Millions of Americans Are Fleeing High-Tax States Like California and New York: Here’s Where They’re Moving and How Much They’re Saving in 2026

New IRS migration data shows billions in income shifting from high-tax states to lower-tax destinations. Here’s what’s driving the trend and what it means for your finances. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. 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Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.But taxes are only part of a broader shift shaped by housing costs, remote work, and changing lifestyle priorities. Here’s what the latest data shows and how to think about it if you’re considering a move.High-tax states continue to see significant outflows of both residents and income, according to the most recent IRS Statistics of Income migration data.Note: These figures are based on the most recent IRS data, reflecting tax returns filed in 2023 for the 2022 tax year. While multi-year analyses may show larger cumulative losses, the amounts listed reflect the latest single-year net migration of AGI.Much of that lost income is tied to higher-earning households. In Massachusetts, for example, about 70% of outbound AGI came from households earning over $200,000, according to analysis from conservative-leaning think tank, the Pioneer Institute.These departures matter for state budgets. When higher earners leave, they take a disproportionate share of tax revenue, creating fiscal pressure even if overall population changes are modest.Yet not all analysts agree on the cause. Research from the nonprofit, nonpartisan Massachusetts Budget and Policy Center (MassBudget) suggests that affordability — not taxes alone — is the primary driver.Their analysis notes that many people leaving actually earn below the Commonwealth’s top tax brackets.Income from those leaving high-tax states is showing up elsewhere, primarily in lower-tax, lower-cost regions. Top destinations include:Several of these states have no state income tax, including Florida, Texas, and Tennessee. Others offer relatively low flat tax rates and more affordable housing markets.For many households, the financial difference can be significant. A move from a high-tax, high-cost state to a lower-cost region can reduce both tax liability and housing expenses — sometimes by tens of thousands of dollars per year.For higher-income households, tax differences between states can be particularly significant.A $250,000 household could save roughly $15,000 to $30,000 annually by moving from a high-tax state to one with no income tax. Meanwhile, those earning $500,000 or more might see savings exceed $40,000.Still, taxes are only part of the picture.Housing affordability, lifestyle preferences, and family considerations often play an equal role, or, in some cases, a greater role, in relocation decisions.MassBudget notes that most people leaving high-tax states earn under $200,000 and that overall affordability is a stronger driver than surtaxes. The organization wrote the following in its recent analysis of IRS migration data:"The data show that the households leaving the state are least likely to be subject to the surtax. That tells us something important: the lack of affordability of housing, education, transportation, childcare, and utilities, for example, are the real challenges we need to address."Nationally, remote work seems to add to those financial incentives for some.Those households that can move to lower-cost areas without changing jobs sometimes turn relocation into a viable strategy for saving money and improving their lifestyle at the same time.The movement of households from high-tax, high-cost states to lower-tax regions appears to be a lasting trend, not a short-term spike.As the Census Bureau has noted:"The share of the workforce working from home… remains more than double what it was before COVID-19."At the same time, high housing costs and overall cost-of-living pressures are encouraging families to consider more affordable regions. Lifestyle factors like proximity to family or a milder climate also influence decisions.Taken together, these patterns suggest that migration driven by financial, professional, and personal considerations is likely to continue through 2026 and beyond.Even though relocating for financial or lifestyle reasons can make sense, the decision is more complex than simply comparing tax rates. Here are some factors to consider before you pack your bags.1.

State Tax Landscape2. Housing Costs3. Additional Expenses4.

Tax Residency RulesRelocating generally requires a holistic view of taxes, housing, lifestyle, and legal obligations. But comparing headline tax rates is only the start.Understanding the total cost of living, work flexibility, and residency rules can help you make sure your move delivers real financial benefits.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Kelley R. Taylor is the senior tax editor at Kiplinger.com, where she breaks down federal and state tax rules and news to help readers navigate their finances with confidence. A corporate attorney and business journalist with more than 20 years of experience, Kelley has helped taxpayers make sense of shifting U.S. tax law and policy from the Affordable Care Act (ACA) and the Tax Cuts and Jobs Act (TCJA), to SECURE 2.0, the Inflation Reduction Act, and most recently, the 2025 “Big, Beautiful Bill.” She has covered issues ranging from partnerships, carried interest, compensation and benefits, and tax‑exempt organizations to RMDs, capital gains taxes, and energy tax credits. Her award‑winning work has been featured in numerous national and specialty publications.