A $120,000 salary can produce very different take-home pay in the U.S. purely based on where you live. For immigrants and professionals alike, the biggest driver is not citizenship or visa status. It is the mix of State Income Tax, any city tax, and the state’s Overall Tax Burden.
Think of it like buying the same item in two stores with different checkout rules. The sticker price is identical, but one store adds several extra charges at the register.
What differs across states: the structure, not the taxpayer’s passport
Some states tax wages heavily and keep other taxes lower. Others advertise a 0% state income tax, then raise more money through sales taxes, property taxes, tourism taxes, or business taxes. That is why comparisons should start with structure:
- Does the state tax income?
- What is the Top Marginal Rate?
- Are there local or city income taxes?
Selected state income tax structures and overall burden
| State | State Income Tax | Top Marginal Rate | Local/City Tax | Overall Tax Burden |
|---|---|---|---|---|
| California | Yes | 13.3% | No | Very High |
| New York | Yes | 10.9% | Yes (NYC) | Very High |
| New Jersey | Yes | 10.75% | No | High |
| Illinois | Yes (Flat) | 4.95% | No | Moderate |
| Massachusetts | Yes (Flat) | 5.0% | No | Moderate |
| Texas | No | 0% | No | Low |
| Florida | No | 0% | No | Low |
| Washington | No (income) | 0% | No | Low–Moderate |
| Nevada | No | 0% | No | Low |
| Tennessee | No (wages) | 0% | No | Low |
⚠️ Note that Washington has no wage income tax but imposes other business and capital-gains taxes; readers should consider all tax types beyond wage income
California’s 13.3% and New York’s 10.9% are often the headline numbers. Yet a headline rate is only one piece. Local taxes can change the outcome fast, as New York City residents learn.
Same income, different totals: a simple $120,000 illustration
To make the gap concrete, consider a simplified scenario: a single filer earning $120,000, taking the standard deduction, and claiming no special credits. The federal line item is held constant to show how state and local choices drive the swing.
Illustrative example for a $120,000 salary (single filer)
| State | Federal Tax | State Tax | Local Tax | Total Estimated Tax |
|---|---|---|---|---|
| California | $18,000 | $9,000 | $0 | $27,000 |
| New York City | $18,000 | $8,500 | $4,000 | $30,500 |
| Illinois | $18,000 | $6,000 | $0 | $24,000 |
| Texas | $18,000 | $0 | $0 | $18,000 |
| Florida | $18,000 | $0 | $0 | $18,000 |
- A New York City worker in this illustration reaches $30,500 in total estimated tax.
- A worker in Texas or Florida lands near $18,000.
- That is a difference exceeding $10,000 for the same pay.
For immigrants and professionals, this matters in practical ways: budgeting, rent decisions, student loan planning, and how much cash remains for remittances or family support.
Stay updated on 2026 tax cuts in candidate states and revisit your decision annually. A small rate drop this year could shift your long-term budget if you expect raises or remote-work.
Why “no income tax” states still fund government
A state with a 0% wage tax still has bills to pay. Revenue comes from other places, and the tradeoffs can show up in sales tax rates, property taxes, and fees.
Put differently: states pick different “fuel sources” to run the same engine.
- Texas often leans on sales and property taxes.
- Florida benefits from sales tax and tourism.
- Nevada depends heavily on tourism and gaming taxes.
- California and New York rely more on income tax and, for some taxpayers, capital gains tied to investment income.
Those patterns help explain why the Overall Tax Burden label can differ from what a single rate suggests.
High-tax vs low-tax states: the paycheck is only half the story
Tax is one line in a larger household equation. Cost of living and wages can offset each other.
- California and New York often have higher average salaries and dense job markets.
- Texas and Florida may offer lower taxes and, in many metros, lower housing costs.
- Public transportation and social programs also differ, which can affect commuting costs and family budgets.
A helpful way to read this is as a bundle:
1. Higher tax + higher salary + more services
2. Lower tax + lower salary + fewer services (in many places)
Neither bundle is automatically “better.” The right answer depends on career stage, family size, housing needs, and tolerance for price swings.
Key insight for immigrants and professionals: taxes are location-based
Immigration status does not create a special state income tax category by itself. In many cases, what drives state and local tax exposure is where you live and work, plus each state’s residency-based tax obligations.
Remote work adds a real planning angle. A job based in one state does not always mean you must live in that state, though employer rules and state “sourcing” rules can complicate this. Many people still find that choosing a home state carefully changes their net income.
Even if a state has zero wage tax, other taxes can spike your bill—sales, property, and fees vary widely. Misjudging residency or remote-work sourcing can trigger unexpected state taxation.
2026: nine states cutting income taxes, and why it matters
Tax rates are not static. 2026 brings changes that may affect relocation math, especially for households already considering a move for work.
Nine states are cutting income taxes in 2026: Ohio, Indiana, Kentucky, Mississippi, North Carolina, Nebraska, Georgia, Oklahoma, Montana.
2026 tax-cut changes
| State | Change | Effective Date |
|---|---|---|
| Ohio | Flat 2.75% on nonbusiness income over $26,050 | 2026 |
| Indiana | Rate reduced to 2.95% | 2026 |
| Kentucky | Cut to 3.5% from 4% | 2026 |
| Mississippi | Decreasing to 4% with plans to reach 0% by 2030 | 2026 |
| North Carolina | Reduced to 3.99% | 2026 |
| Nebraska | Top rate cut to 4.55% (with a planned move to 3.99% later) | 2026 |
| Georgia | Reduced flat rate to 5.19% | 2026 |
| Oklahoma | Top rate reduced to 4.5% and fewer brackets | 2026 |
| Montana | Implementing cuts | 2026 |
Even when the dollar effect is modest at first, direction matters. For immigrants and professionals weighing multi-year career moves, a state’s rate path can matter as much as today’s rate.
Final perspective: policy design, not immigration treatment
California and New York can impose higher combined taxes than many other states, especially once local taxes enter the picture. That reflects how each state funds services and what voters have supported over time. It is not a special tax targeted at immigrants or visa holders.
The practical lesson is simple: location drives tax outcomes. “No income tax in 9 states” sounds like a universal win, but the full bill can include other taxes and higher costs elsewhere. Compare the whole bundle before making a move.
✅ For immigrants and professionals: evaluate state of residence not just for wages but for total tax burden and cost of living; consider potential 2026 tax cuts when planning relocation or remote-work arrangements
Tax information varies by state and personal circumstances; readers should consult a qualified tax professional for personalized guidance
This analysis explores how U.S. state tax structures significantly impact net income for a $120,000 salary. While California and New York feature high marginal rates and local taxes, nine states offer no wage income tax. However, these states often rely on alternative revenue streams like sales tax. Additionally, nine states plan tax cuts in 2026, influencing long-term financial planning for professionals and immigrants.
