Nine states take nothing from your retirement income. For a Californian or New Yorker heading into the RMD and conversion years, the state’s cut is one of the few taxes you can legally reduce to zero — if the move is real and the order is right.
Alaska · Florida · Nevada · New Hampshire · South Dakota · Tennessee · Texas · Washington · Wyoming. No tax on wages, no tax on IRA withdrawals, no tax on Roth conversions, no tax on pensions.
Two footnotes worth knowing: Washington levies an excise tax on large capital gains, so sellers of appreciated assets should look closer; and New Hampshire’s old tax on interest and dividends has been repealed, making it fully income-tax-free. State law moves — confirm the current rules of any state on your shortlist.
Now the other side of the ledger: California’s top rate reaches 13.3%, and it taxes IRA withdrawals and Roth conversions as ordinary income. New York’s top rate runs to 10.9% before New York City adds its own layer. Every dollar your retirement accounts force out — and every dollar you convert — carries that state’s rate for as long as you live there.
Here’s the part that turns relocation from a lifestyle choice into a tax strategy: the order of operations.
The years between retirement and required withdrawals are when the big taxable events happen on purpose — Roth conversions sized to fill brackets, and then two decades of RMDs after that. Run those events as a California resident and the state taxes every dollar at ordinary rates. Run the same events after establishing residency in Texas or Florida, and the state’s share of a six-figure conversion — potentially tens of thousands of dollars per year of converting — simply never exists. Multiply across a conversion window and an RMD lifetime, and the relocation can be worth more than most portfolio decisions.
And a piece of federal law does real work here: 4 U.S.C. § 114 bars a state from taxing the retirement-plan income of someone who is no longer its resident — even though the money was earned and deferred there. California cannot follow your IRA to Florida. What it can do is argue you never really left. Which brings us to the part everyone underestimates.
The order in one line: establish the new residency first, convert and withdraw second. Reversing those two steps is the difference between a zero and a five-figure state tax bill per conversion year.
High-tax states do not wave goodbye to high earners. California and New York audit departing residents aggressively, and the burden of proving you left falls on you.
Domicile is demonstrated by where your life actually happens:
This is the paragraph to take seriously: residency rules are state-specific, fact-intensive, and the stakes compound across every conversion and withdrawal year that follows. Before you rely on a move for tax purposes, engage a qualified tax professional on the residency requirements of both states — the one you’re leaving and the one you’re joining. The planning conversation and the residency execution are two different jobs, and the second one is not mine.
Whether the numbers justify it is knowable in advance: your conversion plans, your RMD trajectory, your state’s rates against the destination’s full cost picture. That’s a calculation, not a guess — run yours before the moving trucks enter the conversation.
Nine states levy no tax on wages or retirement income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Two footnotes: Washington imposes an excise tax on large capital gains, and New Hampshire’s former tax on interest and dividends has been repealed. Rules change — verify the current law of any state you’re considering.
Generally no — federal law (4 U.S.C. § 114) bars states from taxing the retirement-plan income of people who are no longer residents, even if the money was earned there. The battleground isn’t the pension law; it’s whether you actually stopped being a resident. That’s why residency has to be established properly, and why high-tax states audit it.
Enormously. A Roth conversion executed while you’re still a California or New York resident is state-taxable income in that state; the same conversion executed after residency is established in a no-income-tax state carries no state tax at all. Sequencing the move before the conversion years and the RMD years is most of the strategy.
Domicile is demonstrated, not declared: where you spend your days (the 183-day tests matter), your home, driver’s license, voter and vehicle registration, physicians, and where your life actually happens. High-tax states audit departing high earners aggressively. The specific requirements vary by state — engage a qualified tax professional on residency before you rely on the move.
Your brackets, your conversion window, your RMD trajectory — free, in about 3 minutes. The state question gets much clearer once the federal picture is on the table.
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