California vs Tennessee taxes in 2026
A married couple with $400,000 in wages pays $28,741 in California income tax and $0 in Tennessee in 2026. Property tax on the same $1,500,000 home runs $10,500 a year in California and $7,800 in Tennessee.
State income tax for four households
Married filing jointly, 2026 brackets, deductions and credits.
| Household | California | Tennessee | Saved each year |
|---|---|---|---|
| Dual-income couple$400,000 in wages | $28,741 | $0 | $28,741 |
| Executive household$1,000,000 in wages plus $150,000 in long-term gains | $106,619 | $0 | $106,619 |
| Retired couple$180,000 from IRAs and pensions, $80,000 of Social Security, $60,000 in gains | $13,861 | $0 | $13,861 |
| Year of a business sale$250,000 in wages plus a $3,000,000 long-term gain | $382,450 | $0 | $382,450 |
Property, retirement and estate tax
| 2026 | California | Tennessee |
|---|---|---|
| Income tax rates | 1% to 13.3% | None |
| Property tax on a $1,500,000 home | $10,500 | $7,800 |
| Average property tax rate | 0.70% | 0.52% |
| State sales tax | 7.25% | 7% |
| IRA and pension withdrawals | Taxed | Not taxed |
| Social Security | Not taxed | Not taxed |
| Estate or inheritance tax | No estate or inheritance tax. | No estate or inheritance tax. |
- The Tax Foundation table uses 2025 bracket widths for California because the 2026 figures weren't out yet.
Run your own numbers
Starts with the dual-income couple above. Change the income mix and home values to match yours.
Your move
You save each year
+$28,741 income tax, +$2,700 property tax
10-year difference
$314K
CA total
$39K
TN total
$8K
| 2026 | California | Tennessee |
|---|---|---|
| Income tax | $28,741 | $0 |
| Property tax | $10,500 | $7,800 |
| Total each year | $39,241 | $7,800 |
| Income tax as a share of income | 7.2% | 0.0% |
| Top income tax rate | 13.3% | None |
- California estate tax
- No estate or inheritance tax.
- Tennessee estate tax
- No estate or inheritance tax.
- The Tax Foundation table uses 2025 bracket widths for California because the 2026 figures weren't out yet.
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Before you leave California
- The state you live in on the day you sell stock or a business interest generally taxes the gain. Selling after you've become a Tennessee resident can keep a large gain out of California's reach. Selling the week before the move can't.
- Real estate is taxed where it sits. Selling a California rental or second home after you move still owes California tax on the gain.
- California can still tax income you earned there, such as pay for work done in the state and stock options that vested while you lived there. Federal law bars it from taxing your IRA, 401(k) and pension payments once you've moved.
- Make the move stick: a Tennessee driver's license and voter registration, a Tennessee home you actually live in, and most of your days spent there. California audits residency changes closely, so keep records of where you spend your time.
Questions
How much state income tax do you save moving from California to Tennessee?
In 2026, a married couple with $400,000 in wages pays $28,741 in California income tax and $0 in Tennessee. With $1,000,000 in wages plus $150,000 in long-term gains, the yearly gap is $106,619. In a year with a $3,000,000 business sale on top of $250,000 in wages, it's $382,450.
Does Tennessee tax retirement income and Social Security?
Tennessee has no income tax, so IRA withdrawals, pensions and Social Security aren't taxed. California taxes IRA and pension withdrawals as regular income and doesn't tax Social Security. A retired couple with $180,000 from IRAs and pensions, $80,000 of Social Security, $60,000 in gains pays $13,861 in California income tax and $0 in Tennessee.
Is property tax higher in Tennessee or California?
California's average effective property tax rate is 0.70% and Tennessee's is 0.52%, so the same $1,500,000 home costs about $10,500 a year in California and $7,800 in Tennessee. California's average is held down by Prop 13, and a home bought today is assessed at its purchase price, so a new California purchase pays more than the average.
Does California or Tennessee have an estate tax?
Neither California nor Tennessee has a state estate or inheritance tax. Only the federal estate tax applies, with a 2026 exemption of $15 million per person.
Figures use the Tax Foundation's 2026 state brackets and average effective property tax rates. They exclude federal tax and local income taxes. Results are estimates for informational purposes only. Consult a licensed financial professional before making financial decisions.