report: 10 Cheapest Places to Live in Florida.

Florida retirement bottom line

Florida’s no-income-tax advantage remains a powerful draw for retirees in 2026, but it’s only part of the picture.

Property taxes, sales taxes, insurance costs, and everyday expenses all shape what you actually keep.

With major property tax reforms potentially heading to voters in November 2026, this year could mark an important turning point.

Retirees who stay informed (and plan accordingly) can maximize their tax savings and lifestyle in the Sunshine State.

Read More

• Are States With No Income Tax Better to Live In?
• Florida Tax Guide 2026
• How to Calculate Taxes on Social Security Benefits
• Florida Wants to Eliminate Property Taxes: Who Really Pays?

Just as the dust seemed to settle on Washington's tax code, the Evergreen State is once again shifting its fiscal identity.

Historically a "no-income-tax" state, Washington broke a 90-year streak in 2021 by implementing a capital gains tax. Then last year, lawmakers enacted a record-breaking estate tax hike, pushing the top rate to 35% — the highest state "death tax" in the nation.

The hike was intended to address income inequality and generate revenue for public services, such as education and childcare. Following concerns from business leaders regarding a potential "wealth exodus," though, state lawmakers pursued a legislative retreat.

Senate Bill 6347, recently signed by Gov. Bob Ferguson, reverses the estate tax increase. But the relief comes with a significant trade-off: A new 9.9% Washington "millionaire tax" on income. Here's why your heirs might not be out of the woods yet.

Washington estate tax exemption for 2026

Washington is currently in a rare "split" year for estate taxes. Depending on when an estate is settled, two different sets of rates and exemptions might apply.

For the first half of 2026, Washington's estate tax remains at the record highs set last year. However, SB 6347, just signed by Ferguson, "reverses" the higher estate tax changes, starting July 1, 2026.

Note on the "frozen" exemption: Currently, the exemption rises annually with inflation. However, the reversal bill lowered the exemption to $3 million (the level at the end of last year) and froze the amount until 2027.

Washington estate tax rate for 2026

The Washington estate tax reversal significantly lowers the tax rate for large estates. At the same time, the recently enacted law lowers the estate tax exemption threshold, meaning more moderately sized estates might find themselves in the Washington filing pool.

As tax rates and exemptions on Washington estates shift, so does the final bill for your heirs. According to an analysis by the ELG Estate Planning law group, the "reversion" might create two different outcomes:

• The $5 million estate: Under the current 2026 law (until June 30), an estate of this size could face a Washington tax bill of roughly $250,000. Under the reversal law, the same estate might pay approximately $361,050. This is a higher tax bill of more than $111,000 due to a lower estate tax exemption amount. (Since the exemption amount is raised, the final tax bill might be lower than estimated.)
• The $10 million estate: Under the current 2026 law (until June 30), a $10 million taxable estate could result in $1.33 million in estate taxes. With the recently enacted reversion, the bill could drop to roughly $1.26 million — thanks to a lower estate tax rate.

In the latter example, heirs might keep more than $72,000 that would have otherwise gone to the state. Those funds could stay in your family’s accounts.

But is this "death tax" relief enough to offset Washington residents' tax woes?

Washington estate taxes: Legislative changes

While last year's estate tax hike was designed to bolster public services, its rapid reversal in 2026 was fueled by indications of a "wealth exodus" from the Evergreen State.

"We do have a lot of anecdotal evidence that people are making a decision to redomicile," state Senate Majority Leader Jamie Pedersen (D-Seattle) told KOMO News outside the legislative session. "I think it's worth taking that seriously."

A 2026 Association of Washington Business (AWB) (PDF) survey revealed that 44% of Washington business leaders are considering moving their personal residences out of the Evergreen State, citing a rising tax burden as a primary motivator.*

This sentiment follows a string of higher-income departures:

• In March 2026, Starbucks announced it would open a new corporate office in Nashville, Tennessee, a tax-friendly state with no income taxes, and move some operations and personnel there.
• According to data reported by SmartAsset, Washington now ranks eighth-worst in the nation for the net loss of high-earning millennials. In the year following the rollout of its capital gains tax, the state saw a net departure of 222 households earning over $200,000.

However, not everyone agrees that so-called "wealth taxes" are a primary cause of out-migration. The Center on Budget and Policy Priorities considers other factors — such as cost of living, housing, climate and family ties to weigh more heavily on interstate moves.

The state's "anti-exodus" strategy remains counterintuitive: Even as lawmakers retreat on estate taxes, they've doubled down on a new 9.9% "millionaire tax." For many of the state's wealthiest, the message might be mixed.

*Note: The Winter 2026 AWB survey was conducted online with 429 employers across various industries and employee numbers.

Washington millionaire income tax

As reported by Kiplinger, another part of Washington's 2026 proposed tax package is the controversial "millionaire tax." Ferguson, who championed the bill during the 60-day legislative session, is expected to sign Senate Bill 6346 into law by early April.

While the estate tax has been rolled back to entice the wealthy to stay, this new levy is designed to capture revenue from Washington's highest earners — though not immediately.

Key provisions of the Washington millionaire's tax:

• The rate is a flat 9.9% tax on Washington taxable income.
• The tax threshold applies to income exceeding $1 million per year.
• Notably, the $1 million threshold applies per household, meaning a single filer and a married couple filing jointly both share the same $1 million deduction — effectively creating a "marriage penalty" for high-earning couples.
• If signed, this tax goes into effect on January 1, 2028.

The estimated $3.5 billion in annual revenue from Washington's millionaire tax would be earmarked for education and health care, sales-tax relief, and small-business credits.

Critics argue that the new tax will accelerate the state's wealth exodus and damage Washington's economic competitiveness with other states. For more information, check out Kiplinger's report, 9.9% Washington Millionaire Tax Approved: What's Next for High Earners?

Read More

• Washington State Tax Guide
• Washington Approves Capital Gains Tax Increase: Who Pays?
• Could a New Billionaire Tax Plan Put $3,000 in Your Pocket?

Georgia drivers will soon see some relief at the pump after state lawmakers approved a 60-day suspension of the state’s motor fuel tax.

The measure, expected to be signed into law by Gov. Brian Kemp Friday, will reduce prices by roughly 33 cents per gallon of gasoline and about 37 cents per gallon of diesel, once fuel distributors adjust prices.

The bipartisan legislation comes as high gas prices continue to weigh on household budgets across the state. Global energy disruptions due to the United States conflict with Iran, inflation, and supply chain pressures are among the reasons cited for the emergency relief.

Meanwhile, Georgia will once again send one-time tax rebates to eligible residents this year. Here's more of what you need to know about both types of tax relief.

Georgia gas tax suspended: What it means for drivers

According to AAA, the average cost of a gallon of regular gas in Georgia as of March 20 is roughly $3.79, lower than the national average of $3.91.

(The gas tax in Georgia is 33.3 cents per gallon of regular gasoline and 37.3 cents per gallon of diesel fuel.)

• The suspension applies only to the state portion of the motor fuel tax. Federal and local taxes remain in effect.
• Fuel distributors are expected to pass savings onto drivers within days of the governor signing the bill.
• The relief is intended as a short-term measure.

“By suspending the state motor fuel tax for 60 days, we are delivering meaningful, timely relief to millions of Georgia drivers and families when and where it’s needed most," said Republican Speaker of the Georgia House of Representatives, Jon Burns of Newington.

A driver filling a standard 15-gallon tank in Georgia could save approximately $5 per gasoline fill-up, slightly more for diesel.

Georgia tax rebate 2026 coming soon

This gas tax suspension complements Georgia’s one-time income tax rebates for 2026, which, as Kiplinger has reported, are designed to provide further support for households.

This isn't the first time Georgia has offered similar rebates to its residents.

"We’ve been able to do it four times, and we’ve been able to do it because we’ve been very fiscally conservative with our budgeting," state Sen. Bo Hatchett (R-Cornelia) told reporters.

For 2026:

• Rebate amounts: Up to $500 for joint filers, $375 for heads of household, and $250 for single filers.
• Eligibility: Based on residents’ 2024 and 2025 Georgia tax returns.
• Timeline: Rebates will be distributed later this year by the Georgia Department of Revenue.

For more details on who qualifies and how much residents may receive, see our report: Georgia Tax Rebate 2026 Guide.

Georgia tax holiday: Bottom line

With fuel prices rising, the gas tax suspension is part of a broader strategy to balance fiscal responsibility with household support.

Consumer advocacy groups have generally welcomed the legislation as a proactive step to address immediate cost pressures, especially for low- and middle-income households.

Next steps for residents?

• Gas prices should begin to reflect the suspension not long after the governor signs the bill.
• Tax rebates will be processed later in the year; residents can monitor updates from the Georgia Department of Revenue.

Keep an eye on the prices at the pump and any rebate announcements so you can benefit from both programs.

Read More

• Georgia Tax Rebates Coming in 2026: What to Know
• States With the Highest Gas Taxes
• State Tax Changes to Know This Year
• Stop Using Your Smartwatch for Mileage (Until You Read This IRS Rule)

If you’ve felt your wallet shrinking at the gas pump lately, you’re not imagining things. Heightened tensions between the United States and Iran have injected a fresh wave of uncertainty into global oil markets, driving energy prices steadily upward.

Gas prices have recently climbed to a national average of around $4.30 per gallon, making every fill-up sting a little more for many already dealing with high prices for essentials.

With crude oil now trading above $105 per barrel, the pressure on American households shows little sign of easing as we head into the spring.

State and federal gas taxes also make a difference.

In some states, drivers can pay close to 90 cents per gallon in combined taxes and fees before accounting for crude oil, refining, and distribution costs.

So, here’s a breakdown of the 10 states with the highest gas taxes in 2026, from #10 to #1, including state-only taxes, total taxes with the federal gas tax, and how each state uses this revenue.

But...let's first look at gas prices.

Why gas prices are rising right now

Gas prices are ticking up again, and for many drivers, the increase feels sudden. But the reasons behind it have less to do with local taxes and more to do with outside forces.

Right now, the national average is hovering around $4.30 per gallon, according to AAA, with some areas paying close to $6.00 a gallon. The biggest reason? Tension in global oil markets.

• The war conflict involving Iran has created uncertainty around the global oil supply. Oil traders tend to react to that risk, and since gasoline is refined from crude oil, those increases tend to show up at the pump.
• Limited supply can also drive up gas prices. Refineries, which convert crude oil into fuel, sometimes don't operate at full capacity due to seasonal maintenance, unexpected shutdowns, or stricter environmental regulations.
• Additionally, transportation, storage, and retail costs can contribute to the final price consumers pay.

Taxes are still part of the equation, but they tend to change slowly.

For drivers, it means the price on the sign is often tied less to local policy and more to events unfolding overseas.

How gas taxes add to the cost per gallon

The federal government currently charges 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel, with revenue primarily funding the Federal Highway Trust Fund for road construction and maintenance.

States add their own taxes on top of this, which can include fixed cents-per-gallon fees, percentage-based taxes, or both. In high-tax states, taxes alone can account for roughly 15% to 30% of the total price per gallon, depending on market conditions.

Some states also include additional fees, like environmental levies or inspection charges, that effectively increase the total cost per gallon. These revenues sometimes help fund transportation infrastructure, public transit, and environmental programs.

10 states with the highest gas taxes in 2026

Note: These rankings are based on state excise gas taxes. As noted for each state, total costs per gallon can be higher when additional fees and local taxes are included.

10. Rhode Island Gas Tax 2026

41.1¢ Per Gallon | Total With Federal: 59.5¢

Rhode Island consistently ranks among the highest for gas taxes despite its small size.

The gasoline tax is indexed to inflation, with adjustments every two years. Revenue funds road and bridge maintenance statewide. Drivers also pay minor environmental fees tied to fuel sales.

Even for local commuters, that extra 41.1¢ per gallon adds up over time, particularly during periods of high global oil prices.

9. Virginia Gas Tax 2026

41.6¢ Per Gallon | Total With Federal: 60.0¢

Virginia uses a hybrid system that combines excise taxes with regional, price-based components.

Regional surcharges apply in Northern Virginia and Hampton Roads. Revenue supports highways, bridges, and local transportation projects. Indexed to inflation, rates gradually rise.

Drivers in more urban areas of the Commonwealth may pay slightly more than rural commuters, so total costs vary by location.

8. New Jersey Gas Tax 2026

44.9¢ Per Gallon | Total With Federal: 63.3¢

New Jersey relies on its gas tax to fund the Transportation Trust Fund.

Rates are adjusted periodically to maintain stable revenue for infrastructure projects. Revenue funds road and bridge repairs, as well as transit projects statewide.

Drivers filling up in New Jersey help support major infrastructure that commuters rely on every day.

7. Maryland Gas Tax 2026

46.2¢ Per Gallon | Total With Federal: 64.6¢

Maryland uses a combination of excise and sales-based fuel taxes.

Excise tax is indexed to inflation, automatically increasing over time. Revenue supports highways, bridges, and mass transit programs. Portions of the revenue are allocated to regional transit authorities.

Commuters in Baltimore and D.C. suburbs typically pay higher gas taxes but can benefit from transportation networks.

6. Michigan Gas Tax 2026

48.2¢ Per Gallon | Total With Federal: 66.6¢

Michigan raised its gasoline tax as part of long-term road improvement funding.

Revenue funds highways, bridges, and local roads. Minor environmental fees are included in the total. Excise tax adjustments help keep infrastructure maintained.

For drivers in Detroit or Grand Rapids, those extra cents are used to help repair potholes and bridges.

5. Indiana Gas Tax 2026

54.5¢ Per Gallon | Total With Federal: 72.9¢

Indiana combines an inflation-indexed and price-based fuel tax.

Annual adjustments are tied to the Consumer Price Index. Revenue funds road repairs and bridge maintenance statewide. Some counties add small local fuel taxes, increasing the total.

Drivers may notice gradual increases over time, but the revenue supports long-term infrastructure needs.

4. Pennsylvania Gas Tax 2026

58.7¢ Per Gallon | Total With Federal: 77.1¢

Pennsylvania has a long-standing, high fuel tax structure.

The state uses a wholesale price-based formula that has historically contributed to higher gas tax rates. Revenue supports highways, bridges, and public transit throughout the state.

For commuters in Philadelphia or Pittsburgh, those extra cents per gallon can significantly add to monthly fuel costs.

3. Washington Gas Tax 2026

59.0¢ Per Gallon | Total With Federal: 77.4¢

Washington’s gas tax revenue is constitutionally dedicated to transportation projects.

Funds must be used for roads, highways, and bridges. Major transportation packages have seen rate increases in recent years. Additional environmental-related costs are also factored into fuel pricing.

Drivers in the Seattle area generally benefit from well-maintained infrastructure but pay a premium at the pump.

2. Illinois Gas Tax 2026

66.4¢ Per Gallon | Total With Federal: 84.8¢ (including state, local, and sales tax impacts)

Illinois layers multiple taxes on gasoline.

Excise tax and a statewide sales tax both apply. Local municipalities may impose additional fuel taxes. Indexed to inflation, costs gradually increase over time.

Commuters in Chicago often feel the impact more due to added local taxes.

1. California Gas Tax 2026

70.9¢ Per Gallon | Total With Federal: 89.3¢

California drivers typically face the highest gas taxes in the nation.

Excise taxes rise automatically with inflation each year. Additional fees fund environmental programs, underground storage tanks, and infrastructure projects. Revenue supports highways, public transit, and climate initiatives.

For Californians, filling up comes at a premium: drivers can pay close to 90 cents per gallon in taxes and state-imposed fees, on top of already high fuel prices driven by global oil markets.

Read More

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Just as the first Stay NJ checks arrived in mailboxes last month, the program's future has been thrown into question. The new Stay NJ tax relief program faces significant cuts in Gov. Mikie Sherrill's inaugural 2026 budget proposal (PDF).

Stay NJ is the third in a series of New Jersey property tax relief programs, including the Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) program and NJ Senior Freeze. In the last year, these programs have provided a record-breaking $4.3 billion in direct property tax relief, including $600 million from Stay NJ alone.

"Stay NJ is a great program," Sherrill said in a press release, "...but it benefits households that make as much as $500,000 a year. I'm changing that to safeguard Stay NJ for middle-class seniors."

Yet the proposed tightening of income thresholds on Stay NJ recipients and the expiration of a certain ANCHOR bonus could mean some residents miss out on New Jersey property tax relief. Here's what to know.

ANCHOR and Stay NJ property tax relief

Sherrill proposed tax cuts to the following property tax relief programs as part of the 2026-2027 New Jersey budget plan:

• Stay NJ. Lowering the income cutoff from $500,000 to $250,000, and cutting the maximum property tax savings from $6,500 to $4,000.
• ANCHOR. Allowing the bonus $250 in tax savings to expire for homeowners 65 and older, but renters of that same age would still qualify.

No proposed cuts would impact the New Jersey Senior Freeze program.

As a consequence of the proposed property tax cuts, some New Jersey taxpayers would see their maximum credit slashed. For instance:

• An older adult paying $20,000 in property taxes, if eligible for all New Jersey property tax relief, could lose $2,500 in tax savings.
• Another older adult paying $10,000 in property taxes, if eligible for all New Jersey property tax relief, could lose $1,000 in tax savings.
• Older adults earning between $250,000 and $500,000 would get nothing in property tax savings under the new plan.

The new property tax provisions are expected to save $500 million in costs for the new fiscal year, according to the proposed budget plan, though not everyone is on board with cutting property tax relief benefits.

Property tax in New Jersey is the highest ever

The New Jersey property tax relief cuts are part of a broader $60.7 billion plan to aid the state's deficit crisis (more on that later). Yet some argue that scaling back relief is counterproductive to the Garden State's long-term affordability goals.

"The last thing that should be cut is property tax relief," state budget officer Sen. Declan O'Scanlon (R–Monmouth), reportedly told local news outlet NJ101.5. "Instead, it's one of the first things cut…It kills me."

New Jersey property taxes are among the highest in the nation. According to the state Department of Community Affairs, the average property tax bill hit a record high of $10,560 last year. Consequently, property taxes remain the primary driver of "out-migration" as residents flee for more tax-friendly states.

Programs such as ANCHOR and Senior Freeze were established to lower out-migration rates, with the Stay NJ program explicitly designed to help older adults "age in place."

"For many New Jerseyans, property tax relief programs like Stay NJ, ANCHOR, and Senior Freeze are essential," Chris Widelo, state director of AARP New Jersey, said in a statement following Sherrill's state budget proposal.

"[These benefits] are the difference between staying in their homes or being forced to move," Widelo added.

Yet proposed tax relief cuts are expected to help slash the state's $3 billion structural budget deficit.

According to Sherrill's office, the state's current fiscal crisis is the result of a "perfect storm," including the expiration of COVID-era federal subsidies, years of underfunded state pension payments, and funding cuts implemented by the Trump administration.

Without the proposed property tax savings cuts and other budgetary maneuvers, Sherrill warns that New Jersey state coffers could be depleted within two years.

New Jersey state tax proposal

The property tax savings cuts aren't the only provisions included in the New Jersey budget proposal. Sherrill's proposed budget also includes:

• Various corporate fees, such as a new per-employee fee for companies with at least 50 workers enrolled in NJ FamilyCare (Medicaid) who don't provide health insurance and new limits on net operating losses and the alternative business calculation tax deduction.
• A record-breaking $12.4 billion on K-12 school aid, and $1.4 billion for preschool education.
• More than $7 billion toward New Jersey's state pension system.
• More than $100 million is being allocated to the state's Supplemental Nutrition Assistance Program (SNAP) and Medicaid coverage in counties affected by federal funding cuts.

The New Jersey budget proposal has a long way to go before finalization. The state's Assembly and Senate will hold hearings before drafting and voting on a final budget bill. The finalized bill will then move to Sherrill's desk for signature or veto by June 30, 2027, New Jersey's deadline for a new state fiscal budget.

Stay tuned for updates.

Read More

• What's Going on With New Jersey Property Tax Programs?
• NJ ANCHOR Rebate 2026: Payment Schedule and Status Check
• When Will You Get Your 'Senior Tax Freeze' NJ Payment?
• New Jersey Tax Guide

Philadelphia’s mayor is proposing new taxes on everyday services that could affect how much residents pay for ride-shares and online deliveries. As you might expect, the proposal is sparking debate among city officials, companies, and residents.

Under the $6.97  billion FY27 city budget proposal introduced by Mayor Cherelle Parker, Philadelphia would add a 20‑cent fee to every Uber and Lyft trip that starts in the city.

The city would also impose a 25‑cent fee on many retail delivery orders from platforms such as Amazon and Gopuff.

"I don’t take lightly any proposal to raise any tax or fee. We’ve taken VERY few such actions during my first two years in office. And, these proposed taxes will be paid by companies doing business in Philadelphia," Parker said during a budget address before the City Council.

The idea is that the charges are meant to be a business tax rather than a direct tax on residents. Officials say the charges are intended to raise revenue for schools, street repairs and other services without hiking property taxes or other tax rates.

Even so, if approved, the taxes might show up on app receipts, making them part of everyday budgeting. Though seemingly small, could those fees start to add up for consumers?

Philly could add fees to rideshare and delivery orders

The proposed 20‑cent per‑ride fee would apply to ride-share trips that originate in Philadelphia, including those booked through Uber and Lyft. According to city estimates, the fee could bring in around $9 million annually.

• While $9 million may seem substantial on paper, it is a small slice of the city’s overall budget.
• Proponents say it would likely add only a few dollars per month to frequent riders' bills.
• For a commuter who takes five rideshares a week, the extra 20 cents per trip could add up to approximately $52 a year.

Some Philadelphia residents on social media argue that the revenue from these fees, combined with the delivery tax, isn’t enough to fundamentally change major transit funding. But some think that the taxes could make a modest difference for local street repairs and school support.

But not everyone is convinced the fees won’t affect riders. An Uber spokesperson, Jazmin Kay, reportedly told Axios that the proposed ride-sharing fee would likely lead to higher costs for riders using the popular app.

"This additional tax, on top of the existing tax, will be passed on directly to riders who will pay more on each ride," she said.

Retail deliveries: New 25 cents per order fee?

Philadelphia’s proposal also targets retail deliveries with a 25‑cent per‑order charge.

• If approved, that fee would apply to online purchases delivered to homes.
• City officials have crafted exemptions for certain essential items, including groceries, baby products and medications.
• Companies with fewer than 1,000 transactions per year in the city would be exempt, according to state officials.

City projections suggest the delivery fee could generate about $15 million per year. That's more than the rideshare charge, mainly because of the sheer volume of packages and food orders delivered across the city each week.

For consumers, those seemingly small charges can add up quickly, especially if companies pass the cost on.

For example, households placing two to three orders a week — from packages to prepared meals — could see an extra $25 to $30 or more added to their annual bills.

Why Philadelphia is targeting gig services and hotel taxes

Proponents argue that ride-share and delivery services place unique strains on city roads and public services. Small per‑transaction fees are seen as a way to have companies internalize part of that cost.

The delivery fee also fits into a somewhat broader national pattern. Some other states and localities have been experimenting with new levies to support public services.

• For example, a $1 retail delivery fee proposed at the state level in Pennsylvania would generate far larger sums if adopted statewide.
• Philadelphia’s version would be a lower amount and be city‑specific.
• Colorado and Minnesota have also implemented state-level delivery fees.

The mayor also wants to seek approval for a 2% increase in the hotel tax. Parker's estimates suggest such an increase could generate $20 million in revenue to combat homelessness in the city.

What happens next? The package moves to the Philadelphia City Council, where lawmakers will debate, amend, and ultimately vote on the plan. The Council has until June 30 to approve a final budget.

If passed, the ride-share and delivery fees would likely take effect in the City of Brotherly Love in 2027, meaning residents could see them in their apps next year.

Read More

• States That Still Tax Groceries
• These States Are Sending Rebate Checks This Year
• State Tax Changes to Know for 2026

In the United States, taxes on real property are the primary funding source for education, local governments and local infrastructure. But in recent years, debates between stakeholders about property taxes have grown heated.

Home values are directly tied to assessed values because assessed values are calculated using home values. Steep increases in home values tend to translate into steep rises in assessed values.

For example, from 2019 to 2024, home values grew an average of 45% to 55% nationwide. The rapid market appreciation translated into large jumps in assessed values during that same period.

There have been increasing calls from interest groups for state legislatures and calls from legislators themselves across the country to abolish property taxes.

If property taxes are scrapped, how do localities replace the funding for schools and the local services we rely on, such as roads and police protection? Read on to find out more.

If property taxes are eliminated, what replaces them?

A common criticism of property taxes is that they can be regressive, taking a larger share of income from lower-income people than from people with higher incomes.

Here’s a simple property tax example:

• Homeowners A and B each pay $2,000 in property taxes.
• Homeowner A makes $40,000 a year. The property tax is 5% of their income.
• Homeowner B makes $200,000 a year. The property tax is 1% of their income.

Another problem is that the property tax rate is based on the home’s value, not the homeowner’s ability to pay. This has been a driver of property tax revolts in the past — California’s Proposition 13 comes to mind — but today it’s reached a new breaking point.

In the past five years, home values in many states have risen faster than homeowners’ income, making it difficult for some to pay the taxes due.

The pressure to address housing costs in 2026 is leading state lawmakers across the country to propose increasingly bold solutions.

While several states are offering major relief for homeowners, a core group — including Florida, Indiana and Texas — is debating measures that would effectively eliminate specific portions of the property tax.

However, “elimination” means something different in each state, and how states will replace that revenue, without gutting essential services, is a major topic of debate.

For example, in Florida, the focus is on ending county and city levies, which could force a shift toward higher sales taxes or new "user fees" for local services such as fire protection.

In Texas, the goal is to strike school property taxes from homeowners’ bills by using state budget surpluses, though critics worry about the long-term sustainability of school funding if those surpluses dry up.

Meanwhile, in Indiana, lawmakers are weighing a total repeal of tangible property taxes, but the trade-off would be a broader and significantly higher sales tax that applies to everyday services such as haircuts and auto repairs.

Here's more of what you need to know.

Is Florida considering eliminating property taxes?

As Kiplinger has reported, the Florida House recently passed HJR 203, which would phase out non-school property taxes over 10 years. The bill is now in the state Senate for its consideration, and if approved there, could end up on the state's November 2026 ballot for voter consideration.

The bill contains no provisions for replacing non-school property taxes. Since Florida is a state with no personal income tax, the state and localities could raise sales taxes. However, to replace the property tax, it seems the rate would have to be at least double what it is now, and likely higher.

Although no proposals have been floated at this time, instead of raising the sales tax, the Florida legislature could enact a new tax or taxes of some type. It could also be a combination of higher sales taxes and new taxes.

Perhaps the reason for the decade-long phase-in is to give the legislature time to craft a solution to replace the property tax revenue. Whatever the solution, it would not be surprising if it involved higher sales taxes.

To learn more, see Kiplinger’s report Florida Wants to Eliminate Property Tax: Here’s Who Would Really Pay Instead.

Indiana property tax proposal

Indiana’s HB 1288, which is currently being debated in the 2026 session, proposes to abolish the assessment of tangible property after 2026 and end the imposition of property taxes by the end of 2027.

• To replace the lost revenue, the bill would expand the Indiana sales tax to include all services except health care, mental health services, and services rendered for charitable purposes.
• It would also establish a local revenue-sharing fund into which revenues from sales tax on services would be deposited.
• Revenues from the fund would be distributed to local jurisdictions by the state.

In states with sales tax, while most tax physical goods, they often leave many types of "services" — the tasks we pay others to do — tax-free. Indiana has traditionally taxed goods over services, but HB 1288 would flip that and essentially make all services taxable by default.

This could cover a broad spectrum, from personal errands such as haircuts and dry cleaning to professional needs such as legal fees and architectural design. While this shift is designed to replace property tax revenue, if approved, it would create a recurring cost.

Instead of one large property tax bill, Hoosiers would see a steady stream of smaller taxes added to their professional and personal service receipts throughout the year.

How much do Texans pay for property taxes?

Texas Gov. Greg Abbott, who is running for a fourth term, has released a five-point plan to overhaul property taxes.

• Limit local spending growth to population growth plus inflation or 3.5%, whichever is lower.
• Require two-thirds voter approval for all local property tax increases.
• Allow voters to roll back local property taxes if 15% of registered voters in a jurisdiction sign a petition triggering an election.
• Appraise properties every five years. If appraisals remain annual, cap growth at 3%.
• Allow voters to decide whether to eliminate school property taxes for homeowners.

Regarding the elimination of school property taxes for homeowners, Abbott told reporters that the state would cover that revenue loss because public education is the state’s responsibility.

How will the state pay for it? Abbott wants to use the state’s massive budget surpluses, which have been fueled by record energy revenues and strong sales tax growth, to “buy down” local school tax rates to zero.

Between the surplus and the state’s economic growth, the governor told reporters he’s confident that Texas will be flush with money for a long time to come.

Related: 10 Cheapest Places to Live in Texas

Property taxes on the edge?

Eliminating the property tax might sound great to homeowners pummeled by rocketing home values, but if property taxes are abolished, the schools, local government and services they fund don’t go away.

The money has to be replaced, and that’s usually done by raising other taxes.

Whether these or other states can succeed in eliminating property tax remains to be seen, but it’ll certainly be interesting to watch.

While the prospect of property tax reform — perhaps in your state — is exciting, there’s no guarantee that there’ll be changes in the law this year.

If you’re wondering what you can do about your property taxes now, here are five common relief programs states offer to homeowners, although not all programs are available in every state.

• Homestead exemptions (these are the most common)
• Credits/rebates (either income-based or universal)
• Circuit breakers (your property tax is capped as a percentage of income)
• Assessment value caps/-growth limits (freezes)
• Deferral (usually for seniors; tax deferred and paid upon death of homeowner or sale of home)

Visit your state’s tax or revenue department website for further information.

Read More

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Just three years ago, Alabama made history as the first state to strip income taxes from overtime pay. Yet the celebration for overtime workers was short-lived.

Following the law's sunset last year, overtime earnings are once again fully subject to state income taxes, just as the cost of goods like groceries and utilities has surged 22% over the last five years in Alabama.

A new legislative push — House Bill 527 — aims to provide some state overtime relief through a proposed $1,000 tax deduction. But with Alabama workers facing a tightening economy, is a capped deduction enough to offset the loss of a total exemption?

We crunched the numbers to see how much this new bill actually puts back in your family's wallet.

New Alabama state tax overtime bill

Late last month, House Majority Whip Rep. James Lomax (R-Huntsville) introduced HB 527. The bill proposes an individual income tax deduction for Alabama overtime wages up to $1,000 per year. If passed, the tax break would be retroactive to January 1, 2025, and remain in effect through December 31, 2027.

The bill is designed to provide relief for working families facing affordability challenges.

"Affordability is the number one issue in our country," Lomax reportedly said, according to ABC 33/40. "...my legislation follows the lead President Trump set in the Big Beautiful Bill."

However, this isn't Alabama's first rodeo with overtime pay.

As Kiplinger reported, House Minority Leader Anthony Daniels (D-Huntsville) successfully passed a temporary Alabama law that exempted overtime pay from the state's 5% income tax.

While popular among supporters, the state's "no tax on overtime" law became a victim of its own success:

• Initially, estimated costs were projected to be around $34 million annually.
• In actuality, total costs came out to a staggering $350 million.
• Due to budget concerns, state lawmakers allowed the law to expire last year.

The proposed $1,000 cap seeks to balance worker relief while preventing the budget shortfalls seen under the state's former overtime policy. But a $1,000 overtime deduction might not be enough to hold water with Alabama's rising prices.

Alabama taxes on overtime and the cost of living

To understand the impact of the new $1,000 deduction on affordability, we looked at a "typical" Alabama overtime worker earning an average income of $52,400.

*Note: "Typical" in this sense was a worker with average overtime earnings of $52,400, according to ZipRecruiter. This simplified example assumes a single filer with overtime wages and a minimal state standard deduction and exemption. Actual financial situations may vary.

As shown above, a single overtime worker earning $52,400 receives just $50 in annual tax savings. In a state where costs like housing continue to climb, a $4.58 monthly savings may feel negligible.

For instance, consider just monthly rent and grocery data for a fictional Alabama family:

With combined rent and food costs averaging $2,142 per month, these two essentials alone account for about $25,700 annually, or 49% of the average overtime worker's take-home pay.

Is "no tax on overtime" in 2026 the best way forward?

The Institute on Taxation and Economic Policy (ITEP), a nonpartisan research organization, suggests another route to provide relief to Alabama overtime workers.

"Instead of exempting overtime pay from income tax, labor experts argue that increasing overtime rates beyond time-and-a-half and raising the annual income threshold for overtime pay (currently set at $35,685) is how to best support workers and boost wages."

By raising the federal salary threshold, state lawmakers could expand overtime eligibility to thousands of Alabamians who are currently classified as "exempt" despite working well over 40 hours per week.

The Economic Policy Institute states that raising the federal salary threshold could encourage employers to hire additional staff or increase hours for part-time staff.

In the meantime, the $1,000 overtime deduction proposal in Alabama moves to the state House Ways and Means Education Committee for further review. Stay tuned for more updates.

Read More

• Overtime Pay Deduction: What Workers Need to Know for Tax Season
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Thinking of moving to North Carolina this spring? Join the crowd. As we head into the 2026 relocation season, the Tar Heel State remains a top-three destination for new residents seeking a balance of lifestyle and financial stability.

Why? Well, there may be several reasons.

Apart from four-season weather and relatively low costs on essentials like housing and utility bills, North Carolina also offers some tax perks. Residents enjoy a flat income tax rate of 4.5% (so you know what to expect on your state tax bill) and modest property tax bills compared to the national median.

But affordable living in North Carolina can be a moving target. As popular hubs like Raleigh and Charlotte see prices climb, savvy movers are looking for the "hidden gems" where property taxes remain below $970. Here is the 2026 data on the 10 cheapest places to live in North Carolina.

See also: North Carolina’s $15,000 Forgivable Mortgage: How to Qualify in 2026

Cheapest places to live in North Carolina

After ranking property tax bills from highest to lowest per county in North Carolina, one item stands out: Rural regions are typically cheaper than urban areas. You'll generally find more affordable living in the countryside than in the hubbub of a big city.

So if you're down for enjoying historic sites, state parks, and natural scenic beauty (and want to commute for other enjoyments), check out these cheap places to live in North Carolina.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in North Carolina to live.

Avery County

Median property tax bill: $966

Median home price: $233,200

Known as a major tourist hub, Avery County has the second-highest median home price on our list, at $233,200. However, property tax bills are relatively cheap, at around $966 per the Tax Foundation.

Have you wanted to make the mountains your home? Now's your chance. Avery holds the iconic Grandfather Mountain within its county lines, along with the scenic Blue Ridge Parkway, and dramatic water features like Elk River Falls. Residents may hike, swim, and explore the area's acres of wilderness, and even traverse the Mile High Swinging Bridge, America's highest suspension footbridge.

And if you're looking for something for family fun, Avery has more to offer. From the October Woolly Worm Festival to gem mining at one of several locations, you may visit Avery County for the low property taxes, but stay for the number of things to do and see.

Jackson County

Median property tax bill: $938

Median home price: $253,900

Jackson County is located in the southwestern region of North Carolina and has roughly 45,281 residents (according to the latest Census data). Home prices are higher than in other counties on this list, with the median at $253,900. But the median property tax bill is below $940, according to the Tax Foundation.

Jackson is known for record-breaking waterfalls. Whitewater Falls, at 411 feet, is the highest east of the Rockies, and other popular spots include Silver Run and High Falls at Lake Glenville. Residents and tourists alike can go for easy access to swimming, boating, and water skiing — and for those new to river adventures, there's tubing along the Tuckasegee River.

The area is culturally alive as well. You can visit nearby Oconaluftee Indian Village to experience a 1760s Cherokee lifestyle, journey on the Jackson County Ale Trail, or visit year-round festivals put on by diverse mountain towns.

Searching for a low property tax area with plenty of water recreation and culture? Jackson County might be the perfect place for you and your family.

Jones County

Median property tax bill: $926

Median home price: $122,600

Homes in Jones tend to have a lower median price, at around $122,600. Property taxes, too, can be cheap, with a median bill of $926, per the latest U.S. Census Bureau data.

For those seeking a quiet, agricultural lifestyle, Jones County offers a unique combination of history and protected wilderness. Approximately 65% of the county is encompassed by the Hofmann and Croatan Forests, creating a natural "buffer" that preserves the area's tranquil character for hiking, birdwatching, and fishing.

Steeped in American Revolutionary heritage, the county features well-preserved historic districts and antebellum homes. The pace of life is anchored by the Trent and White Oak Rivers; notably, the Trent is recognized as one of the world's oldest rivers, according to the county website.

So whether you enjoy fishing and hunting, or peaceful days by the riverside, Jones County is a great place to relax — not just your spirit, but your wallet as well.

Duplin County

Median property tax bill: $912

Median home price: $123,200

Home prices in Duplin sit comfortably at $123,200, with median property tax bills under $915, according to Tax Foundation data. This property tax bill in Duplin is also cheaper than in all surrounding North Carolina counties.

Duplin County is the center of North Carolina's coastal wine region and home to the world's largest producer of muscadine wine.

Foodies also enjoy several culinary festivals held throughout the year, including the NC Poultry Jubilee in Rose Hill and the NC Pickle Festival in nearby Mount Olive. Activities include everything from a 5k run and pickleball tournament to carnival rides and fried chicken cooked in the World's Largest Frying Pan.

And like other counties on this list, recreational outdoor adventures abound in the form of camping, fishing, or boating near the Northeast Cape Fear River.

Come to Duplin for affordable property taxes, but stay for the eats, drinks, and local charm.

McDowell County

Median property tax bill: $871

Median home price: $168,300

The median property tax bill in McDowell is cheap, at slightly more than $870. Home prices can also be relatively low, with a median of about $168,300, per the latest data from the U.S. Census Bureau.

McDowell offers extensive access to the Pisgah National Forest, encompassing about 70,000 acres of rugged terrain and part of the iconic Linville Gorge Wilderness. Known as the "Grand Canyon of the Eastern U.S.," this landscape provides recreational opportunities through mountain biking, rock climbing, and waterfall trails.

The county's historical prestige is equally significant; the landmark Carson House once hosted figures like Davy Crockett and Andrew Jackson. McDowell has even served as the cinematic backdrop for the 1992 film "The Last of the Mohicans."

If you want to be a part of history but still enjoy the natural splendor that North Carolina has to offer, consider McDowell County — and your budget may thank you.

Swain County

Median property tax bill: $844

Median home price: $209,800

Swain County property tax bills are generally low, with the median at $844. The median home prices in the area, too, can be relatively cheap (compared to some others on this list), at $209,800, per the U.S. Census Bureau.

Explorers, get ready: This may be the best county for you yet. About 85% of Swain County's land is contained within the Great Smoky Mountains National Park and the Nantahala National Forest. Residents get discounts on scenic railway rides on the Great Smoky Mountains Railroad, including on themed excursions like "The Polar Express" and other seasonal events throughout the year.

Plus, whitewater rafting along the Nantahala River serves over 200,000 visitors annually, making it a prime spot for activities like kayaking, rafting, and even ziplining.

Are you an adventurer at heart, dying to settle down in natural beauty? Swain County could be the place for you.

Graham County

Median property tax bill: $842

Median home price: $155,800

Homes may be pretty affordable in Graham County, with a median price around $155,800, according to the latest data from the U.S. Census Bureau.

Median property taxes can also be cheap for North Carolina, since the median county bill is $842.

Graham County borders the Great Smoky Mountains National Park, with two-thirds of its area protected by the Nantahala National Forest. Also, the county features one of the few remaining old-growth forests in the eastern U.S., with some trees estimated to be over 450 years old.

Residents can jump into Lake Santeetlah for stunning shoreline views and plenty of swimming, canoeing, and recreation, too. Graham County scenery is so beautiful that major films like "The Fugitive" and "Nell" chose Graham as a setting.

For plenty of outdoor activities to do, check out Graham County — you'll be glad you did.

Robeson County

Median property tax bill: $799

Median home price: $88,600

Among the counties on our cheapest places list, Robeson County has the lowest median home price at $88,600. Property taxes, too, are relatively low, at just under $800, according to the Tax Foundation.

Robeson has the most land of any North Carolina county, offering trails, agriculture, and water activities. Residents can kayak along 115 miles of Lumber River State Park, or explore 142 acres of swimming, boating, disc golf, and walking at Luther Britt Park.

The county is also known for its unique historic ties. It's home to the Lumbee Tribe — the largest tribe east of the Mississippi, whose history residents can learn more about at one of several museums.

Come to Robeson for the low home price and property tax bill, but stay for historic charm and wide-open spaces.

Bertie County

Median property tax bill: $764

Median home price: $95,800

Located in North Carolina's "inner banks" is Bertie County, with a median property tax bill of $764 and a median home price of $95,800, per the U.S. Census Bureau. Both the home cost and property tax bill are cheaper than in all surrounding counties.

Looking for a low-cost place near the sound? Look no further. Bertie is located inside a pocket of North Carolina, with the Cashie River leading to the Albemarle Sound. Residents enjoy walking along the river boardwalk or taking a trip down to Bertie Beach for picnics, fishing, and swimming.

Golf is also popular in the area, with one course having views of the water. Plus, hunting at specialized preserves, like the Bub Jackson Hunting Preserve, has opportunities for whitetail deer, black bear, and spring turkey.

So whether you're searching for waterfront property or avoiding high property taxes, consider Bertie County, North Carolina, as your next destination.

Hyde County

Median property tax bill: $753

Median home price: $119,600

Hyde is the cheapest place to live in North Carolina, according to the Tax Foundation, with a median property tax bill of just $753 and home prices of around $119,600.

Hyde is located along the coastal plains and is famous for its water access, with the state's largest lake and the Pamlico Sound.

While the county includes the prestigious destination of Ocracoke Island and its iconic lighthouse, the mainland remains one of North Carolina's best-kept secrets. Despite being the state's second-largest county by total area, its population of just 4,500 residents ensures an uncrowded feel rather than a "tourist trap."

Ergo, if you're shopping for a place nearer the beach that's on a budget, the cheapest place in North Carolina might be the ticket.

More Cheap Places

• 10 Cheapest Places To Live in Florida
• 10 Cheapest Places to Live in Virginia
• 10 Cheapest Places to Live in Tennessee
• 10 Cheapest Places to Live in South Carolina
• 10 Cheapest Places to Live in Georgia

Washington has approved a 9.9% tax on personal income above $1 million. That is a notable move in a state that has historically avoided taxing wages, but that began taxing certain capital gains a few years ago.

The measure, Senate Bill 6346, known as the “Millionaires' Tax," will take effect in 2028, with the first tax payments collected in 2029.

Supporters highlight its potential to fund essential services and reduce reliance on regressive taxes. Opponents argue it risks chasing top earners away and reshaping Washington’s tax landscape in ways that could ripple through the economy. Some groups already plan to sue the state over the new law.

Washington Gov. Bob Ferguson, who signed the bill on March 30, sees the tax as a tool to make Washington’s tax system more progressive.

"This is truly a historic step forward on re-balancing our tax code, Ferguson told reporters just before he signed the bill. "It’s the right thing to do for Washington’s working families. It’s the right time to do it, and it’s the right policy," he added.

Notably, Washington isn't alone. This year, several states are considering or expanding high-earner taxes as lawmakers seek new revenue amid mounting fiscal demands. Here's more to know.

Washington state 9.9% 'Millionaires Tax' becomes law

SB 6346 imposes a 9.9% tax on Washington personal income above $1 million.

• According to legislative language, this will affect only the wealthiest roughly 0.5% of Washington households.
• Proponents estimate the tax could generate more than $3.5 billion annually for education, health care, and other public services, though official fiscal scores are still being finalized.
• Gov. Ferguson has noted that a portion of that, roughly $1.9 billion, could fund key sales tax relief for residents.

For supporters, the millionaire’s tax is about fairness and stability.

Washington’s lack of an income tax means it relies heavily on sales taxes and flat levies, which take a larger share of earnings from lower-income families. By targeting income above $1 million, some argue the state can raise revenue from those most able to pay.

Gov. Ferguson had proposed ways to ensure that the revenue generated by the millionaires' tax could help fund broader tax relief for Washingtonians.

For example, Ferguson has pointed to strengthening the Working Families Tax Credit, providing more sales tax relief (possibly adding a sales tax holiday), and making permanent sales tax exemptions for feminine hygiene products, diapers, and baby products. He also wanted tax cuts for small businesses.

Opponents warn that a near-10% top state income tax rate could undermine the state's competitiveness. Another argument is that the tax could cause high earners to flee to states with lower tax burdens, reducing the revenue the policy intends to raise.

But there are also potential legal hurdles: Washington’s constitution has historically prohibited graduated personal income taxes, so legal challenges are likely now that the tax has become law.

The new capital gains tax in Washington

Five years ago, as Kiplinger has reported, Washington enacted an excise tax on certain long-term capital gains — profits from selling assets like stocks, bonds, and business interests. Under that law:

• For most taxpayers, long-term capital gains over the standard exemption ($278,000 for 2025) are taxed at a 7% rate.
• For gains above $1 million, the rate jumps to 9.9%.

Here’s how the new capital gains tax structure works:

Washington's capital gains tax has already generated hundreds of millions in revenue for schools, childcare, and early learning programs. It has survived legal challenges as an excise rather than an income tax.

Because both taxes hinge on income above $1 million, high earners could see combined liabilities from wages and investments. That's a factor some say might need clarification if the millionaires' tax becomes law.

States with no income tax: How Washington compares

Even with the capital gains tax and proposed Millionaires' tax, Washington still sits among a small group of states that largely avoid taxing wages.

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming all rely on sales tax, property taxes, or resource-based taxes rather than traditional income taxes.

Yes, Washington differs because it now has both a capital gains tax and the potential 9.9% millionaire’s tax. But that would reportedly apply only to the top 0.5% of households.

For most Washington residents earning under $1 million, Washington remains a no-income-tax state in practical terms.

Washington state income tax: Bottom line

Now that the Millionaire Tax bill is enacted, most residents will see little change in their personal income tax. But the wealthiest households could face a tax landscape that resembles traditional income tax to some degree, especially when combined with the state’s capital gains tax.

But it's worth keeping in mind that Washington’s tax debate is unfolding alongside what could be a broader national shift...

In 2026, several states are considering or enacting high-earner taxes, while at the federal level, Sens. Bernie Sanders (I-Vt.) and Ro Khanna (D-Calif.) have just introduced a 5% billionaires’ tax aimed at the ultra-wealthy.

This story has been updated to reflect the signing of the bill.

Read More

• Washington Approves Capital Gains Tax Increase
• $3,000 Checks for All? Lawmakers Unveil 'Billionaire Tax' Proposal
• Washington Slashes Estate Tax: Why Your Inheritance Still Isn't Safe

Florida has long defined its tax identity around one promise — no state income tax. That policy has attracted retirees, business owners and high-earning professionals for decades. Property taxes, however, remain one of the primary ways local governments fund schools, police, fire departments, and infrastructure.

A proposal moving through the Legislature, House Joint Resolution 203, which passed the Florida House on February 19, would ask voters to approve a constitutional amendment eliminating certain city and county property taxes on homes that qualify for Florida’s homestead exemption. School taxes would still apply.

If the measure clears the Senate, it would appear on the state's November 2026 ballot. If approved, it would authorize a 10-year phaseout of certain local property taxes beginning January 1, 2027.

"We are advancing historic property tax relief by allowing voters to eliminate the non-school portion of the homestead property tax. Floridians work hard for their money, and they deserve to keep more of it." House Speaker Daniel Perez stated in a release regarding affordability measures and the state budget.

As Kiplinger has reported, Gov. Ron DeSantis has previously expressed support for eliminating Florida's property taxes.

Florida’s tax structure makes this proposal especially consequential. Because the state doesn't levy a personal income tax, property and sales taxes carry more weight in local budgets than they do in many other states. If one of those pillars shifts, the remaining revenue sources must absorb more of the load — whether through higher sales taxes, expanded taxable goods and services, or adjustments to local spending.

That dynamic can become more pronounced during economic downturns, when sales tax collections can decline and local budgets tighten.

What does all of this mean for you and your property tax bill? Here's more of what you need to know.

Florida property tax rate: By the numbers

Consider a Florida homeowner with a $400,000 primary residence. With an effective property tax rate between roughly 0.8% and 1%, depending on county millage rates, that homeowner might owe approximately $3,200 to $4,000 per year.

In many counties, about 40% to 50% of that bill supports public schools. The remaining funds support city and county services, like police and fire protection, road maintenance, parks, and infrastructure.

If the city and county portion were eliminated, the annual bill could drop by roughly half — potentially from about $4,000 to closer to $2,000, depending on local rates.

But the services funded by that portion would still require revenue.

Who benefits from no property tax?

Homeowners with higher property values would likely see the largest dollar savings because property taxes are tied to assessed value.

• Those who qualify for the Florida homestead exemption would benefit directly.
• Homeowners who live in their primary residence would benefit more than investors or owners of second or third homes.

If replacement revenue relies more heavily on consumption taxes, however, the impact could look different. Households that spend a larger share of their income on taxable goods, as well as renters who do not receive direct property tax relief, could feel more of the shift.

Sales tax collections can fluctuate with economic cycles, making them less predictable than property tax revenue.

If not property taxes, where would the money come from?

Cities still must repair roads, pay emergency workers, and maintain public infrastructure. Those costs don't disappear.

If one funding source shrinks, another must fill the gap.

Possible replacement options could include:

• Increasing the statewide sales tax, which is currently 6% before local surtaxes, can push total rates above 7% in some counties
• Expanding the list of taxable goods and services, which currently excludes items such as groceries, residential rent and many professional services
• Shifting more funding responsibility to the state budget
• Reducing local spending in areas such as public safety staffing, road repair schedules, parks and recreation programs, library hours, or capital improvement projects

If local governments trim spending, residents could notice changes in emergency response coverage, infrastructure maintenance timelines or access to community services.

Opponents of the proposal argue that shifting revenue away from property taxes could create budget gaps that force difficult tradeoffs between service levels or alternative taxes.

During floor debate, State Rep. Rita Harris (D-Orlando) reportedly said of the proposal, "We are defunding the police. We are defunding the fire. We are defunding the garbage. We are defunding the schools. We are defunding the waste management. We are defunding people cutting your trees during storm [season]. We are defunding the state of Florida."

Whatever happens, at its core, the measure represents a recalibration of Florida’s tax structure and could change how local government is funded.

Florida property tax elimination: What Florida homeowners can do

Florida House Speaker Perez has reportedly described HJR 203 as "the most aggressive legislation ever passed by a legislative chamber on property taxes in the history of the United States."

But the proposal must be taken up by the Florida Senate, which could advance a revised version this legislative session.

If both chambers ultimately approve the joint resolution, the constitutional amendment would appear on the November 2026 state ballot and require at least 60% voter approval to take effect.

In the meantime, if you're a homeowner dealing with high property taxes, you can:

• Confirm you are receiving the Florida homestead exemption.
• Review your property’s assessed value and file a property tax appeal if it appears overstated.
• Monitor local government budget discussions as the debate evolves.

For financially proactive households, the key question is not only whether property taxes decline. It is how the state replaces that revenue and how that shift could affect long-term housing costs and the services communities rely on.

Read More

• How to Reduce Your Property Tax
• Florida Tax Guide
• How Much Do Retirees Really Save in Florida?
• Cheapest Places to Live in Florida

The Michigan Department of Treasury has been processing a significant number of returns early this tax season. State data show that more than 1.6 million Michigan returns have been filed, and more than 1.1 million of those have already been processed as of February 26.

That's about 45% more than this time last year, and the Wolverine State has reportedly issued roughly $565 million in refunds so far.

While that all sounds good, the high return volume could mean that some tax refunds move more slowly than expected. Michigan also uses a modernized tax processing system with enhanced accuracy checks, which might delay return processing for some Michiganders.

So, if you're wondering about the status of your refund, here's more to know.

Michigan tax refund status: 'Pending manual review'

The Michigan Treasury typically estimates that most refunds will be issued within 4 to 6 weeks after a return is accepted. But this year, numerous taxpayers report seeing longer timelines.

On social platforms, some Michiganders have reported being stuck in “manual review” or “pending review” for weeks, with extended timelines creating frustration and uncertainty.

Some of the delays involve returns that include multiple credits (like the Homestead Property Tax Credit) or require additional checks and take longer to process.

"Those state tax returns that claim multiple credits or [require] additional verification take a little bit more time to process. We are working to ensure taxpayers who file a return receive their refund as fast as practical," Deputy State Treasurer Kavita Kale stated in a release.

Additionally, so-called "manual tax reviews" could extend the time it takes to complete a Michigan return. These reviews happen when a return doesn’t clear all of the state’s automatic checks.

The process seems to merely indicate that extra time is needed to ensure your return is correct before a refund is released.

There are a few common reasons a return might be flagged for review:

• Mismatched or missing information (e.g., names, Social Security numbers, addresses)
• Claimed credits that trigger additional verification
• Income discrepancies compared with employer reports
• Identity verification checks to prevent fraud

Some taxpayers took to social media to say that their refund status was stuck in manual review for several weeks.

Keep in mind that mailing a return or not choosing direct deposit can also delay a refund.

Michigan Identity Verification letter?

You might receive a letter from the Michigan Treasury asking you to verify your identity after filing. State officials have stated that this is a security step to protect you from tax-related identity theft and ensure refunds go to the correct person.

What to know:

• Follow the instructions in the letter promptly.
• The Treasury encourages using the Michigan Treasury eServices portal to complete identity verification.
• You don’t need an account, according to information on the state's website.

"the easiest way to verify your identity is through the new Michigan Treasury eServices web platform. Use the “Verify My Identity” link on the portal’s landing page to start the process."

Still, it's important to note that your refund won’t proceed until this verification step is complete. But beware of scams: the Michigan Attorney General has previously warned of letters that appear official but are designed to steal your personal information.

What to do if your Michigan tax refund is delayed

Here are some things to do to help keep track of your refund status.

• Check your refund status online at Michigan Treasury eServices.
• Read your mail carefully — the state often sends important notices by mail.
• Respond promptly to legitimate identity verification or information requests from the Michigan Treasury Department.

Tax Refunds: Bottom Line

Some Michigan taxpayers are reportedly experiencing slow refund processing this tax season. These delays come amid a high volume of tax filings in the state, new processing systems, and additional review steps to ensure refund accuracy and security.

If your refund is still pending after several weeks, double-check the details of your return. However, if you find that you have exceeded the expected processing time and have not received any updates, or cannot track the status of your return online, it might be worth, as a last resort, contacting the state Treasury directly for guidance.

Meanwhile, on the federal side of things, tax refunds so far this filing season are running nearly 10% higher than last year. To learn more, see our report: House GOP Predicts Bigger Tax Refunds in 2026.

Read More

• Five States Where Tax Refunds Are Delayed
• Michigan State Tax Guide
• IRS Tax Refund Schedule: When Will Your 2026 Payment Arrive?

The 2026 filing season is shaping up to be a year of "refund whiplash." While the IRS reports an average federal tax refund of $2,548 (so far), state-level checks are moving at a snail's pace in several parts of the country. For many households, these delayed funds are needed to cover essentials like groceries, rent, and other bills.

Why the delays? Well, some state software and forms have to be updated to accommodate (or exclude) the new, temporary tax breaks introduced by the 2025 Trump tax and spending bill.

For example, in South Carolina, taxpayers are being forced into a manual "add-back" process, while Washington, D.C. residents are navigating a historic mid-season policy overturn that has left 42,000 early filers in limbo.

Between these complex tax shifts, agency staffing cuts, and software glitches, your state refund could be weeks away.

Read on to see if your state is on the "slow list" and how to navigate the 2026 income return backlog.

New: Why Your Federal Tax Refund Status is Delayed — (and How to Fix It)

Idaho tax refund delay in 2026

Idaho 2026 tax refunds could be delayed by up to six weeks, according to a February memo from Lori Wolff, state budget director, to Idaho's Joint Finance-Appropriations Committee. And wait times could stretch even longer.

Key reasons for 2026 Idaho refund delays:

• Budget cuts. Idaho recently reduced the budget of almost every state agency by 1% (in addition to 3% cuts made last year), resulting in fewer temporary staff to process income tax returns.
• Late-breaking tax laws. On February 11, Idaho Gov. Brad Little signed HB 559, retroactively adopting the federal Trump tax law changes for state returns, including the new car loan interest deduction and "no tax on tips."
• System updates. Because the Trump tax law changes were adopted in February, Idaho must now update its tax software and forms to comply with the new law mid-tax season.

For the 158,000 Idahoans who have already filed a state return, the Idaho Tax Commission will provide "more guidance over the next few weeks" for how these taxpayers might take advantage of the new tax breaks on their state returns.

In the meantime, taxpayers who are concerned about the tax due date and the timing of the new law changes can apply for an automatic filing extension. To qualify, a taxpayer must pay 80% of the 2025 estimated tax, or 100% of the total tax reported on last year's return, by April 15, 2026.

Why is the New York state refund taking so long?

New York taxpayers who filed early in the season may be experiencing tax refund delays due to tax software issues.

Key reasons for 2026 New York refund delays:

• New York inflation checks. New York inflation refund checks were mailed out as a one-time payment late last year.
• Third-party delay. According to several local news reports, software provider Intuit TurboTax didn't have the update installed to account for the refund checks.
• The "processing" loop. Taxpayers who filed before the TurboTax software updates were fully implemented — especially those trying to claim new federal tax breaks — may have been stuck in a processing loop, causing delays.

Note: Third-party tax software updates reportedly went into effect in early February 2026. But affected New York income returns may still be stuck in a "processing" phase. If so, taxpayers should ensure software is fully updated to the latest 2026 version before filing.

State income tax refund delay in Oregon

Oregon taxpayers who file paper returns won't have their state income return processed until late March this year, as the first paper-filed refunds are not expected to be issued until early April 2026.

Key reasons for 2026 Oregon refund delays:

• IRS delay. According to the Oregon Department of Revenue (DOR), the IRS was late in providing necessary tax form information to the state agency.
• Trump tax law changes. The delay in providing the necessary information impacts the 2025 Oregon returns. While the Beaver State did not conform to all tax law changes, several were adopted, including "no tax on overtime" and higher standard deduction amounts.
• System updates. Now, the Oregon DOR must finalize tax forms and processing systems to account for these updates, though the impact is expected to be limited to just paper-filed returns.

The state DOR is strongly advising those who still file by mail to switch to electronic filing in 2026. E-filing may be the most effective way to bypass processing bottlenecks and accelerate the delivery of Oregon "tax kicker" refunds.

South Carolina tax refund delayed in 2026

South Carolina tax refunds are expected to take longer this year, according to the state's Department of Revenue (DOR) website.

Key reasons for 2026 South Carolina refund delays:

• Trump tax law changes. Because the state legislature adjourned just before the federal tax bill was finalized, South Carolina remains "decoupled" from the new federal rules. This means that major new tax breaks — like the "senior bonus" deduction and overtime tax deduction — are not currently recognized at the state level.
• Federal taxable income. South Carolina returns begin with federal taxable income. To ensure taxpayers aren't accidentally claiming Trump tax law breaks on their state returns, the state's DOR is requiring filers to manually add back those deductions as income on their 2025 returns.
• Requiring amended returns. Third-party tax software programs initially struggled to calculate these "add-backs" correctly, leading to a surge in "Notice of Discrepancy" letters from the state's DOR and processing delays.

Taxpayers are encouraged to review their forms for errors, including accidental usage of federal tax breaks from the recently passed Trump tax law. Additionally, avoiding paper filing and choosing direct deposit may hasten tax refund distribution.

Why is my D.C. tax refund taking longer than expected?

Although technically not a state, about 361,000 Washington, D.C., taxpayers will likely soon be impacted by delayed tax refunds.

Key reasons for 2026 D.C. refund delays:

• Historic legislative overturn. For the first time in history, the United States Congress has overturned a locally passed D.C. tax and budget law. The overturned legislation had decoupled the District of Columbia tax policy from some federal provisions in the Trump tax law.
• System updates. As the law was overturned only this month, the D.C. tax systems have not been updated with the latest Trump tax bill provisions, causing uncertainty among taxpayers mid-tax season.
• Filers may have to refile. At least 42,000 residents who have already filed a D.C. tax return may have to refile once applicable software and forms are updated; for the remaining taxpayers yet to file, no official guidance has been given.

D.C. Chief Financial Officer Glen Lee outlined the negative consequences of the disapproval resolution in a joint letter to congressional leaders. Lee proposed that District income tax filing deadlines may be extended "into fall 2026."

For more information, check out Kiplinger's report, U.S. Congress Ends Emergency Tax Bill Over $6,000 Senior Deduction and Tip, Overtime Tax Breaks in D.C.

Read More

• 9 States Without Income Tax
• IRS Income Tax Refund Schedule 2026: When Will Your Refund Arrive?
• 3 Smart Ways to Spend Your Retirement Tax Refund
• New 2026 State Tax Changes to Know

Illinois remains one of the few states that still imposes its own estate tax, and its rules are very different from the federal system's.

The federal estate tax exempts $15 million per person, or $30 million per married couple. Illinois uses a much lower $4 million estate tax threshold per married couple.

The word "threshold" matters: It's not a true exemption. If an estate is valued at $4 million or less, there is no Illinois estate tax. But if the value exceeds $4 million by even a single dollar, Illinois will tax the entire estate, not just the amount above the threshold.

This is known as the Illinois "cliff tax." At an estate value of exactly $4 million, the tax is zero. But at $4 million plus $1, the entire estate is taxable.

An estate just barely above the threshold, at, say, $4.1 million, might trigger about $200,000 to $240,000 of Illinois estate tax under current estimates, even though it exceeded the threshold by only $100,000. (This example is for illustration only.)

Many Illinois residents find themselves approaching the threshold without realizing it. After decades of saving, home appreciation and life insurance growth, it is common for ordinary families to exceed $4 million.

For example, a married couple with a $1.2 million home, $2.4 million in retirement savings and a $1 million life insurance policy (which would be taxable in certain circumstances) would be over the threshold, even though few people in that position would describe themselves as very wealthy.

Avoiding the loss of a second threshold

A further complication arises with married couples. Under federal law, the unused portion of the first spouse's exemption automatically transfers to the surviving spouse.

Illinois does not allow this portability. If nothing is done before the first spouse dies, the unused portion of the first spouse's threshold is permanently lost.

In effect, many married couples unintentionally end up with only a single $4 million threshold rather than two.

That is why a credit shelter trust — sometimes called a bypass trust — could be the most important estate planning tool in Illinois. A properly drafted estate plan can preserve the first spouse's threshold and keep it available for the surviving spouse.

When implemented correctly, this strategy may effectively increase the Illinois protection to about $8 million per married couple, not just $4 million. Without planning, the second threshold disappears.

A simple will does not accomplish this. A will directs distribution, but it does not preserve the first spouse's threshold. A revocable living trust with Illinois-specific estate tax provisions, or a credit shelter trust triggered at the first death, is necessary for married couples approaching or exceeding the Illinois threshold.

It is also important to know what Illinois counts in determining whether the threshold has been exceeded. The state includes homes, investment property, bank and brokerage accounts, retirement accounts, business interests, farmland, personal property and life insurance death benefits if the insured owns the policy.

A family who appear "comfortable but not wealthy" during life could find themselves well into taxable territory at death.

Strategies to reduce or manage Illinois estate tax exposure

Once the Illinois threshold is crossed, the state applies a progressive estate tax rate that ranges up to the midteens. That is why planning and timing matter so much.

Life insurance is particularly critical, because a policy owned by the insured is part of the taxable estate and may push the estate over the threshold instantly at death. An irrevocable life insurance trust (ILIT) can own the policy instead, keeping the death benefit outside the taxable estate.

Charitable strategies can also help reduce the taxable estate while supporting causes families care about. Donor-advised funds (DAFs), charitable trusts and direct bequests can shift assets away from the taxable estate.

Illinois does not impose a separate state-level gift tax, so lifetime gifting may be an effective way to reduce exposure over time.

Relocation is sometimes worth considering, because states like Florida, Tennessee and Texas impose no state estate tax. But establishing domicile requires more than a change of address, and Illinois property or business ownership may still create planning obligations.

Always seek legal counsel regarding domicile and state law nuances.

Timing matters more than you think

Perhaps the most important point is timing. The moment of the first spouse's death determines whether the second threshold will be preserved or lost. Planning must be done in advance.

Even families currently worth well under $4 million should remember that assets compound. Even if your estate is only $1 million today, it could be $4 million or more 20 years from now due to investment growth and rising property values.

Without proactive planning, that growth could push an otherwise modest estate into taxable territory.

The Illinois estate tax is not an issue only for the wealthy. It increasingly affects middle- and upper-middle-income Illinois families who have saved responsibly, purchased insurance and owned real estate for many years.

Understanding that Illinois uses a $4 million per couple threshold — not a true exemption — and that crossing the threshold by even $1 means Illinois will tax the entire estate, is essential.

With thoughtful planning, particularly via a credit shelter trust, many couples can effectively secure about $8 million of protection and keep substantially more of their estate for spouses, children and charitable causes rather than sending an unnecessary share to the state.

This article is for informational purposes only and should not be considered tax or legal advice. Individuals should consult qualified legal and tax professionals regarding their specific circumstances. The hypothetical examples provided are illustrative only and do not guarantee or predict any specific outcome.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

Related Content

• Illinois Tax Guide
• States That Won't Tax Your Retirement Income in 2026
• 10 Least Tax-Friendly States for Middle-Class Families
• The Minimum Savings You Need to Retire in All 50 States
• 12 Great Places to Retire in the Midwest

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

On January 1, Arkansas and Illinois became the latest states to join the trend of repealing or reducing sales taxes on groceries to ease the financial burden posed by food costs on shoppers. Now, nine U.S. states levy sales taxes on groceries at a full or reduced sales tax rate.

This trend is happening as food prices remain high across the country. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), the average household now spends over $550 a month on groceries — a figure that continues to climb due to inflation.

But in states like Arkansas and Illinois, which have made legislative changes to offer some relief, the grocery tax reductions were relatively small. How are shoppers reacting to these changes, and what do high food prices and grocery taxes across the country mean for your budget? Read on to find out more.

Why grocery prices are so high

The BLS reported in January 2026 that grocery prices rose 2.4% between December 2024 and December 2025. The rise in specific grocery items is eyebrow-raising. Coffee is up 20%, partly due to tariffs. Some cuts of beef are not far behind at around 18%.

The lone bright spot might be the price of eggs, which hit a national average retail price of $6.23 per dozen in March 2025, and today averages $2.71 per dozen.

There are several factors why groceries have become so expensive.

Since 2020, the United States food system has been subjected to multiple major shocks:

• Supply chain chaos (the COVID-19 pandemic)
• Labor shortages
• Global conflict (Russian invasion of Ukraine destabilized global commodity markets)
• Energy spikes (raising costs of refrigeration, transportation, etc.)
• Climate impacts (droughts, wildfires)
• Livestock disease outbreaks (bird flu, parasites)
• Trump tariffs on imported food

In the face of these stacked disruptions, food prices rose. Yet even as pressures eased, prices didn’t come down; they have continued to rise, more slowly.

Sales taxes on groceries contribute to the high cost of food and play a role in food insecurity. The United States Department of Agriculture’s (USDA) Economic Research Service has found that the lowest-income households spend as much as a third of their income on groceries, compared to one-seventh spent by higher-income households.

Against this backdrop, and as Kiplinger has reported, some states have recently taken action to assist residents with their nutritional needs by repealing grocery taxes.

Arkansas grocery tax 2026: a drop in the bucket?

In Arkansas, counties and municipalities have the power to enact their own sales taxes. Out of 575 local jurisdictions, most subject consumer purchases to tax, including grocery taxes.

Local sales tax rates vary widely, from 0% to 6.125%. All counties and cities that impose a tax levy on groceries at the full rate.

When the bill repealing Arkansas’ state-level grocery tax was introduced in the state legislature, Gov. Sarah Huckabee Sanders stated the legislation ends the state’s most regressive tax and "eases the burden on families just trying to put food on their tables."

The Arkansas tax on groceries was .125% — an eighth of a penny per taxable item.

Some commenters took to a Memphis, Tennessee, regional news outlet’s Facebook page to air their opinions about the repeal:

• "Everyone enjoy that 3 dollars of savings per year. Try not to spend it in one place."
• "It’s better than nothing. Be grateful."
• "Still have the rest of the taxes on them, it doesn't make a difference."
• "So much hype over nothing. Save $15.00 [per year] on $12,000.00 ($1K/mo) of groceries."

One Arkansan shopper was more sanguine about the grocery tax repeal, telling a local news reporter, "You’re saving me money. If you’re on a fixed income, every penny helps." Other shoppers told the reporter that customers shouldn’t expect a windfall, but that savings will add up over time.

Among affected grocery customers, there’s a clear divide: those who think the tax break is too small to matter and those who are happy to get a break, no matter how small.

Illinois grocery tax criticism: Some shoppers aren't impressed

Until this year, Illinois collected the state’s 1% sales tax on groceries and distributed it to local governments, which used the revenue to balance their budgets.

About two years ago, Gov. JB Pritzker signed legislation repealing the tax, effective January 1, 2026.

“Even with inflation cooling off, every dollar counts, so I’m proud we’re doing what we can to make trips to the grocery store a little easier,” he said.

The new law also gave local governments the option of imposing a 1% grocery tax to make up for the revenue that would be lost. The legislation further provided that the locals had until October 1, 2025, to file a notification with the Illinois Department of Revenue that they would impose the tax.

As of November 2025, over 500 municipalities, over half of those in the state, and three counties had filed with the Department their intention to levy the 1% grocery sales tax.*

*Note: Local jurisdictions have a second opportunity to file a grocery tax notification until April 1, 2026. The tax would take effect on July 1, 2026.

How do Illinoisans feel about the repeal? Not having to pay the 1% grocery tax means a shopper saves $1 for every $100 spent. Some people took to Facebook to air their views:

• "Oh, wow, is it really going to help?"
• "Look at the cost of everything. This is peanuts."

For one local jurisdiction, deciding whether to impose the grocery tax wasn’t easy.

Local news coverage of the Aurora, Illinois, city council meeting showed some members reportedly wanted to pass the savings on to residents, but the $4.5 million loss couldn’t be ignored. In the end, the council voted to levy the tax.

Grocery prices: Bottom line

State sales tax repeals reflect a broader national conversation about food and affordability in the U.S. The USDA projects that already high food prices will rise in the coming year.

Recently, Sen. Elizabeth Warren (D-Mass.) questioned U.S. Treasury Secretary Scott Bessent in a Senate hearing about President Donald Trump's statement that grocery prices have come down. Warren noted that many shoppers still feel sticker shock even as Trump officials claim inflation is cooling.

Bessent defended the administration's view that some prices have eased and argued that broader economic trends are impacting costs, though he did not offer insights into a plan to bring down food costs.

So, what can you do to save money on your groceries?

It may help to plan meals and buy some items in bulk, use store apps and loyalty deals, compare prices at different stores or discount chains like Aldi or warehouses that offer bulk pricing discounts, like Costco.

Focusing on more affordable staples like beans, rice, and frozen vegetables might also help with managing your food budget.

Read More

• 'Food Tax': Which States Still Tax Groceries?
• Five States With No Sales Tax: What to Know
• Don't Let High Chocolate Taxes Break Your Valentine's Budget

People who live in one state but work in another can feel caught in a tax tug-of-war. Both states may have a legitimate claim to the income taxes — the first state because that’s where they reside, the second because that’s where the money was earned.

That means there’s a potential for double taxation. Fortunately, some states have taken steps to mitigate the possibility. But…other states have not.

If you’re living and working in two states, here is how you might fare during any tax season.

When one state has no income tax

If you live or work in a state without personal income tax, your filing process may be significantly simplified. Why? You generally only need to file one state tax return in the state that taxes income.

Currently, here are the nine states that don't tax personal income.

• Alaska
• Florida
• Nevada
• New Hampshire
• South Dakota
• Tennessee
• Texas
• Washington*
• Wyoming

*Note: As Kiplinger reported, Washington has a capital gains tax that hits some very high earners, even though the Evergreen State doesn’t have a personal income tax.

As an example, however, take Washington and Oregon. Washington doesn’t have a personal income tax, but Oregon taxes personal income as high as 9.9%.*

So if you were living in Washington and working in Oregon, you'd file an Oregon income tax return for the money you earned in that state, and only that state.

That’s important. If you earned money from your side hustle in Washington, that income typically isn’t included on your Oregon return. It’s tax-free.

Tax reciprocity can be sweet: How to file in only one state

If you live and work in states with reciprocity, that could be good news come tax time. Reciprocity means each state gives up the right to tax income that it would otherwise be entitled to.

Reciprocity can be bilateral or unilateral.

Bilateral reciprocity is usually achieved through an agreement between two states that impose income tax. Say you live in Pennsylvania and land a job in Maryland. The two states have a reciprocity agreement. That means:

• Pennsylvania will tax your income, not Maryland.
• Your employer should withhold only Pennsylvania income tax.
• In the reverse living situation, a Pennsylvania employer would withhold Maryland income tax.

Here, you only have to file one state return: Pennsylvania.

Unilateral reciprocity is where a state’s reciprocity is contingent upon the second state’s giving the same treatment to the first state’s residents. For example, Indiana will generally exempt non-Indiana residents from Indiana income tax if they’re from a state that gives the same tax-exempt treatment for Indiana residents.

Montana, on the other hand, takes a narrower approach. The Big Sky State will enter into reciprocity agreements only with states that border it. Even then, Montana has just one reciprocity agreement with its immediate neighbor, North Dakota.

• Right now, 16 states have entered into reciprocity agreements with other states, primarily located in the East Coast’s Mid-Atlantic region and the Midwest.
• But reciprocity agreements can end, and if they do, you’re in the same boat as if they’d never existed.
• For instance, Minnesota and Wisconsin ended their 40-year agreement in 2010. However, after years of negotiation, the two states restored their reciprocity agreement starting in 2025. Residents commuting between these states can once again simplify their filings to just their home state.

No reciprocity? Prepare for the 'two-return' tax headache

If there’s no reciprocity between states, that’s when the tax headaches often begin. You have to file two state income tax returns:

• A nonresident return to the state where you’re employed (reporting only income you earned there), and
• A resident return to the state where you live (reporting all income).

Depending on the type of job you have, you might have to file even more nonresident returns. For instance, imagine you sell heavy equipment in a four-state territory, and none have reciprocity agreements — that's four returns.

This means you must keep track of which states you visit during the year and the length of each visit. Then you calculate the taxes due to each state and complete your returns. It’s standard practice (but not required) for your home state to give you credit for taxes paid to other states.

Additionally, in most states, you are liable for income tax on your very first day. However, states often have a grace period before a tax withholding requirement kicks in. That means your employer isn’t paying tax from your paycheck — but you could still owe income tax.

Here are a few examples of states that have a delay in tax withholding:

• Arizona grants 60 days
• Louisiana grants 25 days
• West Virginia grants 30 days

Convenience of the employer rule

Some states, like Connecticut, New York, and New Jersey, employ the "convenience of the employer" test. Under this rule, if your employer is in one state and you work in another for your convenience, the employer's state can still tax your income.

For instance, if you live in New Jersey and work in New York, here's how the "convenience of the employer" rule could look:

• If you live and work for your New York employer in New Jersey because that’s more convenient for your employer, New York won’t tax your income.
• But the working arrangement has to be more convenient for the employer, not the employee.
• If New York decides the arrangement is more for the employee’s benefit, the employer must withhold tax from the employee’s income.

Here’s a real-life court case. Zelinsky, a law school professor in New York, commuted to New York from his home in Connecticut and worked on school-related tasks in Connecticut twice a week. New York demanded taxes from the days Zelinsky worked in Connecticut. The professor argued that working from home on those days was necessary for his duties at the law school. New York countered that the professor’s employer didn’t require him to work in Connecticut, and that’s the standard for the convenience of the employer in New York.

The verdict? New York won the lawsuit, and Zelinsky had to pay New York income taxes for the days he worked in Connecticut. The case is In re: Zelinsky, 3 No. 129 (N.Y. Ct. App. November 24, 2003).

Zelinsky is an old case, but it still applies. If you’re a graphic designer living and working in New Jersey in 2026 while employed by a graphic design company in New York, unless you can show your employer wouldn’t accommodate you in New York, the state will tax your income.

Six states currently apply some form of the convenience of the employer rule:

• Connecticut
• Delaware
• Nebraska
• New Jersey
• New York
• Pennsylvania (*Note: Pennsylvania has a reciprocity agreement with Maryland)

Note: Two states, Connecticut and New Jersey, have mirror reciprocal rules; that is, both states will apply their convenience of the employer rule if the other state (like New York) does first.

Remote work tax rules

Remote work state income tax rules can be similar to living and working in a single state. For most remote workers, you are generally taxed based on where you are physically performing the work, not where your company is headquartered.

• A single tax return in the state of residence is usually all that’s needed.
• No state return is required if the employee lives in a state with no income tax, like Tennessee.

And if the two states have a reciprocity agreement, like Ohio and Kentucky, the employee is taxed in the state of residence.

However, double taxation can arise in states that follow the convenience of the employer rule. The state where the employee lives claims the right to tax based on residency, and the employer’s state claims the right based on the employer’s location. The remote employee escapes double taxation if the employee can show it’s necessary (e.g., the employer’s cost considerations) for the employee to work remotely.

Hybrid work tax rules

A hybrid employee works from home part of the time, so their tax situation can look a little different from that of a fully remote worker.

For example: Assume an employee who usually works two days a week in their home state goes to their employer’s office in a second state three times a week.

• If the employee lives and works in two states with a reciprocity agreement, the employee is taxed in the state of residence.
• If the states don’t have a reciprocity agreement, the employee divides income in the same way as an employee who physically lives and works in two different states.

But like with fully remote employees, there’s the specter of double taxation when one or both states follow the convenience of the employer rule, unless the employee can show there’s a legitimate business reason for the employee to work remotely.

So if you’re living and working in two states and facing the possibility of having your income taxed by your state of residence and your state of employment, talk to a tax professional about your options.

Read More

• Are No Income Tax States Better to Live In?
• The Nine States With No Income Tax
• 2026 State Tax Changes to Know Now

Millions flock to Colorado each year for world-class skiing and romantic winter getaways. But for many, a weekend on the slopes may spark a more permanent question: Could I actually afford to live here?

While Colorado may be the third most expensive state to live in, according to a Colorado Chamber of Commerce cost of living report, the state's surprisingly low property tax rates in some areas may make a move more affordable than you think.

So whether you're a budget-conscious remote worker or looking to save on airfare next year, these ten cheapest places to live in Colorado could offer the best "bang for your buck" in 2026.

Cheapest places to live in Colorado

After ranking property tax bills from highest to lowest per county in Colorado, it's definitely clear: Rural areas win out. You can generally find cheaper living in the countryside than in the hustle and bustle of Denver or Colorado Springs.

Though if you're ready to enjoy historic sites, national forests, and backcountry skiing (and maybe want to commute to ski lodges and resorts), check out these cheap places to live in Colorado.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in Colorado to live.

Conejos County

Median property tax bill: $655

Median home price: $162,100

Conejos County, Colorado, can have relatively low home prices, with the median around $162,100. The median property tax bill is also cheap, at just under $660, according to the latest data from the Tax Foundation.

Conejos offers a blend of deep history and high-altitude value. Known for its rich Spanish heritage, the county is home to Colorado's oldest church.

Conejos also hosts the historic Cumbres & Toltec Railroad — a 64-mile steam-powered journey through the Rio Grande National Forest. The landmark railway passes scenic trout fishing in the Conejos River valley, where residents can hike, camp, and birdwatch.

So if you're looking to settle into one of the oldest settled areas in Colorado, with deep ties to Spanish history, consider moving to Conejos — where your wallet might thank you, too.

Dolores County

Median property tax bill: $558

Median home price: $231,900

Dolores County has the second-highest median home price on our list at $231,900. But the median property tax bill hovers at $558, according to the U.S. Census Bureau. The low property taxes might be because effective property tax rates in the area are at just .24%, well below the national average.

Love being near the shore? Look no further. Water enthusiasts gravitate to the region's McPhee Reservoir — the largest body of water in the San Juan National Forest — for boating and fishing, while nearby Groundhog and Summit Lakes provide quieter retreats.

And for a change of pace, residents can also explore the archeological finds of the Canyons of the Ancients National Monument, where prehistoric structures offer a window into ancestral Puebloan life.

Come to Dolores to enjoy a swim and some history, but stay for the low property tax bill.

Bent County

Median property tax bill: $532

Median home price: $137,900

Home prices in Bent sit comfortably at $137,900, with median property tax bills around $532, according to the Tax Foundation. Bent's relatively low population density, currently estimated at 5,800 residents, probably contributes to the area's low property taxes.

But don't let the remote location fool you — especially if you're a nature lover. The region offers hiking trails where residents can view ancient drawings, excellent hunting spots, and fishing and birdwatching at the region's hidden aviary gem, John Martin Reservoir.

Overall, Bent may be the ideal destination for those looking to trade high property taxes for a slower, nature-focused pace of life.

Costilla County

Median property tax bill: $531

Median home price: $171,300

Located in south-central Colorado, Costilla has relatively low home prices, with a median just above $171,000. Property tax bills are relatively cheap, too, at about $530, according to the Tax Foundation.

Costilla is a rural area. You might enjoy the area if you've ever considered sustainable homesteading, as the county is known for cheap land and an off-grid living community.

Residents have a front-row seat to the region's rugged beauty, with big-game hunting for bighorn sheep and mountain lions being a staple. Locals can also explore Colorado's oldest town, the historic San Luis, and go sandboarding, sledding, and hiking in the nearby Great Sand Dunes National Park.

Wanting to take a trip on the wild side? Costilla may be the perfect low-cost option for you.

Crowley County

Median property tax bill: $525

Median home price: $106,700

Homes in Crowley County tend to have a lower median price, at around $106,700. Property taxes, too, can be cheap, with a median bill of $525, per the latest U.S. Census Bureau data.

Located along U.S. Highway 96, Crowley is a key waypoint on the coast-to-coast TransAmerica Trail, making the county a premier destination for long-distance cyclists. Beyond the trails, residents enjoy an additional financial perk: "no-fee" access to Lake Henry and the Ordway Reservoir for boating and water sports.

So if you're looking for a picturesque countryside lifestyle and are on board for low property tax bills, make your next move to Crowley.

Las Animas County

Median property tax bill: $524

Median home price: $214,500

Home prices are relatively low in Las Animas, as the median price tag is about $214,500. The median property tax bill is also cheap — under $525 — and less than in most neighboring counties.

Relocating to Las Animas offers a rich cultural experience. The county seat of Trinidad has been transformed into a thriving cultural hub in recent years, anchored by its state-certified "Creative District" distinction and deep historical ties to the Santa Fe Trail.

Residents can visit Fishers Peak State Park, which offers nearly 20,000 acres of backcountry hiking and wildlife viewing against a backdrop of the Sangre de Cristo Mountains.

Come for the cheap property tax bill, but stay for the culture and outdoor charm of Las Animas, Colorado.

Otero County

Median property tax bill: $518

Median home price: $160,700

The median home price in Otero County is low relative to other counties on this list, at about $160,700. According to the U.S. Census Bureau, median property taxes are also quite affordable, around $518.

Are you a hiking enthusiast? Otero might be the place for you. The region is home to the Comanche National Grassland, a sprawling 440,000-acre expanse where residents can explore 100-foot canyon walls and the Picket Wire Canyonlands. Most notably, the area features North America's largest dinosaur track site, allowing explorers to walk alongside prehistoric history.

Ergo, if you're an explorer at heart who wants to save a bit on property taxes, you might make Otero County your next destination.

Jackson County

Median property tax bill: $513

Median home price: $250,000

Jackson County has the most expensive median home price on our list at $250,000. However, the median property tax bill is just $513, according to the latest five-year estimate numbers released by the U.S. Census Bureau. That's because Jackson has the lowest effective property tax rate on our list, at only .21%.

Known as the "Moose Viewing Capital of Colorado," this high-altitude county is famous for ranching, outdoor recreation, and, of course, tons of moose. Residents can go backcountry skiing and snowmobiling in the winter, and horseback riding and hiking in the summer.

For much to do in Colorado's "Moose Capital," come to Jackson County and pay relatively low property taxes.

Baca County

Median property tax bill: $496

Median home price: $122,000

Baca can be relatively cheap in terms of home prices, with the median around $122,000. Meanwhile, the median property tax bill in the area is just $496, according to the Tax Foundation.

Baca is known for its small-town vibe and community-led atmosphere. In addition to the Comanche National Grassland, which hosts many hiking trails and offers viewing of ancient petroglyphs, the area also hosts a late-summer fair and rodeo, contributing to a neighborhood feel for any traveler who stumbles upon this hidden gem in Colorado.

If you're looking for a low-cost area for your family in Colorado, consider Baca — you might just find your "place."

Prowers County

Median property tax bill: $494

Median home price: $150,900

Prowers is the cheapest place to live in Colorado according to the U.S. Census Bureau, with a median property tax bill of $494 and home prices of around $150,900.

Located on the Kansas border, Prowers is a top agricultural region in Colorado, known mainly for poultry, cattle ranching, and sorghum. Residents can explore local history at the Big Timbers Museum or go golfing at the Spreading Antlers Golf Course.

Plus, birdwatchers flock here every February for the annual Snow Goose Festival, which is one of the best times to view some of the 400 documented avian species in the area.

So if you're a bird lover with dreams of a country life, check out Prowers — you might just save on your next property tax bill.

More Cheap Places

• 10 Cheapest Places to Live in Washington
• 10 Cheapest Places to Live in Texas
• 10 Cheapest Places to Live in Arizona
• 10 Cheapest Places to Live in Florida

Oregon’s $1.41 billion tax surplus is officially returning to taxpayers. Thanks to the Oregon Surplus Kicker program, millions of eligible filers can now claim the tax credit on their 2025 state income return.

The credit pays out every two years, and only if state revenue projections rise above 2% — so the Oregon kicker isn't always a guarantee. Like prior years, strict eligibility requirements mean not all Oregon taxpayers qualify, either.

Here is what you need to know about the 2026 calculation and how to ensure you don't leave your potential share of the surplus on the table.

Key Points for Oregon tax kicker

• The 2026 Oregon tax kicker is based on your 2024 income tax liability.
• You may receive your Oregon kicker as early as February 18, 2026.
• The status of your Oregon kicker tax can be tracked two weeks after filing your state income return.

Oregon kicker 2026 FAQs

Oregon kicker in 2026: Who qualifies?

The Oregon kicker tax is a refundable credit that either shrinks your state tax bill or boosts your refund. Most Oregon taxpayers who file their 2025 state return are automatically given a kicker; however, there are a few eligibility requirements:

• You must have filed and owed taxes on a 2024 Oregon income return (before any tax credits were applied).
• You must file a 2025 Oregon income tax return, even if you're not required.

No longer a resident? Not a problem. Simply file an Oregon income return during the 2026 tax filing season (ensuring you meet the above eligibility requirements), and your kicker will be directly deposited into your bank account or mailed to your address, depending on your chosen tax filing preference.

How to calculate my 2026 Oregon kicker credit?

The Oregon tax kicker is based on 9.863% of your 2024 income tax liability. So, if you had a high state income tax liability that year, you'll likely get a bigger Oregon kicker (and if you had a low income tax liability, your kicker amount will be lower).

Let's look at an example:

• Say you owe $6,000 in Oregon income taxes on line 22 of your 2024 return (Form OR-40).
• Multiply $6,000 by the 9.863% Oregon kicker rate.
• Your Oregon kicker amount will be $591.78.

You can also use Oregon's "What's My Kicker?" tool to calculate your Oregon kicker surplus, provided you have some information on hand:

• Your full name.
• Your Social Security number.
• Your filing status for tax years 2024 and 2025.

The Oregon kicker tax is applied as a refundable credit against your state income tax refund (or state income tax liability). The kicker is delivered via your selected deposit method (mailed check or direct deposit) that you chose while filing your state return.

When does Oregon state start accepting income tax returns?

You won't receive your Oregon tax kicker until you've filed your state income return this year and met all other eligibility requirements.

• Filing is open. You can begin your Oregon income return now if you have all the necessary tax documentation.
• Refund start date. The Oregon Department of Revenue (DOR) may begin issuing refunds as early as February 18, 2026.
• Important note. The early February date applies only to e-filed returns.

Why you should file digitally in 2026. While Oregon continues to support paper returns, the state's DOR strongly recommends switching to e-filing this year. That's because the IRS was reportedly delayed in relaying important federal data to the state, so Oregon won’t even begin processing paper-filed income tax returns until late March. Filing digitally can avoid this bottleneck.

But you don't have to pay for tax software to get your Oregon kicker faster. Taxpayers can use:

• Direct File Oregon. A free service available directly through your state tax account (for most full-year residents).
• Free file taxes in other ways. Various online providers offer free e-filing for eligible taxpayers.

Where is my Oregon kicker tax refund?

The Oregon DOR recommends following these steps to track the status of your state tax refund:

• Wait two weeks before checking your refund status. About 95% of Oregon e-filed taxpayers receive their refunds within this time frame.
• Use the "Where's My Refund?" tool. If you still don't have your Oregon refund (and were expecting one), you can check the status after two weeks.
• Watch for your refund status to change. Reach out to the Oregon DOR if there's no change in your state income tax refund status after 20 weeks.

You can contact the Oregon DOR at 503-378-4988 or 800-356-4222 or via email at questions.dor@dor.oregon.gov. However, state officials caution that phone lines will be busy from February through June.

Why is my Oregon tax kicker so low?

If you owe any outstanding state debt, like child support, court fines, or school loans, part of your Oregon kicker tax may be used to satisfy those debts. Your state income tax refund (non-kicker amount) may be used to offset those liabilities, too.

The Oregon DOR typically sends you a Notice of Refund Offset letter detailing the debts paid from your state income tax return. Any remaining balance is issued to you around the same time.

Read More

• Oregon Tax Guide
• Tax Season 2026 Is Here: 8 Big Tax Changes to Know Before You File
• IRS Income Tax Refund Schedule 2026: When Will Your Refund Arrive?
• 2025-2026 Tax Brackets and Federal Income Tax Rates

While Tennessee homeowners grapple with skyrocketing local assessments, state lawmakers are moving to build a permanent firewall.

Local property appraiser reports indicate that property values in high-growth hubs, like Davidson County, have increased by as much as 45% over the last four years — a surge that often translates into a larger local tax bill.

In response, the Tennessee General Assembly is racing to pass a constitutional ban on any future statewide property tax, alongside emerging proposals to cap local rate hikes and grant full reimbursements for homeowners aged 65 and older.

These shifting rules could impact your Tennessee property tax bill next year. Read on to learn how.

Tennessee property tax ban 2026

Tennessee hasn't collected a dime in state property taxes since 1949, but that absence is a matter of tradition. Without a formal ban, a statewide property tax could be levied in addition to local rates by a simple legislative majority.

Rutherford County Property Assessor Rob Mitchell has described this dormant authority as a "sleeping dragon" that could awaken at any moment. As Mitchell told Fox17, the sudden activation of such a tax would place a strain on homeowners, retirees, and small businesses already struggling with rising local assessments.

Last year, state lawmakers officially certified a constitutional amendment to prohibit any future statewide property tax in Tennessee. This moved the measure from the statehouse to voters in November 2026.

However, some argue that a statewide ban on property taxes isn't enough; that's why there's another proposal that might hit the 2026 Tennessee ballot: State property tax caps on local bills.

Does Tennessee have property tax caps?

In much of the country, state tax laws prevent local governments from raising property taxes above a mandated limit or "cap."

Tennessee, however, is one of only four states that doesn't institute a local property tax cap. Instead, Volunteer State property tax bills are largely determined by a vote from county or city leaders, which is why advocates are pushing for new 2026 legislation to cap local property tax rates.

For instance, state Sen. Joey Hensley (R-Hohenwald) reportedly plans to sponsor a bill in the 2026 Tennessee legislative session that would cap local property tax increases. Here's what's expected to be included:

• Annual cap: Local property tax increases would be capped at 2% per year for Tennessee cities and counties.
• Voter approval required: If a locality needed the rate to be higher than 2%, a detailed resolution would have to be passed, and voters would need to approve the rate hike.

Yet the proposal doesn't include a specific provision for adults 65 and older, who some officials say are particularly at risk of displacement due to rising property valuations. Recognizing that a 2% cap might not be enough for those on fixed incomes, lawmakers are also weighing a "Golden Homeowners" proposal that would provide tax reimbursements for these "older adults."

Tennessee property tax exemption for 65 and older

Tennessee currently offers two potential property tax relief programs that target homeowners. Here's a quick breakdown of what's available:

• Property Tax Relief program. If you're 65 and older, a disabled person, or a surviving spouse of a veteran, you may be eligible for property tax reimbursement up to $175,000 of your property's assessed value (income limits and restrictions apply).
• Property Tax Freeze program. While not all municipalities participate, localities can choose to lock your property tax amount at the first year you qualify, preventing you from being subject to increases in your property tax bill due to rising property values (though annual income/qualification checks may apply).

In addition to these, a new Tennessee property tax proposal is on the table for 2026 that would fully exempt adults 65 and older from paying local property taxes at all.

Local Rutherford County official, Rob Mitchell, has recently pitched an idea that would provide full reimbursement of property taxes paid by older adults who've had at least 20 years of state residency. The plan, titled "Tennessee Golden Homeowners Tax Relief Program," would aim to prevent adults 65 and older from leaving their homes.

Though the proposal gained attention in January 2026 through media outlets, an official bill has yet to be filed. Stay tuned for more updates.

Read More

• 10 Cheapest Places to Live in Tennessee
• Tennessee Tax Guide
• Are No-Income Tax States Better to Live In?

California policymakers are flirting with an idea that's sparking debate: a proposed one‑time 5% tax targeting billionaires. The so-called "wealth tax" is intended to raise tens of billions for healthcare and other public services in the Golden State.

The proposal, backed by the Service Employees International Union–United Healthcare Workers West (SEIU‑UHW) and Congressman Ro Khanna (D-Calif.), but opposed by California Governor Gavin Newsom, would apply to individual residents with more than $1 billion in wealth as of January 1, 2026.

The measure officially qualified for the ballot on June 17, after the Secretary of State's office verified that a random sample projected well above the necessary 875,000 valid signatures. Barring a last-minute withdrawal before the state's strict June 25 certification deadline, California voters will officially decide the measure's fate this November

If voters approve it, the measure would be retroactive, potentially taxing existing fortunes,

That unusual approach is raising questions and sparking controversy. Here's more of what you need to know.

Related: California Retirement Tax 2026: Is the 'Social Security Shield' Enough?

How the proposed California wealth tax would work

Under the proposed "2026 Billionaire Tax Act" (PDF), any California resident whose net worth exceeds $1 billion calculated as of December 31, 2026, would owe 5% of that net worth, with payment due in 2027.

The proposal reportedly includes a phase-out from $1 billion to $1.1 billion in net worth, meaning individuals slightly above the threshold wouldn't face the full 5% rate immediately.

• Those who can't or don't want to pay in full could spread payments over five years, but remaining balances would incur an additional annual, nondeductible charge.
• The tax base could affect businesses, stocks, bonds, art, collectibles and intellectual property, while excluding real estate, pensions and retirement accounts.

Advocates note that the idea is to focus on types of financial and corporate wealth that have surged in recent years, e.g., in the tech industry.

California's nonpartisan Legislative Analyst's Office (PDF) has estimated that roughly 200 to 250 billionaires could be affected by the measure and that the plan could raise approximately $100 billion in one-time revenue, depending on market conditions and final valuations.

Why the wealth tax is facing political pushback

Not surprisingly, the plan has drawn sharp resistance from some high‑profile lawmakers. A key concern seems to be the potential for driving capital and high-earning residents away.

Newsom has said these kinds of wealth‑tax ideas are "going nowhere in California" and argued the state "can't isolate [itself] from 49 other states."

San Jose's Democratic mayor, Matt Mahan, warned on X that "driving billionaires out of state might feel good in the short run but working people (as is almost always the case) will pick up the tab," for what he described as a "political policy."

• Mahan has pointed out that roughly half of California's personal income tax revenue comes from the top 1% of earners.
• The argument is that if those taxpayers leave, the state could be forced either to raise taxes on the middle class or cut services.

The proposal has also sparked heavy opposition funding and an interesting political coalition determined to defeat it.

Billionaire and Palantir co-founder Peter Thiel is reportedly donating $3 million to the California Business Roundtable to try to stop the measure.

Also in opposition? Major health groups and labor unions, including Planned Parenthood, the California Teachers Association and the California Medical Association.

All have recently come out against the proposed wealth tax, seeing it as a flawed and unsustainable funding model.

Not all California billionaires oppose the proposal

But notably, not all billionaires oppose the measure.

NVIDIA CEO Jensen Huang, whose estimated net worth of $155 billion to $162 billion would subject him to a roughly $8 billion tax bill, said he is "perfectly fine" with the proposal.

"We chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it," Huang recently told Bloomberg Television. "I've got to tell you, I have not even thought about it once."

Huang emphasized that Silicon Valley's talent pool is the primary reason NVIDIA remains in California.

Adding to the chatter, late last year, in response to Thiel's warning of a departure from the state due to such a tax, Khanna posted the following on X (formerly Twitter).

"Peter Thiel is leaving California if we pass a 1% tax on billionaires for five years to pay for healthcare for the working class facing steep Medicaid cuts. I echo what [former President Franklin D. Roosevelt] said with sarcasm about economic royalists when they threatened to leave, "I will miss them very much."

The debate about taxing unrealized gains

Some of what adds to the debate about this proposal is the idea that it could effectively tax unrealized gains — the paper increase in value of assets that haven't been sold.

• Note: Under current federal rules, most capital gains are taxed only when an asset is sold, so the owner has cash to pay the tax.
• Here, if approved, the state would look at what someone is worth on a set date and apply 5% to that amount, whether or not any stock, business stake, or artwork has been converted to cash.

Critics say that could force founders and investors to unload big slices of companies or other illiquid assets to pay the bill. The argument is that it could potentially drag down valuations and affect ordinary shareholders.

Supporters counter that the current system lets billionaires' wealth soar while reporting relatively modest taxable income. A one‑time wealth tax is seen by some as a way to reach gains that otherwise might never be taxed.

Legal and valuation challenges ahead

The wealth tax proposal includes language to amend the California Constitution so the levy fits within existing limits. But legal pundits disagree on whether a one‑time tax on overall net worth would be treated, from a legal standpoint, (i.e., more like a property tax, a capital gains tax, or something else).

That uncertainty means lawsuits are widely expected, even if voters sign off on the measure.

From a practical standpoint, the state would also have to determine the value of highly complex assets on the key valuation date.

• For example, stakes in private companies, venture funds or unique art and intellectual property could be harder to price and easier to dispute.
• California tax authorities would need detailed valuation rules and substantial enforcement resources.
• Wealthy taxpayers would likely challenge aggressive assessments, which some say could slow collections and add cost.

What this wealth tax could mean for California taxpayers

For individual taxpayers, the question is not whether they personally will owe the tax, since this plan is aimed at a small number of residents. The key question is whether a billionaire tax would improve the lives of everyone in the state.

Supporters believe that a one-time large contribution could reduce the burden on other taxes and offset federal funding cuts.

• The funds from this levy would pay for healthcare and related services without increasing income or sales taxes for middle- and lower-income families.
• Essentially, they argue that a small portion of the wealthy's fortunes can help support systems that everyday families depend on.

Opponents are concerned that if many wealthy individuals move away or transfer their assets, the state could lose significant tax revenue.

• This would mean higher taxes for those who stay or cuts to services.
• They also warn that forced asset sales could disrupt the market, affecting anyone with a retirement account linked to those companies.

The bottom line? Unless something changes by late June, California voters will ultimately decide in November whether to tax extreme wealth in the Golden State. Stay tuned.

Read More

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• If You'd Put $1,000 Into NVIDIA Stock 20 Years Ago, Here's What You'd Have Today
• Washington Approves Capital Gains Tax Increase
• New SALT Deduction Could Put Thousands Back in California Homeowners’ Pockets

Georgia’s path to a zero-percent income tax just got a lot clearer. Earlier this week, Gov. Brian Kemp released the proposed 2027 budget for the state, doubling down on an existing plan to accelerate income tax cuts (and issue Georgia surplus tax refunds — more on that later).

The governor's move follows a landmark state Senate proposal to phase out the current 5.09% rate by 2032. That plan, spearheaded by Lt. Gov. Burt Jones and a special Senate committee, offers immediate tax exemptions that could shield two-thirds of Georgians from state income tax as early as next year (if the state hits certain revenue marks).

However, the path ahead isn't straightforward. Between cutting state tax breaks and a growing push to prioritize property tax relief instead, the future of your paycheck remains a hot debate under the Gold Dome.

Here is everything you need to know about Georgia state income taxes in 2026 and beyond.

When would the Georgia state income tax end? The 2026 timeline

As reported by Kiplinger, Georgia Lt. Gov. Jones created a bipartisan state Senate committee to seek ways to end the Georgia state income tax. The move came about a week after Jones announced his campaign for Georgia Governor.

“If we wish to remain the number one state for business and keep our state competitive, we must expand on the progress made over the past four years to eliminate Georgia’s income tax,” Jones stated in a release.

The special committee’s proposal to eliminate the Georgia income tax includes (if certain revenue targets are met):

• Accelerated rate cuts. Dropping personal and corporate income taxes to 4.99% in 2026, followed by a further personal income tax reduction to 3.99% in 2029.
• Targeted elimination. By 2032, the Georgia income tax would be eliminated for individual taxpayers, while keeping the corporate tax rate at the proposed 4.99% reduced rate.
• Higher standard deductions. Not collecting any personal income tax on the first $50,000 for single filers and $100,000 for married filing jointly (current law is a 0% income tax rate on the first $12,000 if single, $24,000 for married filing jointly).

This proposal builds on an existing trend in the Peach State; a flat rate of 5.39% was imposed for all taxpayers last tax season, and the rate is already set to further decrease to 4.99% by 2027.

But the new plan could reportedly exempt two-thirds of working Georgians from state income tax starting next year. That tax relief would result in $3 billion in foregone state revenue during the first year alone, leading to a potential $16 billion annual gap in the state budget, per the Georgia Budget and Policy Institute (GBPI).

Budget watchdogs, including the GBPI, warn that without income tax, Georgia might be forced to triple the state sales tax or implement drastic cuts to essential public services to balance the books.

Who benefits from the Georgia 2026 'zero-tax' threshold

State Sen. Blake Tillery (R-Vidalia), chair of the special committee, framed the plan in a press conference as a relief measure for the middle class. "Let’s give breaks to families who are feeling the crunch the most first."

However, some argue the long-term math tells a different story. State Sen. Nan Orrock (D-Atlanta) labeled the proposal a "massive handout" to the wealthy, warning that it worsens the state's affordability crisis.

"[They’re] saying they’re doing you a favor," Orrock noted in a press release, "[But] almost every Georgian would see their tax bill increase by a month’s worth of groceries."

Recent reports suggest that while higher standard deductions can help some low-income families, the total elimination of the income tax would see 74% of the benefits flow to households earning six figures or more.

Meanwhile, to bridge the immediate $3 billion revenue gap, the committee proposed a funding strategy for the first couple of years:

• State surplus and bonds. In the first year, Georgia plans to use about $2 billion from its budget surplus. The state will cover the remaining $1 billion by switching back to a traditional bond program for capital projects instead of using cash.
• Chopping Georgia tax breaks. In the second year, the plan aims to eliminate or reduce roughly 10% of existing tax credits and incentives — a move that targets about $3 billion in tax breaks.
• Incentives at risk. Programs like the PEACH education credit, rural hospital tax credits, and vehicle trade-in exemptions are all potential targets for reduction or repeal.

Further funding for the income tax elimination plan would come through spending reforms, capping emergency funds, and potential closures of underperforming state boards and commissions.

Critics, including the GBPI, point out that while the state Senate plan lists certain categories, it does not provide specific recommendations. They have raised concerns about which public services or additional tax areas, like sales tax, may be affected if these triggers do not fully cover the $16 billion annual budget gap.

Is the property tax in Georgia at an end? The 2026 relief proposal

Beyond questions of affordability, a new rift has opened within the state GOP over how exactly to deliver relief to Georgians.

Historically, Georgia House Republicans have favored gradual income tax cuts. However, House Speaker Jon Burns (R-Newington) has pivoted toward a different priority: Reducing taxes paid on rising home valuations. The pitch, which was only given last week, is to phase out property taxes for Georgia homeowners.

But focus hasn't shifted away from eliminating the state's income tax. Jones has made the repeal a cornerstone of his 2026 gubernatorial campaign, ensuring the issue stays at the forefront of the legislative session. Kemp, now in his final year in office, declined to comment on the specific proposal.

Georgia tax rebate in 2026?

Kemp unveiled his proposed 2027 budget in mid-January, which includes over $1 billion in Georgia surplus tax refunds in 2026.

If passed into law, this would be the fourth round of refunds over Kemp's tenure as governor. The amounts and eligibility requirements are expected to be the same as last year's Georgia tax rebates program.

• $250 for single and married filing separate filers.
• $375 for heads of household.
• $500 for married filing joint filers.

Additionally, Kemp signaled that he intends to use the state's massive surplus to accelerate the income tax cut to 4.99%, which partially aligns with the state Senate committee's proposal to end the Georgia state income tax.

However, the 2027 proposed budget makes no mention of cutting tax benefits outlined in the state Senate committee plan. Instead, Kemp proposed additional payouts to teachers and state employees amounting to $2,000 per individual.

"Even with the rebate and tax cuts that my office will propose this legislative session," Kemp remarked during his final State of the State address, "Our state's rainy day fund and strategic reserves will stand at over $10 billion."

The proposed 2027 budget needs approval by the state legislature before becoming law.

Stay tuned for more updates.

Read More

• Is a No-Income Tax State Better to Live in?
• Georgia Tax Guide
• Why Abolishing Property Taxes is Problematic

Federal tax policy often dominates headlines, especially since President Donald Trump and the GOP enacted a sweeping tax overhaul last year. But many people don't realize that state tax laws tend to have a more immediate impact on household budgets.

For 2026, dozens of states enacted changes to income taxes, sales taxes, property taxes, and senior and Veteran tax relief programs. These may impact everything from take-home pay and retirement income to property taxes and the cost of everyday purchases.

Here are some significant state tax changes this year and what they may mean for you as a resident and taxpayer.

State Income Tax

States cutting income taxes for 2026

Several states reduced individual income tax rates or simplified their tax structures for 2026. The moves are part of a recent trend toward lower and flatter income taxes.

Because state income taxes are often the largest tax burden for many households, these changes can materially affect take-home pay.

Here are some notable state income tax changes effective this year:

• Georgia reduced its flat income tax rate to 4.99% (down from 5.09%), continuing a legislated phase-down enacted in prior years.
• Indiana lowered its flat income tax rate from 3.0% to 2.95%, with another reduction scheduled for 2027.
• Iowa completed its transition to a flat 3.9% income tax, replacing its graduated income tax.
• Kentucky reduced its flat individual income tax rate from 4.0% to 3.5%, part of a long-term statutory plan tied to revenue benchmarks.
• Mississippi reduced its flat income tax rate to 4.0%, completing a multi-year reduction.
• Montana and Mississippi lowered their top marginal income tax rates, and North Carolina's flat income tax rate fell again, to a level significantly lower than earlier in the decade.
• Ohio implemented a flat 2.75% income tax on most non-business income exceeding a specific threshold, while exempting income below that level.
• Oklahoma reduced its top marginal rate and consolidated its income tax brackets, and South Carolina reduced its top marginal income tax rate for 2026.

Key State Income Tax Changes for 2026

Sales Taxes

2026 gas tax, grocery tax and sales tax changes

In 2026, several states changed sales and grocery taxes that will impact household budgets.

Illinois and Arkansas are eliminating their state-level grocery taxes: 1 % in Illinois and 0.125 % in Arkansas. So, families will no longer pay state sales tax on most food purchases.

Note: Local governments can and often do continue to tax groceries, meaning many households will still face grocery taxes, depending on where they live. But these state-level grocery tax changes can provide some relief for those who spend a large share of their income on essentials.

In March, Georgia's Gov. Brian Kemp approved a 3-month gas tax suspension due to soaring prices at the pump. The measure will reduce prices by roughly 33 cents per gallon of gasoline and about 37 cents per gallon of diesel, once fuel distributors adjust prices.

(As Kipliner has reported, President Trump and some lawmakers on Capitol Hill have floated the idea of temporarily suspending the federal gas tax.)

At the same time, Maine is expanding its 5.5% sales tax to cover digital goods and services, including streaming subscriptions, online media, and some digital software. A Deloitte Media Trends report finds that an average U.S. household subscribes to four streaming services. With that in mind, some estimates put the average additional monthly cost to a Maine household at nearly $3.60.

These changes illustrate a broader trend. States are refining sales tax rules to reduce the burden on necessities while capturing revenue from growing sectors, like digital commerce.

Speaking of commerce, a new "green fee" In Hawaii became effective as of January 1, 2026. The fee is designed to help protect Hawai'i's natural ecosystem from the impacts of climate change.

The first-of-its-kind levy will raise the state’s transient accommodations tax (TAT) for nightly lodging. Initially, the Hawaii green fee was supposed to apply to hotel stays, cruise ship cabins, and short-term rentals. But a federal court has blocked the portion applicable to cruise ships in an ongoing legal battle.

And speaking of first-of-its-kind moves, Maryland, as Kiplinger has reported, recently enacted a surveillance pricing law limiting how retailers can use personal data to set individualized prices in grocery stores.

In a press release announcing the Protection from Predatory Pricing Act, Gov. Wes Moore stated, "At a time when Marylanders are already stretched by the rising cost of groceries, housing, and everyday necessities, we must ensure that new technologies are not used to drive up the bill for working families."

Retirement Income

Taxes on Social Security and retirement income in 2026

In 2026, several states continued easing the tax burden on retirees.

For example, Arizona changed how Veteran income affects property and income tax exemptions. Under a new law, the state is excluding most veteran-related income sources from eligibility calculations.

Michigan continued implementation of exemptions for retirement income, reducing or eliminating state income taxes on many pensions and withdrawals from retirement accounts. The exact impact depends on a retiree’s age and birth year, but for many, the changes mean more money in their pockets.

West Virginia completed its multi-year phase-out of state income taxes on Social Security benefits, fully exempting them starting in 2026.

While some states still tax certain retirement income, many offer age- or income-based exemptions. Retirees should review their state-specific retirement tax rules to understand how the 2026 changes affect their personal finances and tax burdens.

Winnings and Losses

Gambling and sports betting taxes in 2026

As legalized sports betting and online gaming continue to grow, some states and the federal government are refining how these activities are taxed.

Higher taxes can make betting more expensive for consumers, but they also generate significant revenue for public services like education, infrastructure, and health programs.

For instance, New Jersey implemented higher, more uniform tax rates on online casino games and sports betting revenue as part of reforms enacted in 2025. The changes take effect for the 2026 tax year (returns typically filed in 2027).

Iowa has also changed how some gambling winnings are taxed for individuals.

• Beginning January 1, 2026, Iowa requires state income tax withholding on sports betting winnings whenever federal withholding is required, formally classifying those winnings as Iowa-source income.
• This affects when tax is collected, not how much is ultimately owed.
• The rate is a flat 3.8%.

It's worth noting that federal tax changes effective in 2026 will also affect gambling income. Under the 2025 Trump/GOP tax bill, new limits on the deductibility of gambling losses, effective for 2026, may increase taxable income for frequent bettors, even when winnings and losses roughly offset.

Because many states base their income tax systems on federal definitions and calculations, federal changes can be reflected in state tax bills unless a state explicitly decouples from federal law.

But stay tuned: As Kiplinger has reported, Trump is reportedly eyeing a reversal on the gambling loss limits set in his tax bill.

Homeowners

Property tax changes for 2026

Property taxes fund essential local services like schools, police, fire departments, and roads. But for homeowners, even small changes in rates or assessments can impact monthly budgets, home affordability, and long-term financial planning.

High property taxes can influence where people choose to live, while lower taxes can free up money for savings or spending, but may also reduce the quality and availability of some key local services.

Note: Some of the provisions mentioned phase in after 2026, and some estimated tax relief estimates cover multiple fiscal years, not just the 2026 bills.

Indiana is rolling out a major property tax overhaul designed to protect homeowners from rapid increases tied to rising property values. The new law, which takes effect this year, is expected to provide roughly $1.3 billion in relief over three years.

• Ohio passed a comprehensive reform affecting 2026 property tax bills, including caps on unvoted tax growth, fixes to assessment rules, and refunds for excess payments.
• Montana is implementing a new property tax rate structure for 2026 that lowers rates for primary residences and long-term rentals while adjusting how different property types are taxed.
• Pennsylvania expanded its Property Tax/Rent Rebate program for older adults and people with disabilities, increasing eligibility thresholds and benefit amounts.

Meanwhile, Mississippi increased its homestead exemption for eligible older adults so that qualified homeowners 65+ can exempt up to $12,500 of assessed home value from all ad valorem (property) taxes (up from $7,500 under prior law) beginning with the 2026 tax year.

In any state, homeowners should review assessment notices carefully and apply for any available exemptions or property tax appeals where eligible.

But these 2026 changes demonstrate how some states are trying to balance revenue needs with homeowner relief.

Trump Tax Bill

States 'decoupling' from the 2025 Trump tax law

When Congress changes federal tax law, states must decide whether to adopt those changes for state tax purposes — a process known as conformity.

When states decide not to conform (i.e., to decouple from federal rules), they don't automatically follow new federal provisions, like those in the 2025 Trump tax megabill. So, the decision on whether to decouple can change how much people or businesses owe in state taxes, even if their federal tax bill is lower. Decoupling can also affect budgets, planning, and the broader state economy.

The 2025 Trump tax law introduced several major federal provisions, including:

• New exclusions or deductions related to taxes on tips and overtime pay
• Expanded bonus depreciation and favorable treatment of domestic research and experimental expenses
• Other business-focused provisions are designed to accelerate deductions and reduce federal taxable income

If states automatically conformed to all of these changes, many would face significant revenue losses.

As a result, several states and the District of Columbia have decoupled from selected provisions to protect their tax bases. Several other states are reportedly considering decoupling from various provisions in the law Trump often calls the "big, beautiful bill."

For your state tax return, decoupling means:

• A deduction or exclusion allowed on the federal return might not be allowed on the state return
• You may need to add back certain federal deductions when calculating state taxable income

California, New York, Illinois, Maine, and the District of Columbia are some states that have rejected federal worker deductions for tips and overtime pay. In these states, your federal taxable income will be lower, but you'll likely have to "add back" those earnings on your state return and pay state tax on them.

• Colorado has taken a hybrid approach: The state allows the federal "No Tax on Tips" deduction to help service workers, but has decoupled from the "No Tax on Overtime" deduction to protect its state budget.
• Meanwhile, Michigan, Pennsylvania, Delaware, and Virginia have decoupled from the bill's "immediate expensing" rules.
• While the federal government now lets businesses deduct 100% of R&D and equipment costs instantly, these states require businesses to spread those deductions out over several years (amortization).

This is not an all-inclusive listing of state tax changes for 2026. Consult your state Department of Revenue or a qualified tax professional to understand how any tax changes apply to your specific situation.

Read More

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It’s becoming less common for states to tax Social Security benefits, but eight states still do.

However, the tax treatment of Social Security retirement income can vary drastically from state to state. That’s mainly because many of these states won’t tax your Social Security if you meet specific income guidelines, and some states have more generous guidelines than others.

So, here’s how all eight states tax Social Security retirement income.

Colorado

Colorado Social Security benefits tax

Colorado taxes Social Security benefits, but some retirees won't have to pay. That’s because Colorado allows taxpayers 65 and older to deduct all their federally taxed Social Security. (Younger retirees, those under age 65, get a smaller tax break in Colorado.) The Centennial State currently taxes all taxable income at a flat 4.4% rate.

Retirees aged 55 to 64 can deduct up to:

• $95,000 (married filing jointly) or $75,000 (single filer) of Social Security benefits from their taxable income for tax year 2026.
• For taxpayers who exceed the above thresholds, the deduction is $20,000.

See also: 10 Cheapest Places to Live in Colorado

Connecticut

Connecticut Social Security benefits tax

While Connecticut technically still taxes Social Security benefits, many residents won’t pay these state taxes in retirement. Whether you pay state income tax on Social Security in the Constitution State depends on your adjusted gross income (AGI) and your filing status.

• For married filing separately and single filers, Social Security benefits are not taxed in Connecticut if adjusted gross income (AGI) is under $75,000.
• For married filing jointly and head of household filers, Social Security benefits are not taxed with AGI below $100,000.
• If a taxpayer’s AGI is more than the Connecticut income threshold, no more than 25% of Social Security benefits are taxed.

Minnesota

Minnesota Social Security benefits tax

Minnesota taxes Social Security income that is considered taxable by the federal government. However, some Minnesota retirees qualify for a Social Security income subtraction when filing their state tax return. A taxpayer's subtraction is reduced by 10% for each $4,000 over the threshold (10% for each $2,000 of AGI over $54,160 for married filing separately).

Here are the threshold amounts subject to no social security tax, according to the Minnesota Department of Revenue:

• Married filing jointly filers are fully tax-exempt at less than $108,320.
• If you are married and filing separately, you are fully tax-exempt at $54,160 or less.
• Head of household and single filers are tax-exempt at less than $84,490.

(Note: Minnesota also has an "alternative method" for claiming a state subtraction. This method is based on your filing status and provisional income, which is your gross income plus tax-exempt interest and half of Social Security and Tier 1 Railroad Retirement benefits.)

Montana

Montana Social Security benefits tax

Montana’s income tax rate is 5.65% on income over $95,000 ($47,500 for single filers). That’s not great news for some retirees since the treatment of Social Security retirement income isn't as generous in Montana for 2026 as it is in most states.

• Taxpayers 65 and over only receive a $5,500 subtraction from federal taxable income.
• Several income deductions, including the partial interest income deduction for taxpayers aged 65 or older, were repealed in recent years.

New Mexico

New Mexico Social Security benefits tax

New Mexico technically taxes Social Security benefits, but many retirees won’t pay a dime to the state at tax time. That’s because the Land of Enchantment provides higher income thresholds for exempting Social Security benefits than other states.

• Single filers earning up to $100,000 per year won’t have their Social Security benefits taxed at the state level.
• New Mexico won’t tax Social Security benefits for joint filers who earn up to $150,000 per year.

Rhode Island

Rhode Island Social Security benefits tax

Rhode Island exempts Social Security benefits from state income tax for many retirees. Retirees who have reached full retirement age and meet income requirements aren't subject to state tax on Social Security benefits. Here are the most recent income thresholds:

• For joint filers, only those with an AGI of $133,750 or more are subject to state tax on Social Security benefits.
• For most other filing statuses, only retirees with a federal AGI of $107,000 or more pay state taxes on Social Security benefits.

Utah

Utah Social Security benefits tax

Utah taxes Social Security benefits, but some retirees may qualify for a Social Security benefits credit. There is a Social Security Credit Worksheet on the state’s website you can use to determine the amount of the credit you qualify for.

• Utah also offers a retirement tax credit of $450, but taxpayers can’t take this credit if they claim the Social Security benefits credit or the Military Retirement credit.
• Utah taxes all taxable income at a flat 4.50% tax rate.

Vermont

Vermont Social Security benefits tax

Not all retirees in Vermont pay state income tax on Social Security benefits. That’s because Vermont allows a full exemption of Social Security income from state taxation for retirees who meet income requirements. Here are the income thresholds for 2026:

• If you are married and filing jointly, your Social Security benefits are tax-exempt in Vermont if your AGI is $70,000 or less.
• Single and married filing separately filers qualify for a full exemption with an AGI of $55,000 or less.
• Single filers qualify for a partial exemption with an AGI up to $64,999 ($79,999 for joint filers).

Read More

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As we get into the full swing of winter, many folks are hitting the slopes, and Washington has stunning mountains and numerous resorts to do just that.

Some might be thinking about making the Evergreen State their permanent home. If that's you, you could be wondering about the financial side of living there — specifically, yearly property taxes and tax advantages.

Not only do residents enjoy no state income taxes (except for a controversial Washington capital gains tax for some high earners), but property tax bills could be lower than where you currently live. With cultural hotspots such as Seattle and Spokane, the birthplace of Starbucks might be the perfect fit for you.

Here are the top 10 cheapest places to live in Washington state.

Cheapest places to live in Washington

After ranking property tax bills from highest to lowest per county in Washington, one thing is almost a guarantee: Rural areas are the cheapest. You can generally find more affordable living in the countryside than in the hustle and bustle of metropolitan cities.

But if you’re game for enjoying mountains, beaches and historic sites (and maybe want to commute for fancy lattes), check out these cheap places to live in Washington.

Note: Kiplinger used 2025 data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties to live in Washington.

Pacific County

Median property tax bill: $2,250

Median home price: $274,000

Among the counties on our cheapest places list, Pacific County has the highest median property tax bill at $2,250. However, the median home price is fairly affordable compared with other counties listed, at just $274,000, according to the Tax Foundation.

Pacific County is famously known for its stunning coastline and abundant wildlife, especially in the pristine Willapa Bay (renowned for its oysters and salmon). The county offers a coastal lifestyle, where seafood lovers can enjoy long walks on the Long Beach Peninsula, view historic lighthouses, and spend afternoons clam-digging in charming seaside towns.

If you’re interested in fresh shellfish and abundant biodiversity, Pacific might be your next favorite spot.

Columbia County

Median property tax bill: $2,215

Median home price: $256,100

Columbia home prices are relatively low, at $256,100. Median property taxes can also be affordable compared to the rest of the state, at around $2,215, according to the latest data from the U.S. Census Bureau.

Columbia is the second-least populous county in Washington, but don’t let its uncrowded vibe scare you away. Stunning Blue Mountain scenery provides a quaint backdrop to hiking, skiing and camping in this historic county. Residents also enjoy prime wildlife viewing in the county’s state park and refuge areas.

Your new move might be Columbia if you love wildlife and want to skip the busy slopes elsewhere.

Okanogan County

Median property tax bill: $2,194

Median home price: $284,200

Okanogan County borders the Columbia River in the south and Canada in the north, making it the largest county in Washington state. Home prices sit comfortably at $284,200, with median property tax bills just under $2,200, according to Tax Foundation data for 2025.

Have you ever wanted to go ice fishing or walk on a frozen lake? You can during an Okanogan County winter. Residents also snowboard and ski at the county’s Loup Loup Ski Bowl.

When the weather gets warmer, Okanogan is popular for its scenic pathways through the Okanogan-Wenatchee National Forest. The surrounding area boasts almost 3,000 miles of trails that bikers and hikers can use to view alpine vistas and the Okanogan River.

For year-round fun, check out Okanogan County — it might be the perfect place for your family, and your budget.

Adams County

Median property tax bill: $2,104

Median home price: $251,300

Named after John Adams, the second president of the United States, Adams County sports low home prices, with the median just above $250,000. The median property tax bill is similarly “cheap” for Washington state, barely above $2,100, according to the U.S. Census Bureau.

Adams County offers something for the whole family. During the summer, visit Ritzville Water Park, with slides, heated pools and splash pads for the kids.

Once the weather cools, families may enjoy Columbia Plateau Trail State Park (a former railway line that's great for cross-country skiing) and other recreational and park areas. Burrough House and the local museum offer a unique perspective into the area's history.

Come to Adams for the low property tax bill, and stay for the local charm and family fun.

Wahkiakum County

Median property tax bill: $2,084

Median home price: $344,500

Wahkiakum has the most expensive median home price on our list, at $344,500. However, depending on where you’re from, that might not be too bad — especially since the median property tax bill is barely above $2,000, per the Tax Foundation.

Wahkiakum County’s home prices might be slightly higher due to its direct coastal and river access to the famed Columbia River. This location offers unique historical benefits: Residents can walk or bike parts of the Lewis & Clark Expedition trail, camp along the unspoiled riverfront or satisfy a history buff’s heart by exploring the numerous historic pioneer settlements.

If history’s your thing and you want a piece of untapped natural beauty, Wahkiakum County could be your next move.

Pend Oreille County

Median property tax bill: $2,048

Median home price: $307,800

Located in the northeast corner alongside Idaho and Canada, Pend Oreille County has a relatively low median property tax bill just below $2,050. Yet home prices are generally higher than in other places on this list, with the median at $307,800, per the latest 2025 data.

Pend Oreille has a rich mining industry, reflected in its frontier-feeling vibes and activities to do.

For instance, attractions such as Gardner Cave bring in thousands of tourists per year, with Metaline Falls — a historic mining town — near the river and dam area in the county. While Pend Oreille has significantly less mining in recent years, residents still enjoy outdoor trails, camping, and fishing in the Selkirk Mountains.

Whether you’ve come for the low property taxes or the scenic outdoor scapes, Pend Oreille can be safely described as “anything but boring.”

Stevens County

Median property tax bill: $2,016

Median home price: $308,000

Two hours north of Spokane is Stevens County. The median property tax bill in the county is $2,016, and home prices are just above $300,000, per the latest information from the U.S. Census Bureau.

Largely covered by the Colville National Forest, Stevens County is known for natural beauty that is sure to enthuse outdoor adventurers. Hunting, hiking, fishing, and exploring are all part of the Stevens County experience, plus the area hosts an annual county fair and a rodeo in the summer.

If you’re looking for a classic northeastern Washington experience, that’s not too far from a large metropolitan area, give Stevens County a shot — the experience might surprise you.

Ferry County

Median property tax bill: $1,792

Median home price: $274,500

Ferry home prices are relatively low compared with other places in Washington, at just around $274,500. Median property tax bills are also considered cheap at under $1,800 per year, according to the Tax Foundation. The property tax bill is also cheaper than in most surrounding Washington counties.

Lake enthusiasts might fall in love with Ferry. Its centerpiece, Curlew Lake, offers year-round recreation, including swimming, waterskiing, kayaking and excellent fishing (trout, bass, and even tiger muskies).

Camping at Curlew Lake State Park adds features such as mountain viewing and birdwatching. Even more unique, Ferry residents can go fossil hunting at a public dig site and take home plant and insect fossils that are almost 50 million years old.

If you’ve always had paleontology dreams as a kid or want to live out your boating dreams on the lake, you might come to Ferry County to realize your purpose and save a buck or two on property taxes.

Lincoln County

Median property tax bill: $1,621

Median home price: $272,300

Homes can be pretty affordable in Lincoln, with a median price of around $272,300, per 2025 U.S. Census Bureau data.

Median property taxes are also quite cheap for Washington state, with a median bill of $1,621.

Known as an agricultural hub, Lincoln has rolling, amber fields of grain, access to Lake Roosevelt and stunning geological formations. The area’s most famous natural attraction is the Scablands, which technically range across several counties. These unique “scarred” landscapes were made by huge floods carved by Ice Age glaciers, and the area is also home to Dry Falls, which at one point was one of the world’s largest waterfalls.

Lincoln County residents can hike, fish, and boat, take in scenic vistas and enjoy the great outdoors in a low-density population area. Come to Lincoln for the attractions, and stay for the great outdoors and natural historic draws.

Garfield County

Median property tax bill: $1,306

Median home price: $214,200

Garfield County is the cheapest place to live in Washington state, according to the Tax Foundation, with a median property tax bill of $1,306 and home prices around $214,200 for 2025.

In addition to being low-cost, Garfield is also very rural, standing as Washington’s least populous county according to the latest census.

However, don't let the solitude mislead you. The area’s year-round recreational activities at the Umatilla National Forest, combined with the scenic Snake River, offer a vast playground for ATV riding, hunting, camping and water sports.

Residents can also enjoy local culture with events put on by the Blue Mountain Artisan Guild. The county is also famous for its wild harvests: You can go mushroom or huckleberry picking (though always check local regulations and permit requirements before gathering forest products).

Looking for plenty of space, arts, and culture? The cheapest place in Washington state might be your next move.

More Cheap Places

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Property taxes. All homeowners pay them, but no one enjoys writing the check. That annoyance might change soon, however. Retirees in seven lucky states could see new property tax relief take effect in 2026, offering a very real chance of significantly lowering their annual tax bill.

To find these opportunities, Kiplinger searched for recently proposed or new property tax relief taking effect next year, focusing exclusively on states with significant legislation that included homeowners aged 55 and older.

Here are the seven states offering new or proposed property tax relief for retirement-aged adults in 2026.

Florida retirement property tax relief

Discussions are currently underway in the Sunshine State regarding property taxes, which could result in increased property tax relief for Florida retirees in 2026.

The most recent proposal allows homeowners to exempt $200,000 of their insured property's taxable value from non-school property taxes. This is a big deal, as local budgets across the state heavily rely on property tax revenue. Though recently passed by a Florida House committee, the plan remains just one element in the broader discussion surrounding property tax relief in the state.

Gov. Ron DeSantis has repeatedly called for the elimination of the property tax in Florida. Critics point out that property tax and sales tax make up the majority of the Sunshine State's revenue, since Florida is a no-income tax state.

Yet if any of these property tax proposals successfully pass the Florida legislature, residents will then be able to vote on the measure(s), which could secure thousands of dollars in property tax savings for retirees and other homeowners in the new year.

In the meantime, here are the current ways retiree Florida property tax bills might see some relief:

• The Florida homestead exemption. This tax break provides up to $50,722 off property taxes based on a home's assessed value (the amount is adjusted annually for inflation).
• The "save our homes" (SOH) assessment. This limitation prevents property taxes from rising higher than 3% annually (or the percentage change in the Consumer Price Index (CPI), whichever is lower).
• The "low-income senior exemption." Localities can offer an additional exemption for homeowners aged 65 and older, worth up to $50,000 (provided that income is $37,694 or less, adjusted annually for inflation).
• The "long-term resident senior exemption." This tax break applies to 65 and older adults who have resided in their homes for 25 years or more. The exemption from non-school taxes is worth up to $250,000 on the property's value (income limits apply), and localities can choose whether or not to opt in.

There are also various property tax exemptions for veterans, surviving spouses, and individuals with disabilities in the Sunshine State. For full details on all property tax breaks that may apply to you, consult the official website of the Florida Department of Revenue.

Montana retirement property tax relief

All Montana property tax owners could see new relief in 2026 — not just retirees.

Thanks to a couple of bills signed earlier this year, the new Montana "homestead" tax system will provide lower property tax rates for principal residences and long-term rentals. The average projected property tax bills for 2026 are expected to be 18% lower than 2024 bills, according to the Montana Department of Revenue.

But there is one drawback: Rates on properties that don't qualify will increase.

Here's more information about this new property tax relief for Montana homeowners in 2026:

• Most residents with a single-family home, townhome, condominium, or other qualifying property in Montana will be subject to a tiered rate system, ranging from 0.76% to 1.10% in 2026 (compared to a flat 1.35% tax rate for most residences before).
• Taxpayers who submit a homestead application to the Montana Department of Revenue website between December 1, 2025, and March 1, 2026, can qualify for this new system.
• Homeowners who qualified for the state's 2025 homestead flat rate are typically automatically enrolled in next year's tier system, but you can use the state's homestead enrollment tool to verify your tax status.
• All non-qualifying residences for the new homestead exemption (mainly short-term rentals and vacation homes) will be taxed at a flat rate of 1.9%.

Montana also offers a refundable state income tax credit for homeowners aged 62 or older with a median income under $45,000. In 2026, this credit can be worth up to $1,150. Because the credit is refundable, older adults may receive a payment even if they don't owe any state income tax. See the state's Department of Revenue website for other qualifying property tax relief programs.

New Jersey retirement property tax relief

New Jersey is one of the most expensive states for homeowners to live in, but that could change for retirement-aged adults through increased property tax relief in 2026.

The Garden State's new "older adult" property tax relief program, Stay NJ, makes its first payout early next year:

• Homeowners 65 and older who own a home for at least 12 months in a tax year could qualify.
• Household income must be $500,000 or less to qualify.
• Tax savings from Stay NJ may be up to $6,500, depending on how much you pay on your property tax bill.

Retirees in New Jersey will also continue to save on property tax bills with various other New Jersey property tax relief programs in 2026.

For instance, the state's ANCHOR program typically issues rebates in the fall of each year, worth up to $1,750, and the "Senior Freeze" program provides 65 and older adults the opportunity to "freeze" property taxes at a certain "base year" amount.

For more information, check out Kiplinger's report, What's Going on With New Jersey Property Tax Programs?

New York retirement property tax relief

New York residents may have property tax relief in the new year. Thanks to a bill recently signed by Gov. Kathy Hochul, homeowners 65 and older could qualify for a higher homestead exemption in 2026.

The higher amount extends the state's "Senior Citizen Homeowners' Exemption" (SCHE) by reducing a property's assessed value up to a 50% limit (depending on the annual income of the owners in the house, which varies locally). The property must be the homeowner's principal residence.

The new state law signed by Hochul will raise the SCHE limit to 65%, providing an average of $300 of property tax relief to retirees and others aged 65 and older, according to Hochul's office. However, it's important to note that it will be up to local jurisdictions to decide whether to raise their exemption rates.

The homeowners' exemption is just one way New York retirees can qualify for property tax relief in the Empire State. Other ways include:

• The New York STAR program, which may provide up to $5,015 in property tax relief, depending on where you live.
• The veterans exemption, which may reduce a veteran's taxable value on a primary residence by as much as $40,000 (though local maximums can increase this amount to $150,000).

See the New York State Department of Taxation and Finance website for more information on these property tax relief programs and how they might pertain to your home.

Ohio retirement property tax relief

Ohio just passed major property tax relief reform last month, impacting homeowners — and consequently retirees — in the Buckeye State. Starting in 2026, there will be $2 billion in property tax savings over three years, according to the Ohio Senate office.

New property tax relief for Ohio homeowners in 2026 includes:

• The owner-occupancy credit. Homeowners can currently claim 12.5% credit on property taxes for primary residences in 2025. By tax year 2029, that percentage will jump to 15.38%.
• Unvoted property tax hikes will be capped. This means rates in the Buckeye State will not increase significantly without voter approval in future years.
• School district tax hikes will also be limited. This provision prevents sudden property tax hikes when property values rise.

Once signed by Gov. Mike Dewine, these property tax relief provisions will work in tandem with continuing property tax relief in the state.

For instance, Ohio residents 65 and older can already reduce the taxable value of their homes if they qualify for the state's homestead exemption (up to $29,000 for taxpayers with $40,000 in income or less).

Disabled veterans may also be eligible for an enhanced exemption on property taxes (up to $58,000 and no income limit) for 100% service-related disabilities. See the Ohio Department of Taxation website for more information on state-related property tax relief for retirees.

Texas retirement property tax relief

Texas voters just received more property tax relief, but retirees in the Lone Star State could get more in 2026. That's because elections for statewide executive positions are kicking off, and with it, a property tax debate.

Current Texas Gov. Greg Abbott has published a "five-point property tax relief plan," as part of his campaign for reelection, whereby:

• School district property taxes would be eliminated.
• Property tax appraisal increases would be capped at 3%.
• A two-thirds voter approval would be required for hiking local property taxes.
• Voters could initiate rollbacks of property tax rate increases.
• State funding of public schools to replace lost school district property taxes.

However, Lt. Gov. Dan Patrick, who is also seeking re-election, has criticized the five-point plan, arguing it would inflate the state's 6.25% sales tax rate.

Patrick instead advocates for increasing the homestead exemption to $180,000. He also proposes lowering the eligibility age for the Texas homestead exemption for "older adults" from 65 to 55 years old.

The election for executive offices will come to a head on November 3, 2026, and maybe then, Texas homeowners will gain some clarity on additional property tax relief moving forward. In the meantime, here are a couple of ways for Texas retirees to save on property taxes:

• Texas homestead exemption, worth up to $140,000 for qualifying residents on their primary residences.
• Exemption for homeowners 65 and older (or disabled), worth up to $60,000 in addition to the standard Texas homestead exemption.

For more information on these and other property tax relief savings in Texas, check out Kiplinger's report, Texas Property Tax Cut Could Bring $930 in Savings on Bills.

Wyoming retirement property taxes

Wyoming homeowners may save on property tax bills next year with a new initiative appearing on the November 2026 ballot.

Earlier this year, Wyoming Secretary of State Chuck Gray certified the initiative after the state received over 30,000 valid signatures. The citizen-led proposal, titled "Limit Property Tax in Wyoming Through a Homeowner's Property Exemption," would cut residential property taxes by 50% for Wyoming homeowners who've lived in the state for at least 12 months.

Other proposals may join the homestead exemption initiative on the November 2026 ballot, but in the meantime, here are ways Wyoming retirees can save on property taxes in the Cowboy State.

• Homestead exemption of 25%. This tax benefit used to be automatic, but now requires an annual online application. To qualify, homeowners must have a property worth up to $1 million in fair market value and must have owned and lived in the home for at least 8 months of the year.
• Long-term homeowner exemption. Homeowners at least 65 and older with 25 years of property tax payments may qualify for a 50% reduced assessed value, but this provision is temporary and will expire in 2027.
• Property tax refund program. For incomes up to 145% of a county or state median, whichever is larger, homeowners may receive a refund on property taxes paid.

Stay tuned for more updates.

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Wherever you live, how large a tax increase would you tolerate before you would consider leaving for another state?

That is the question currently facing New York’s wealthiest residents as state and city budget negotiations hit a fever pitch this April.

Starting this year, the state’s top 5% of income earners are already navigating a temporary personal income tax on top of the state’s general income tax. It’s hefty, too — the tax is 10.9% for incomes above $25 million. The measure will sunset in 2032.

For some wealthy New York residents, that might be enough to make them pack their bags.

There’s another wrinkle that has dominated the first 100 days of 2026. On January 1, Mayor Zohran Mamdani swept into New York City’s highest office on the back of his proposal to hike the city’s top tax rate from 3.9% to 5.9%.

If approved under Mamdani's plan, combined with the state rates, the income of New York City’s wealthiest would be subject to a tax of almost 17%, the highest in the country.

Lawmakers are now weighing Mamdani’s plans for the millionaire’s tax revenue. He has maintained that the tax would underwrite free city bus transportation, provide free childcare for residents with children ages six weeks to 5 years old, freeze rents on rent-stabilized apartments, and create city-owned grocery stores.

As the April budget deadline arrives, New York City’s wealthiest continue to push back, keeping a vital question at the forefront of the debate: Will New York's elite stay and help pay for these programs through their tax dollars, or will they vote with their feet and move their millions out of the state?

New York tax increase: Voting with their feet?

Wealthy New Yorkers have spent the early months of 2026 vocalizing their opposition to Mamdani’s proposed "millionaire’s tax" and what would happen if his initiative were successful.

For example, billionaire John Catsimatidis, owner of a Manhattan-based grocery store chain, told The Free Press that he’d "consider closing our supermarkets and selling the business."

Neil Blumenthal, co-founder and co-CEO of eyewear company Warby Parker, told reporters, "I will never move from New York, but there’s a lot of other people that will and are leaving New York."

Andrew Cuomo, New York’s former governor and Mamdani’s political rival, joked before the election that if Mamdani’s proposal became law, "even I will move to Florida."

But an exodus isn’t inconceivable. The top 1% of New York City’s taxpayers reportedly pay more than 40% of the city’s income taxes.

To put things in perspective, it helps to look at another high-tax state: California.

Is the New York tax climate different from California?

a

• The loss reflects the ongoing trend of state revenue losses since Proposition 55 was approved ten years ago.
• Since then, California has experienced a net loss of $16.1 billion in adjusted gross income (AGI), according to IRS migration data.

Raising steep taxes on the wealthiest state residents might cause some to flee. But many studies and reports have concluded that, in some cases, tax flight, which Kiplinger has reported on relative to high-tax states, may be more of a myth than reality.

Michael Mazerov of the Center for Budget and Policy Priorities said the data doesn’t "support claims that much interstate migration is driven by high-income people — or anyone else — consciously choosing low-tax locations."

Mazerov noted that data from the U.S. Census Bureau and IRS data on interstate migration and academic studies show that what prompts Americans to relocate interstate is chiefly jobs, cheaper housing, and climate, not taxes.

Other studies suggest further reasons high-earning households might be reluctant to move for several tax reasons.

• Some might be prominent community leaders or have high-paying jobs for which they can’t easily relocate.
• Family considerations, like a spouse who might have difficulty finding a satisfactory job in a new location, or one who has children whose lives the parents don’t want to disrupt.
• Long-standing social ties, including generational and intergenerational family relationships.

One difference between California and New York City might be the latter’s status as a wealth hub, "constantly replenishing the ranks of millionaires and billionaires, more than making up for the rich who move out," according to a CNBC report. As of July 2025, there are "over 33,000 New Yorkers worth $30 million or more."

In New York, the feared flight of the rich — the so-called "Mamdani effect" — has yet to materialize.

Local realtors report that sales of luxury homes $4 million and above in November were up by double-digit percentages from October. Rents for Manhattan (the city’s most expensive borough) apartments have also soared.

According to Corcoran Realty Group, even if Mamdani’s tax is implemented, wealthy residents’ flight "isn’t going to happen overnight. People don’t flee the city simply because the taxes are gonna go up two percent."

Much ado about nothing?

The fate of the "millionaire's tax" now rests in Albany. New York Assembly Speaker Carl Heastie, Senate Majority Leader Andrea Stewart, and Democratic Gov. Kathy Hochul are currently in the final stages of negotiating the state budget following their March proposals.

While Stewart and Heastie have signaled support for the tax increases to align with Mamdani's vision, Gov. Hochul remains the primary obstacle. In her current executive budget stance, she has proposed increased state aid to the city to help plug the budget gap without resorting to new tax hikes.

Bottom Line? The "Mamdani effect" remains a legislative gamble. With Hochul’s potential veto looming against the Mayor’s ambitious social agenda, wealthy New Yorkers are watching the headlines to decide if they will be staying in the city or heading for the exits.

Related

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Tired of feeling in a tight spot come tax time? You’re not alone. According to a recent Pew Research report, slightly more than half of Americans believe they pay “more than their fair share” in taxes.

Fortunately, you could have a say over how much the taxman takes if you’re willing to relocate. But you should consider a state’s overall tax landscape before making a move.

For instance, some states make up for low income taxes with higher taxes in other areas, such as sales and property tax rates — making you perhaps no better off than you were before relocating, tax-wise.

Kiplinger found the one U.S. state that might offer the best balance of low income, sales, and property taxes for your family’s wallet.

The most tax-friendly state for the middle class

To determine the “most tax-friendly state for the middle-class,” Kiplinger considered each state's median annual salary to determine which states have the lowest tax burden for households with middle incomes.

Then we calculated the average annual tax spent on three tax categories: state income tax, property taxes, and sales taxes on essential items (groceries, diapers, and gas). (See the end of the article for more information about methodology.)

The state with the lowest tax burden is considered the most "tax-friendly " for these rankings.

Best state for middle-class taxes

Nevada.

Nevada has no state income tax, which is one reason it’s the most tax-friendly state for middle-class families. Among the many types of income that you’ll find tax-exempt in the Silver State are:

• Investment income (Nevada is one of the most tax-friendly states for investing).
• Short-term rental income and capital gains.
• Most retirement income, such as 401(k) withdrawals and Social Security benefits.

Nevada residents save on property tax bills, too. The annual median property tax paid in the Silver State is $2,143, which is about $1,000 less than the national average, according to U.S. Census Bureau data.

• This is partly due to Nevada’s effective property tax rate of .49%, per the Tax Foundation, which is one of the lowest rates in the nation.
• Nevada has a property tax abatement law that caps yearly increases on property taxes for primary residences, protecting homeowners from sudden hikes.

Even better is that the Silver State is one of the few states that don’t tax inheritance or estates, meaning more money for your heirs is also tax-exempt.

But although these tax benefits generally outweigh the tax cons in our ranking, as with all states, there might be a few tax reasons you wouldn’t want to move to Nevada. Let’s go over those next.

Nevada taxes for middle-class families

Nevada has low taxes compared to other states, yet there is one primary tax caveat that might raise an eyebrow for middle-class families.

• The Nevada sales tax rate is 6.85%, which may be higher than where you are living now.
• This is especially true when you factor in local taxes, which average 1.39%, for a combined average local and state tax rate of 8.24%, per the Tax Foundation.

Yet while Nevada might levy higher sales taxes to compensate for lower taxes in other key areas, several essentials are exempt from the Silver State’s high sales tax rate.

• Nevada has one of the lowest state gas tax rates in the U.S., which might help reduce your weekly commuting expenses (though local taxes can raise the rate).
• Groceries, diapers, prescription medicine and feminine products are all tax-exempt in Nevada, which might further reduce your monthly spending.

If most of your annual spending is on essentials, you might save on your state sales taxes even if the Nevada rate is a little higher than where you currently reside.

Is Nevada a good state for middle-class families?

Before you’re ready for a move to Nevada, there are other important factors to consider.

While Kiplinger’s ranking considered state tax burdens, you’ll probably want to research other key considerations, like cost of living, political climate and crime rates.

• For instance, Nevada is famously known for extreme heat, which might increase your monthly utility bill. The state’s desert geography makes the transportation of goods more challenging and limits local agriculture compared to most other states. Because of this, the cost of groceries might be higher than where you live now.
• Yet year-round sunshine supports Nevada’s thriving outdoor recreation scene, with a variety of national parks, and entertainment centers like Las Vegas.
• However, Nevada typically receives a lower score in national rankings that compare pre-K-12 education quality and outcomes.

Ultimately, consider your family’s unique lifestyle and financial needs before deciding to move to a new locale. Just because Nevada is generally the most tax-friendly state for middle-class families, it might not be the most optimal state for you and your family.

Note: No matter where you move, federal income taxes still apply, and local taxes might vary. The definition of “middle-income” can also differ greatly. For purposes of this ranking, “family” means any household with at least one adult still raising at least one child. The amount of taxes paid can vary depending on several factors, including family size and the number of adults in the household who work. Full details about the methodology Kiplinger used to rank state tax burdens for this story are available in Kiplinger’s report, Low-Tax States for 'Middle-Class' Families in 2026.

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More than three-quarters of Americans 50 and older say they want to remain in their homes after they retire, but sharp increases in property taxes have made aging in place unaffordable.

Unlike income taxes, which often decline in retirement, property taxes are based on the value of your home — and in many parts of the country, assessed values have skyrocketed in recent years. Median property taxes rose by an average of 10.4% between 2021 and 2023, according to an analysis of the latest data available by LendingTree, an online marketplace for consumer loans. The median property tax in 2023 was nearly $3,000 ($2,969), but median property taxes in 50 metropolitan areas ranged from $1,091 to nearly $10,000, according to LendingTree.

Before writing a check for your next property tax bill, make sure you take full advantage of property tax relief programs offered by your state or locality. While more than 9 million Americans likely qualify for property tax relief, only about 8% apply for it, according to the AARP. “Many aren’t aware these programs exist or assume they’re not going to qualify,” says Nicole Heckman, vice president of well-being for the AARP Foundation.

The types of property tax relief available vary, not only by state but by individual counties and jurisdictions. Many states and jurisdictions offer expanded relief to homeowners who are 65 or older; some offer breaks to homeowners who are 61 and older. Veterans and residents with disabilities may also qualify for a reduction in their property taxes. While eligibility is often income-based, the income thresholds “can be pretty expansive,” Heckman says, so don’t assume you earn too much to qualify. In New Jersey, for example, homeowners with incomes of up to $500,000 are eligible for reimbursement of a portion of their property tax bill.

Tax relief isn’t automatic. In most cases, you must fill out an application and file it by a deadline set by your locality or state. Some jurisdictions require you to apply in person. Other states and localities allow you to apply online, but that can be challenging for older adults who don’t have broadband internet, Heckman says.

The AARP Foundation’s Property Tax Aide program, now in its fifth year, allows homeowners to research more than 140 programs in 50 states and Washington, D.C. Users can find details on eligibility, deadlines and where to get help. The average amount of relief provided through the program is $400, but some users have saved up to $1,000, Heckman says. Many states allow eligible homeowners to apply for up to three years of back tax relief, she says. “That can be a significant credit or refund.”

Some types of relief states and localities offer homeowners:

1. Tax credits and refunds

More than a dozen states offer property tax credits or refunds to eligible older adults in amounts ranging from $250 to $2,730. Pennsylvania provides rebates ranging from $380 to $1,000 for eligible older and disabled residents. Tennessee refunds all or a portion of property taxes paid by eligible residents.

Minnesota provides two types of property tax refunds: one based on homeowners’ income and the amount of their property taxes, and another based on how much residents’ property taxes have increased. (Some residents qualify for both, and the program isn’t limited to older adults.) Cindy Rieck, 68, of Pequot Lakes, Minn., whose home has nearly doubled in value since she purchased it in 2007, says she received a refund of $1,200 in 2024.

2. Expanded homestead exemption

Property taxes are based on the assessed value of your home, which may differ from its appraised or market value. A homestead exemption lowers the assessment, thus reducing your property tax bill. Most states offer some kind of homestead exemption for residents, but many states provide an additional homestead exemption for older adults.

Florida, for example, allows residents to exempt up to $50,000 of their home’s assessed value from property taxes (which will increase with the rate of inflation starting in 2025), but jurisdictions in the state have the option of providing an additional $50,000 exemption to eligible homeowners 65 and older.

Texas recently increased its homestead exemption to $140,000 for all residents. The state provides an additional $60,000 exemption for residents age 65 or older, for a total combined homestead exemption of $200,000. Texas now allows individual jurisdictions to add $3,000 to that amount.

3. Assessment freeze

In Arizona, homeowners ages 65 or older who have lived in their primary home for at least two years and meet income limits can have their property’s valuation frozen for three years. New Jersey has a “senior freeze” program that reimburses property tax increases for eligible residents who have owned their homes for at least three years.

4. Tax deferral

Illinois allows eligible homeowners 65 and older to defer up to $7,500 of property taxes on their principal residence. California, Maine, Minnesota, Vermont and Washington also allow eligible older adults to defer property taxes.

If you sign up for deferral, the state or locality will place a lien on your home; the taxes must be paid, usually with interest, after you die or sell the home. That’s important to consider when planning your estate. If your heirs sell the home, the back taxes will reduce the amount they’ll receive from the proceeds, and if they want to keep it, they’ll be on the hook for the taxes you deferred. “If you can afford it, you may decide you’d rather pay the tax now and not have something your heirs will have to worry about when they sell the property,” says Jared Walczak, vice president of state projects at the Tax Foundation in Washington, D.C., a tax-policy research organization.

Other options to cut your tax bill

Applying for property tax relief is just one way to lower your tax bill. Other options that may be available to you:

Claim a deduction
The One Big Beautiful Bill Act, signed into law in July, allows homeowners to deduct up to $40,000 in state and local taxes, up from a cap of $10,000. The provision takes effect in 2025 and expires in 2029. The legislation also expanded the standard deduction for eligible taxpayers 65 and older, so for many older adults, claiming the standard deduction will still provide the lower tax bill. However, if you live in a high-tax state and have other deductible expenses — large charitable contributions, for example — it’s worth running the numbers with your tax preparer or on a tax software program to determine whether you should itemize on your 2025 tax return.

Challenge your property tax bill
If you believe your assessment was inaccurate or outdated, you may be able to lower it by filing an appeal. Review your property’s record card, usually available on your locality’s website or by request. If you find an obvious error — four bedrooms instead of two, for example — your assessor may agree to lower the assessment on the spot.

If the information on your property’s record card is correct but you believe your assessment was higher than those for comparable homes in your neighborhood, you can use that information to file an appeal. Check your local government’s website for deadlines and procedures. Realtor.com offers a tool that will provide you with an estimate of the market value of your home, along with estimated values of other homes in your neighborhood. The tool is free but you must create an account to use it.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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Much of the attention surrounding the recent November 4 elections centered on key races in states including New York, New Jersey, and Virginia.

However, Texas voters made a move of their own, approving Proposition 2. That amendment to their state constitution will solidify a ban on Texas capital gains taxes, including those on unrealized gains.

But wait: isn’t Texas already a state with no income tax? Why would voters need to prevent a tax on capital gains that has never been imposed? As you might expect, answers to these questions involve economic and political considerations.

So, here’s more of what you need to know, including what the Texas move could mean for other states.

Texas capital gains tax ban

The passage of Proposition 2 aligns with the Lone Star State's longstanding policy of not imposing a personal income tax (including capital gains taxes). However, once certified, the amendment will reinforce that by constitutionally prohibiting future taxes on capital gains, whether realized or unrealized.

Key Points:

• At first glance, the idea of banning capital gains taxes in Texas may seem unnecessary. (The state has never implemented taxes on capital gains, primarily because it does not have a personal income tax.)
• However, given the changing policies in other states without income taxes, along with proposals for a "wealth tax" discussed during the Biden administration, there are some floating concerns about potential future taxation of unrealized capital gains.
• Since no U.S. state or the federal government has yet introduced an unrealized gains tax, some view the actions being taken in Texas as symbolic and preemptive.

According to reports of unofficial numbers, approximately 65% (just under 2 million Texans) voted in favor of the ban, while 35% voted “no.”

Future plans to tax unrealized gains?

An unrealized gain occurs when the value of an asset you own increases, but you haven't sold the asset yet. So, the gains are what some refer to as “paper gains” since they haven’t been realized tangibly.

• Generally, only realized gains are taxed in the U.S. Some argue that this allows the already ultra-wealthy to accumulate more wealth while avoiding paying their “fair share” of taxes.
• (For instance, billionaires can typically avoid income taxes by living off loans secured by appreciated assets rather than selling those assets, which would trigger capital gains taxes.)

The Biden administration had proposed a 25% tax on unrealized gains for ultra-wealthy individuals holding $100 million or more in assets. Biden also floated taxing unrealized gains at death for gains exceeding $5 million for single filers and $10 million per married couple.

At the time, those ideas ignited political and policy debate about everything from practicality and fairness to economic impact. However, the most important thing to know now is that under current U.S. tax law, investors are generally taxed only on realized gains.

Still, the idea (or fear of the concept) has lingered in some state tax policy debates.

Washington capital gains tax controversy

Interestingly, Washington state also has no personal income tax, but it has had a controversial capital gains tax for the last few years.

• Washington’s capital gains tax initially imposed a 7% tax on long-term capital gains above an annual exemption ($270,000 for 2024, with inflation adjustments).
• The tax applies to profits from the sale of stocks, bonds, and other non-retirement assets, while exempting real estate, retirement accounts, and many small business sales.
• Now, under recent state legislation, a new 2.9% surcharge applies to net long-term capital gains exceeding $1 million above the exemption, effective retroactively from January 1, 2025.

Washington’s approach contrasts with the Texas constitutional ban, highlighting the different strategies states are adopting to fund public services and manage tax policy.

For example, during the 2024 election, Initiative 2109, a measure to repeal the capital gains tax, appeared on the Washington state ballot. But as Kiplinger reported, voters there rejected the repeal effort, with over 63% voting “no.”

The state uses the capital gains tax revenue to fund education (K-12 and early learning) and child care programs. According to Washington’s Department of Revenue, the levy has raised over $1 billion for education and school construction in its first three years

Missouri capital gains tax eliminated

On the other side, Missouri recently became the first state with an individual income tax to ban capital gains taxes.

As Kiplinger reported, on July 10, 2025, Missouri Gov. Mike Kehoe signed House Bill 594 into law. That legislation eliminates the state tax on capital gains for individuals, effective January 1, 2025.

In a statement regarding the bill’s passage, the governor described the tax changes as pro-growth — “keeping more money in the hands of Missouri families and less in government coffers.”

The measure is projected to cost Missouri around $350 million a year.

And speaking of revenue, while Texas voters favored locking in tax protections, some critics argued that bans like Proposition 2 could ultimately limit revenue streams essential for public services, including schools, infrastructure, and health care. There were also concerns that the measure could limit legislative flexibility in the future.

Supporters contend that low and predictable taxes foster economic growth, attract businesses, and encourage investment.

Worth noting: The Washington state capital gains tax sparked warnings of “wealth flight.” Some critics worried that high-income individuals and entrepreneurs would leave in favor of states with lower or no capital gains taxes.

However, data so far seems to tell a different story.

• In its first year, the Washington cap gains tax reportedly generated approximately $840 million — well above projections.
• A subsequent drop the next year, to about $418 million, was attributed to market volatility, rather than a mass exodus of wealthy residents, according to the state’s Department of Revenue.

Federal capital gains tax rates

For now, the fact is that at the federal level, the capital gains tax framework hasn’t changed since President Donald Trump’s second term began. His administration has essentially maintained lower rates from previous administrations without pursuing unrealized gains taxes.

• For 2025 (returns you’ll file early next year) and 2026 (returns typically filed in early 2027), the long-term capital gains tax rates remain at 0%, 15%, and 20%, but the income thresholds have shifted.
• Note: Remember that short-term capital gains (assets held for one year or less) are taxed at ordinary income tax rates, different from those for long-term capital gains.

For taxpayers and investors, the Texas amendment may reinforce the state’s reputation as a low-tax state. Although even low-tax states have their pros and cons.

For other states, moves like those in Texas and Missouri (or even Washington) could serve as reference points as they decide whether to consider new taxes or strengthen protections against them. Stay tuned.

Read More

• IRS Updates Capital Gains Tax Thresholds for 2026
• Texas Property Tax Relief: What to Know Now
• States With Low and No Capital Gains Tax in 2025

A lot’s happening with Ohio property taxes, and that’s not just because property tax bills are rising.

Earlier this summer, Gov. Mike DeWine vetoed several budget-line items that would’ve provided property tax relief in the Buckeye State. DeWine reportedly vetoed the measures due to concerns about school funding, and instead formed a working group of local officials and former lawmakers to consider new proposals for relief.

However, the Ohio House overrode the veto on two of the provisions, and this month, the Ohio Senate followed. Now there’s a new property tax law for Ohio homeowners in 2026.

But what does all that mean for your next property tax bill? Read on.

Why are Ohio property taxes so high?

Ohio’s property tax rate is 1.3%, which is higher than the national average, according to the Tax Foundation. Yet that alone doesn’t account for extraordinarily high property tax bills in the Buckeye State. Home valuations also contribute to high Ohio property taxes:

• The median price of a single-family home has increased by 70% over the last five years, according to the most recent data from Redfin.
• That means a home that used to cost a buyer $196,000 now costs $278,900.
• The increase in Ohio home values is largely due to the post-pandemic housing boom and recent high inflation.

Unlike most states that reappraise home values every one to five years, Ohio properties are typically assessed only once every six years (though an update may be conducted the third year after a full assessment). Consequently, property tax bills often surge from one evaluation to the next, especially during housing booms.

Another way Ohio property tax bills may rise is through replacement or emergency levies — although these will soon be a thing of the past. A recently enacted law has eliminated new levies of this kind.

Ohio property tax relief may come in 2026

Just four months ago, DeWine vetoed several property tax reform measures in the state budget, reportedly voicing concern that the provisions could lead to financial instability for state schools.

After all, the Buckeye State collects roughly $19 billion in property taxes annually, with significant collections going into local government coffers.

Most of the struck-down provisions died on the governor’s desk. But the Ohio General Assembly recently overrode the veto on two measures, making the following law as of January 1, 2026, and later:

• Elimination of new replacement property tax levies. Localities (like school districts) can no longer ask voters to replace an expiring levy with a new one based on the current valuation of properties. This allows existing levies to be renewed based on historical (and typically lower) property tax rates.
• Elimination of new emergency property tax levies. Local officials are no longer able to ask voters to approve a fixed-year emergency levy to raise additional property taxes for school funding, even if a school district is experiencing a financial shortfall.

While neither measure will cut current property taxes, eliminating these two levies may provide future property tax relief to Ohioans over time.

Still, localities will most likely bear the brunt of the tax cuts. Data show 29% of Ohio's state and local revenue comes from property taxes. That makes Ohio slightly more reliant on property tax revenue compared to the national average.

Plus, with the Buckeye State’s recent cut to income taxes, localities might receive less income tax revenue than in years past, further pressuring school and local jurisdiction budgets.

Ohio property tax relief proposals on the way

Rather than endorsing specific budget items for property tax relief, DeWine recently formed a working group. This group, composed of county auditors, school superintendents, and former legislators, was tasked with identifying methods to reduce property taxes for Ohio residents.

Many Ohio property tax relief proposals came out of the working group on September 30. Here are a couple that focus on Ohio homeowners:

• Expanding the homestead exemption. The proposal would raise the income threshold to allow more Ohioans 65 and older (or disabled) to qualify for property tax relief. The proposal would also increase the tax break’s valuation amount.
• Implementing a new property tax “circuit breaker” program. This would provide relief to homeowners when their property tax bill exceeded a certain percentage of their income.

But that’s not all. Just a day after the working session concluded, an Ohio House committee held a hearing on two property tax bills. One of them, House Bill 186, proposes capping property tax increases at the rate of inflation. Supporters claim that Ohio homeowners could save $1.7 billion over the next three years if the bill is passed.

HB 186 is currently under review in the House Ways and Means Committee. The working group recommendations are awaiting legislative action from the General Assembly.

Stay tuned for further updates.

Read More

• How to Reduce Your Property Tax
• Ten Tax Breaks for Homeowners in 2025
• Ohio Tax Guide 2025

The One Big Beautiful Bill Act, signed into law in July, has wide-reaching implications for taxpayers. From an enlarged standard deduction for older adults to more-generous tax credits for families with young children, the legislation contains a plethora of provisions that could lower your 2025 tax bill — or, in some cases, increase it.

Just as noteworthy as the new rules are those that extend provisions from the 2017 Tax Cuts and Jobs Act (TCJA). The OBBBA makes permanent the reductions in federal income tax rates that the TCJA implemented. (Otherwise, those tax rates would have expired on December 31.)

In addition, the OBBBA increases the federal estate tax exemption from $13.99 million per person in 2025 to $15 million per person, or $30 million for a married couple, in 2026. It will be adjusted annually for inflation.

Without congressional action, the exemption would have dropped to about $7 million after 2025. Because of the exemption’s size, the vast majority of taxpayers don’t need to worry about paying federal estate taxes.

You may want to schedule an appointment with your financial planner or tax preparer to discuss how the bill will affect your 2025 tax liability.

“You’ve got to run the numbers, because there’s so much that’s changing,” says Tim Steffen, director of advanced planning at Baird.

To get you started, we have guidance here on how to get the most from some of the significant provisions in the OBBBA.

A BONUS DEDUCTION FOR OLDER ADULTS

Starting with the 2025 tax year, taxpayers who are 65 or older will be eligible for an additional standard deduction of $6,000. The bonus deduction, which is scheduled to expire at the end of 2028, comes on top of an existing extra standard deduction of $2,000 for single filers who are 65 or older or, for married couples who file jointly, $1,600 for each spouse who is 65 or older.

The expanded deduction means a single taxpayer who is 65 or older will be able to deduct up to $23,750 from taxable income, while a married couple who file jointly will qualify for a deduction of up to $46,700, assuming both are 65 or older.

That can translate to significant savings for older taxpayers. For example, an older married couple in the 22% tax bracket (for 2025, that includes income of $96,951 to $206,700) could see tax savings of $2,640 a year, says Marilou Davido, a certified financial planner in Milwaukee.

Older taxpayers in lower tax brackets could save $600 to $1,200 a year, she says.

The legislation won’t eliminate taxes on Social Security benefits. But because the taxability of benefits is based on a calculation involving your adjusted gross income, the OBBBA will reduce the number of beneficiaries who pay the taxes from 36% to 12%, according to the White House Council of Economic Advisers.

Now for the caveats: The bonus standard deduction will affect only eligible taxpayers whose income exceeds the amount of the deduction, so low-income people won’t benefit from this tax break.

At the other end of the spectrum, higher-income taxpayers could see the amount of the bonus deduction reduced or eliminated altogether.

The deduction starts to phase out for couples with modified adjusted gross income of more than $150,000 ($75,000 for single filers) and is fully phased out at MAGI of $250,000 ($175,000 for singles). Your modified adjusted gross income is your adjusted gross income with certain deductions added back.

The higher standard deduction won’t shield Medicare beneficiaries who pay a surcharge, known as the income-related monthly adjustment amount (IRMAA), on their Part B and Part D premiums. The surcharge is based on a version of your MAGI that’s specific to Medicare and is calculated before the standard deduction applies.

Taxpayers whose MAGI is close to surpassing the eligibility threshold for the bonus standard deduction should consider avoiding moves that could reduce this tax break’s value.

For example, converting funds in a traditional IRA to a Roth IRA could reduce or eliminate the bonus deduction by increasing your MAGI, says Davido.

If you want to convert to a Roth, consider spreading out the conversions over several years to keep your MAGI below the threshold, she says.

One argument in favor of doing a Roth conversion is that it protects your nest egg from future tax increases, because Roth withdrawals are tax-free as long as you’re 59½ or older and have owned the Roth for at least five years.

But now that the OBBBA has extended current tax rates, individuals can spread out conversions without fear of a tax increase, at least under the current presidential administration, Davido says.

Timing matters, too: Converting to a Roth before age 65 would avoid the potential loss of the bonus deduction.

Capital gains distributions and withdrawals from traditional IRAs will also increase your MAGI. But there are steps you can take to offset that income and preserve the bonus deduction.

If you’re still working, increasing pretax contributions to 401(k) plans and health savings accounts (HSAs), for example, will reduce your MAGI.

Individuals who are 70½ or older can reduce their MAGI by making qualified charitable distributions from their IRAs, says Todd Calamita, a CFP in Charlotte, N.C.

In 2025, taxpayers can make QCDs of up to $108,000 from their IRAs to qualifying charities. If you’re 73 or older, a QCD will also count toward your required minimum distribution (RMD). A QCD isn’t deductible, but it’s excluded from taxable income.

Davido recommends working with your tax preparer or financial planner before year-end to adjust income-tax withholding and estimated tax payments for 2026. The bonus standard deduction could enable you to reduce the amount of tax withheld from your Social Security benefits and IRA withdrawals; you may also be able to lower your quarterly estimated tax payments.

A BIGGER BREAK FOR HOMEOWNERS

The OBBBA contains a valuable tax break for homeowners who live in high-tax states, and like the bonus standard deduction, the change could affect your 2025 tax bill.

Starting in 2025, those who itemize will be able to deduct up to $40,000 in state and local taxes (SALT), up from a cap of $10,000. The cap will increase by one percentage point each year through 2029, then return to $10,000 in 2030.

The SALT deduction includes state income, property and sales taxes; it’s often most useful for property taxes, which have soared as home values have risen in recent years. The primary beneficiaries will be homeowners in states with high property taxes, such as New Jersey and New York.

The cap is gradually reduced for those with MAGI above $500,000 ($250,000 for a married individual filing separately), and taxpayers with MAGI of $600,000 or more will be limited to deducting $10,000 on their tax returns.

Consequently, homeowners who are eligible for the higher cap need to be even more mindful of their 2025 MAGI, says Robert Keebler, a CFP with Keebler and Associates in Green Bay, Wis. This phaseout is potentially more costly than the phaseout for the bonus standard deduction, he says.

Keebler offers this example: Suppose you’re married, file jointly and have a MAGI of $500,000. Your itemized deductions include $40,000 in state and local taxes. If you convert $100,000 from a traditional IRA or 401(k) to a Roth, your gross income rises to $600,000, and your state and local tax deduction is reduced to $10,000. While your gross income went up by $100,000, your taxable income rose by $130,000.

At a 35% marginal rate, your effective rate on the conversion is 45.5%.

As is the case with older taxpayers, homeowners who are eligible for the higher SALT cap should consider spreading out Roth conversions and taking other steps to keep their MAGI below the thresholds.

Homeowners in high-tax states may get even more out of the higher cap by bunching their itemized deductions.

For example, if you paid your 2025 property taxes earlier this year and receive a bill for 2026 in December, pay it before December 31 so you can deduct both payments on your 2025 tax return, Davido says.

Using the bunching strategy, you would claim the standard deduction in 2026 and make two property tax payments in 2027 so you can itemize in that year.

Bunching your charitable contributions is also an effective way to increase your itemized deductions and lower your tax bill.

A donor-advised fund is a useful tool for this strategy. These funds, offered by major financial institutions, allow you to make a large contribution, deduct the donation on the current year’s tax return, and decide later which charities you want to support.

However, there are other provisions in OBBBA that could reduce the effectiveness of this strategy, which we’ll discuss below.

NEW STRATEGIES FOR CHARITABLE CONTRIBUTIONS

As you consider your year-end charitable contributions, it’s important to understand new tax breaks for givers — along with new limits on how much some donors will be allowed to deduct.

Starting in 2026, taxpayers who don’t itemize can deduct up to $1,000 in charitable contributions, or up to $2,000 for married couples who file jointly. Donations to donor-advised funds and private foundations aren’t eligible for this new deduction.

If you don’t itemize and want to take advantage of this tax break, consider making the charitable contributions you’d ordinarily make by the end of this year in January 2026 instead.

Meanwhile, taxpayers who itemize on their tax returns and deduct charitable contributions will be subject to a new limit on the amount they can deduct. The maximum amount of cash gifts donors can deduct will remain at 60% of AGI.

However, starting in 2026, the deduction will be limited to the amount of charitable contributions that exceed 0.5% of adjusted gross income, Steffen says.

For example, a married couple with AGI of $100,000 who donate $700 to charity will be permitted to deduct only $200.

To avoid that new floor, itemizers may want to make their 2026 contributions in 2025, keeping in mind how that will affect other aspects of their tax bill.

Taxpayers in the top tax bracket (for 2025, that includes income higher than $626,350 for singles or $751,600 for joint filers) may also want to accelerate charitable contributions into 2025 because of a cap on all itemized deductions those taxpayers can claim.

Starting in 2026, the amount of itemized deductions taxpayers in the 37% tax bracket can claim will be limited to 35% of their taxable income.

MORE BENEFITS FOR HEALTH SAVINGS ACCOUNTS

A health savings account can be a valuable tool to set aside money for both current and future health care expenses. An HSA provides a triple tax break: Your contributions are tax-deductible (or pretax if made through your employer), the money grows tax-deferred, and you can use it tax-free for eligible medical expenses in any year.

After you turn 65, you can also withdraw money tax-free from the HSA for Medicare premiums, in addition to other out-of-pocket health care costs.

The new law has three HSA-related provisions. Starting on January 1, 2026, you can withdraw up to $150 per month ($300 for couples) from an HSA tax-free to pay monthly or annual fees for direct primary care arrangements (also known as concierge medicine), in which doctors provide services in exchange for a membership fee.

The law also clarifies that enrolling in a direct primary care arrangement does not disqualify someone from being able to contribute to an HSA if they also have an eligible high-deductible health policy.

Not all concierge practices qualify under the new law as direct primary care arrangements — there are limits to the types of services they can provide beyond primary care.

Additionally, the law permanently exempts telehealth services from the HSA-qualified plan deductible. Most medical care, except for some preventive care, must be subject to the deductible for a health insurance policy to be HSA-qualified.

During the COVID pandemic, you could receive some telehealth services without first paying the plan’s deductible — typically with a $5 or $10 co-payment — but that rule expired at the end of 2024. The OBBBA permanently exempts telehealth from the deductible requirements, retroactive to January 1, 2025.

Finally, bronze plans and catastrophic plans sold on the Affordable Care Act insurance marketplace will automatically be HSA-qualified, starting with the 2026 plan year.

Using an HSA-eligible bronze plan and making tax-free withdrawals from your HSA to pay for direct primary care could be a win-win, says Roy Ramthun, founder and president of HSA Consulting Services LLC in Silver Spring, Md.

You can sign up for direct primary care for your regular doctor’s visits but have a high-deductible bronze plan as a backstop if you end up needing expensive medical care. You’ll be eligible to contribute to an HSA, and you can also use HSA money tax-free to pay the monthly direct primary care fees.

Notably, the version of the OBBBA that originally passed the House of Representatives would have allowed people who sign up for Medicare Part A to contribute to an HSA. But that provision wasn’t included in the final law, so the current rules still stand: You can make HSA contributions only if you haven’t enrolled in either Medicare Part A or Part B.

If you or your spouse is still working and you have health insurance from an employer with 20 or more employees, you can delay signing up for Part A and Part B. But you must enroll within eight months of losing that coverage; otherwise, you could face a lifetime late-enrollment penalty for Part B.

If you sign up for Part A after you turn 65, that coverage takes effect up to six months retroactively. Keep that time frame in mind when calculating your HSA contribution.

CHANGES TO THE HEALTH INSURANCE MARKETPLACE

Several administrative changes are coming to Affordable Care Act marketplace coverage because of provisions in the OBBBA, as well as new rules from the Centers for Medicare & Medicaid Services.

The open-enrollment period to sign up for a marketplace plan will be shorter. Next year, open enrollment for the federal marketplace (HealthCare.gov) will run from November 1, 2026, to December 15, 2026. States that operate their own marketplaces won’t be allowed to extend open enrollment past December 31. Currently, open enrollment goes to January 15, and even longer in some states.

Before you enroll in a marketplace plan, you’ll need to provide evidence of income eligibility for tax credits for your premiums. (Currently, you have 90 days after you enroll to submit the information.)

If your income increases after you enroll and you don’t update your information with the marketplace, you may have to pay back the extra subsidy when you file your income tax return.

Under the previous rules, there were limits to how much you have to pay back if you underestimate your income.

Enhanced subsidies are scheduled to expire

Perhaps the most consequential outcome for ACA plan enrollees is that the OBBBA didn’t extend enhanced premium subsidies for marketplace coverage. The enhanced subsidies are set to expire at the end of 2025, and Congress probably won’t pass additional legislation to extend them.

So the size of the subsidies and the income levels to qualify are likely to shrink significantly on January 1, 2026. People who earn more than 400% of the federal poverty level will no longer be eligible for any subsidies after 2025. For 2026 marketplace plans, 400% of the poverty level is $62,600 for singles and $84,600 for couples.

If you have individual health insurance from the ACA marketplace and you plan to do Roth conversions, you may want to convert more money before the end of 2025 than in 2026, when the extra income may make you ineligible for the subsidy.

“For a retired client, we’ve been able to do about $100,000 of Roth conversions yearly with the enhanced premium tax credits,” says Mark Whitaker, a CFP and founder of Retirement Advice LLC, a fee-only financial planning firm in Provo, Utah.

“Going forward, to hit their ACA subsidy levels, they will only be able to do about $60,000 of Roth conversions a year.”

But be sure to consider other variables, too, such as your tax rate and other income cut-offs. (For more, see the section above on the bonus deduction for older people.)

UPDATES FOR FAMILIES

If you have kids at home, you may benefit from multiple provisions in the OBBBA.

More-generous tax credits for parents

The OBBBA permanently extends the child tax credit and increases it to $2,200 per child, up from $2,000. The credit phases out for singles with modified adjusted gross income of $200,000 or more and married couples who file jointly with MAGI of $400,000 or more.

The OBBBA also makes permanent a separate credit of up to $500 for families with other dependents, such as parents or adult relatives.

The adoption tax credit is more valuable, too. If you adopted a child this year, you can claim a credit for up to $17,280 in eligible expenses. Here’s what’s new: $5,000 of the tax credit will be refundable.

In other words, taxpayers with tax liability of less than $5,000 can still claim that portion of the credit, which means some of that amount could be returned to parents as a refund.

Starting in 2026, the maximum tax credit parents can claim for child and dependent care expenses, such as the cost of day care or a nanny, will increase to 50% of as much as $3,000 in expenses for one dependent and 50% of as much as $6,000 for two or more dependents (both up from 35%).

The credit decreases based on adjusted gross income to as little as 20% of expenses, but OBBBA increased the income thresholds. For married couples with AGI between $150,000 and $210,000, the credit ranges from 35% to 20%. Couples with AGI of $210,000 or more are eligible for a credit of 20% of expenses.

Expanded uses for 529s

Originally designed as a tax-advantaged way to save for college, 529 plans have been expanded over the past several years to permit tax-free withdrawals for certain non-college expenses, too. The OBBBA extends these uses even further.

“The new rules allow up to $20,000 per year to be used for elementary and secondary school tuition, course materials, tutoring, fees for standardized tests, and more,” says Robert Farrington, founder of the website The College Investor.

Previously, tax-free withdrawals of 529 money for K-12 students were limited to tuition, up to $10,000 annually.

The legislation also permits tax-free 529 withdrawals for certain other expenses, such as non-degree credential programs for plumbing, electrical, HVAC and some other trades; certification and licensing expenses; and continuing education required to maintain those licenses.

That means beneficiaries who don’t go to college will have additional ways to benefit from tax-advantaged 529s.

The law permanently allows rollovers from 529 plans to ABLE accounts, where the money can continue to grow tax-deferred for people with disabilities who may not go to college.

Most of the changes related to 529 distributions took effect as soon as the law was signed on July 4, although the increased, $20,000 annual limit for K-12 expenses doesn’t apply until the 2026 tax year.

Keep in mind that not all states have altered their rules to follow the federal expansion. “For example, California doesn’t allow 529 plans to be used for elementary or secondary school expenses,” says Farrington.

Trump accounts for kids

The OBBBA introduces a new investment account — known as a Trump account — for kids younger than 18, and the government will seed the account with $1,000 for children born between January 1, 2025, and December 31, 2028.

Parents and others can contribute up to $5,000 a year to the account until the child turns 18. Contributions are invested in a fund that tracks a broad U.S. stock index, and they grow tax-deferred.

You may have better options for your child’s long-term savings. Annual contributions are not tax-deductible, and earnings are taxed at the beneficiary’s income tax rates when withdrawn.

Unless the money is used for certain expenses, such as education or up to $10,000 for a first-time home purchase, you’ll have to pay a 10% early-withdrawal penalty before age 59½.

“The only advantage of Trump accounts is the $1,000 birthday gift for newborn children. Families should, of course, accept the free money,” says Mark Kantrowitz, a college-savings expert and author of How to Appeal for More Financial Aid.

But for your child’s future college expenses, you’re better off contributing to a 529 plan, because withdrawals for qualified educational expenses are tax-free.

LAST CHANCE TO CLAIM TAX CREDITS FOR THESE ENERGY-SAVING MOVES

The OBBBA speeds up the deadlines to take advantage of certain tax credits related to saving energy.

The Energy Efficient Home Improvement Credit, which provides a 30% tax credit toward the cost of energy-efficient windows, home energy audits, heat pumps and other energy-saving home improvements, was previously scheduled to phase out in 2033. (The law imposed annual limits for certain projects, such as $600 for exterior windows and skylights.)

But now, the credit expires at the end of 2025. The Residential Clean Energy Credit, which provides a tax credit of up to 30% for more-ambitious projects, such as solar electric panels and solar water heaters, will also expire on December 31. The equipment must be installed and operational by year-end to qualify for the credit.

Additionally, the $7,500 EV tax credit to buy or lease qualified electric vehicles, along with the $4,000 credit for eligible used EVs, ends September 30, 2025.

At the same time, however, the OBBBA provides a new tax break for car buyers: a deduction of up to $10,000 in interest on loans for cars purchased between 2025 and 2028.

You don’t have to itemize to claim this deduction, but it’s available only for loans taken out to buy new cars assembled in the U.S., which rules out many popular models. The deduction phases out for individuals earning more than $100,000 or married couples making more than $200,000.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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It’s no secret that Florida property tax bills are on the rise, but that might change in the new year.

Gov. Ron DeSantis has repeatedly called for a “concrete proposal” on the state’s 2026 ballot to reduce or eliminate property taxes. Voters must approve any major changes to the Florida property tax system with a 60% “yes” vote.

However, some local officials argue that eliminating the property tax in Florida is problematic, particularly since jurisdictions rely heavily on property taxes to fund school, health and other public service programs.

Here’s more of what you need to know about where things stand with Florida property taxes.

Property tax relief proposals in Florida

As Kiplinger reported, DeSantis first proposed eliminating Florida property taxes in February of this year. Even though the proposal is facing legal hurdles and disagreements, a demand for some form of property tax relief has gained enough public interest to justify the formation of a legislative committee.

The Florida House Select Committee on Property Taxes has been tasked with reviewing property tax relief proposals for the upcoming year.

Among the considered proposals for Florida property tax relief:

• Eliminating the state’s property taxes. This is perhaps the most highly debated proposal, as a significant alternative funding source would have to be found (more on that below).
• Broadening the “portability” provision for an existing tax break. Although homeowners can already transfer their Save Our Homes (SOH) (PDF) tax savings from a former homestead to a new one when they move, a potential proposal would increase the allowable transfer amount.

Earlier this year, state lawmakers proposed bills that would raise the recently increased Florida homestead exemption from $50,000 to $75,000 (and one bill proposed raising it to $100,000). Another idea from DeSantis was to offer Florida residents a $1,000 property tax rebate. Yet, all three proposals failed to pass.

Florida property taxes: Necessary or a ‘waste?'

The property tax reform committee has heard objections from some Florida city and county officials against proposed property tax breaks.

During a hearing in September, Casey Cook, chief of legislative affairs at the Florida League of Cities, stated, "Waste is in the eye of the beholder. Nobody likes paying taxes, but safe isn't free. Clean isn't free."

Cook’s remark was in response to DeSantis and other top state officials, who have levied allegations of “waste, fraud and abuse” against Florida localities in recent months. DeSantis claims local spending waste is contributing to soaring property taxes in the Sunshine State.

Many local officials, however, note that increased property tax bills are a result of inflation and higher property values, rather than increased tax rates.

Other locals are reportedly concerned about a "one size fits all" mentality when it comes to state property tax relief.

Cragin Mosteller of the Florida Association of Counties shared with ABC7 News that counties are willing to work with lawmakers on property tax relief, but that reform should consider the unique needs of each community.

Mosteller added, “If you think about the things, whether that’s public safety, fire service, libraries … all of those things are paid for with your property taxes.”

Florida property tax cut funding

Florida collects roughly $43 billion annually in property tax revenue. This funding covers essential taxpayer services, such as public safety, schools, infrastructure and parks.

To make a large-scale property tax cut work, an alternative funding source must be found. The 2025 Florida property tax relief debate has led to several proposals to fund tax cuts:

• An initial state budget draft suggested diverting Florida’s “bed tax” to compensate for property tax cuts. But the proposal wasn't incorporated into the 2025-2026 budget due to potential harm to tourism marketing and promotion efforts.
• Another proposal suggested hiking the state’s sales tax to compensate for lost property tax revenue. However, Florida would need to double its sales tax rate to 12%, according to the Florida Policy Institute.

The next state House hearing is this month. Lawmakers will actively pursue a formal property tax relief proposal with a target goal by November or December 2025. If formalized, the proposed legislation could appear on Florida’s November 2026 ballot.

Stay tuned.

Read More

• 10 Cheapest Places to Live in Florida
• How to Reduce Your Property Tax
• Ten Tax Breaks for Homeowners in 2025
• Florida Tax Guide

If you’re a New York resident, check your mailbox: Hundreds of dollars could be waiting inside. The New York State Office of Taxation and Finance has announced it will issue inflation refund checks as early as this fall.

The event is not because of any special program, like how STAR payments are issued. Instead, New York is providing one-time relief checks to help offset higher sales taxes due to increased inflation.

“This is your money and we're putting it back in your pockets,” Governor Kathy Hochul said in a press release.

However, not everyone’s pockets will qualify for a check — especially if you’re new to the area or make too much money.

NYS inflation check 2025

The inflation refund checks are for eligible New Yorkers who have lived and paid taxes in the Big Apple State. These one-time payments are part of a 2025-2026 state budget provision designed to provide residents with some relief from increased inflationary costs.

In total, 8.2 million payouts will be mailed over the coming weeks, according to Hochul’s office.

Here’s who qualifies for a NY inflation refund check

Eligibility for New York inflation refund checks is based on 2023 state income tax information. For that tax year, you must have met the following criteria:

• You were a full-time New York resident and filed a state income tax return (Form IT-201).
• You were not claimed as a dependent on another taxpayer’s return.
• Your reported income fell within the specified inflation check thresholds (more on that later).

New York inflation tax refund income amounts

To receive an inflation relief payment, your 2023 New York adjusted gross income (AGI) must meet the following requirements.

• Single filers must have $150,000 AGI or less to qualify.
• Joint filers must earn $300,000 AGI or less to qualify.

Heads of household and married individuals filing separately must have made $150,000 AGI or less to qualify for a New York inflation refund. Qualifying surviving spouses may receive one if they earned no more than $300,000 AGI.

Inflation refund check amounts

The amount you receive from the New York inflation check payout will vary based on your AGI and how it compares to specific thresholds and filing statuses. Here’s a schedule below: