California vs New York: Taxes & Take-Home Pay 2026

California vs New York: the two high-tax coasts

California and New York both tax high earners heavily, but in different places. California’s state income tax (top rate 13.3%) is higher than New York State’s at most incomes, yet New York City adds its own resident income tax of 3.078% to 3.876%. The real comparison is usually San Francisco or Los Angeles against Manhattan or Brooklyn, not state against state.

California also has the costlier payroll program: its SDI has no wage cap, while New York’s disability and family leave deductions are capped at small annual amounts.

Worked example: $175,000 in San Francisco vs New York City

Single filer, standard deduction. The third column shows New York State outside the city (no local income tax), for anyone weighing Westchester, Long Island or upstate.

• SDI costs $2,275 in San Francisco; New York’s capped disability and Paid Family Leave deductions total $443.
• New York’s high-income recapture, which phases out the benefit of the lower brackets above $107,650 of NY AGI, is not in these figures, so the New York columns understate state tax somewhat.
• Sales tax: 8.625% in San Francisco, 10.25% in Los Angeles, 8.875% in New York City.

Residency rules: easy to be taxed by both

Each state has its own test, and meeting both in one year happens more often than people expect.

• California treats you as a resident if you are in the state for more than a temporary or transitory purpose, or are domiciled there and away only temporarily.
• New York treats you as a resident if New York is your domicile, or if you keep a permanent place of abode there and spend 184 days or more in the state (a “statutory resident”).
• A Californian who keeps an apartment in Manhattan and spends 184 days in New York can be a New York statutory resident while California still claims domicile. Each state limits its credit for tax paid to the other, so in a dual-residency year some income can end up taxed by both.

Remote work and the New York convenience rule

If you move to California but keep a job whose primary office is in New York, New York counts your telecommuting days as New York workdays unless your employer has established a bona fide employer office at your home. California, as your home state, also taxes all of your income. The overlap can mean paying New York nonresident tax on wages earned at a desk in Oakland.

Going the other way is simpler: California sources wages to where the work is physically done, so a New Yorker working remotely for a California company owes California tax only for days actually worked in California.

Retirement income and property tax

Both states exempt Social Security. New York is kinder to pensions: New York State, local and federal government pensions are fully excluded, and anyone 59½ or older can exclude up to $20,000 of other qualified pension and annuity income. California taxes all of it at regular rates. Property taxes differ in structure: California’s Proposition 13 caps the general levy at 1% of an assessed value that rises at most 2% a year, while New York bills are set locally, with the STAR program giving eligible homeowners a school tax credit.