California vs Florida: Taxes & Take-Home Pay 2026

Why retirees and remote workers compare California and Florida

Florida has no personal income tax, so it does not tax wages, pensions, IRA withdrawals, dividends or capital gains. California taxes all of those except Social Security, at rates up to 13.3%. That single difference drives most California-to-Florida moves, especially for people living on investment or retirement income, which California treats as ordinary income with no lower capital gains rate.

The sales tax trade-off favours Florida too: its average combined rate is 6.98% against 9.03% in California. The costs that usually narrow the gap in Florida are property tax on non-homestead property and homeowners insurance, which is not a tax and is outside this calculator.

Retirement income: the biggest difference

Neither state taxes Social Security benefits. Federal tax still applies the same way wherever you live: part of your benefits becomes taxable once half of your benefits plus your other income passes $25,000 (single) or $32,000 (joint), and up to 85% is taxable above $34,000 or $44,000.

Everything else in a typical retirement differs. California taxes pension, annuity, 401(k) and IRA income at its regular rates and has no general retirement exclusion. Florida taxes none of it. A Roth conversion, a large IRA withdrawal or the sale of an appreciated stock portfolio can cost tens of thousands in California tax that would be zero after a genuine move to Florida.

Property tax: Prop 13 vs Save Our Homes

Both states cap how fast a homeowner’s assessment can rise, but in different ways.

• California: the general levy is limited to 1% of assessed value, and assessed value is normally the purchase price increased by at most 2% a year. Selling resets the assessment to market value.
• Florida: a homestead exemption reduces taxable value by up to about $50,000. The first $25,000 applies to all levies, including school taxes; a second exemption of up to $25,000, indexed to inflation, applies to assessed value above $50,000 for non-school levies only. After the first year, the Save Our Homes limit holds annual assessment increases to 3% or the change in CPI, whichever is less.
• Florida lets you carry (“port”) all or part of an accumulated Save Our Homes benefit to a new Florida homestead. The homestead application (Form DR-501) and any portability form (DR-501T) are due to the county property appraiser by March 1, and you must own and live in the home as your permanent residence by January 1 of that tax year.
• Second homes and rentals get neither the homestead exemption nor the Save Our Homes cap in Florida, so a part-time Florida residence can carry a much higher effective rate than a primary home.

Becoming a Florida resident for California tax purposes

California keeps taxing you as a resident while you are domiciled there, or present for more than a temporary or transitory purpose, so owning a Florida condo is not enough. Common steps are filing a Florida Declaration of Domicile, claiming the Florida homestead exemption, moving your driver’s license, voter and vehicle registration, and spending most of your time in Florida.

In the move year you file California Form 540NR. Income received while a California resident is taxable there; income after the move is taxable only if it is California-source, such as rent from a California property you kept or wages for days worked in California. Federal law (4 U.S.C. § 114) stops California from taxing pension, 401(k) or IRA distributions you receive after you are no longer a California resident or domiciliary.

Working from Florida for a California employer

If you live in Florida and do the work there, California has no claim on the wages and no SDI should be withheld (SDI is 1.3% with no cap, so at $150,000 it is $1,950 a year). Make sure HR updates your work location, because payroll systems default to the office address. Trips to the California office create California-source workdays for the days you are there.