Best States for Remote Workers in 2026
With 28% of U.S. workers now fully or partially remote, the choice of state of residence has become a powerful tax planning lever. We ranked all 50 states using four weighted factors: after-tax income, cost of living, broadband coverage, and remote-worker friendliness (including the new OBBBA tip and overtime deductions).
Methodology: The Remote Worker Index
Our 2026 Remote Worker Index scores each state on a 0-100 scale using four weighted factors. After-tax income for a $100,000 single filer (40% weight) is calculated using our paycheck calculator logic — federal income tax, FICA, and state income tax all included. Cost of living index from the Council for Community and Economic Research (30% weight) measures how far that after-tax income goes. Broadband coverage (20% weight) from the FCC measures the percentage of households with access to 100 Mbps+ internet, essential for video calls and file uploads. Remote-worker friendliness (10% weight) reflects state policies like no convenience-of-the-rule taxation and the OBBBA tip and overtime deductions for tipped and hourly workers.
Top 10 Best States for Remote Workers in 2026
Texas ranks first in our 2026 index, combining zero state income tax with a moderate cost of living and good broadband coverage in major metros. Florida follows at second — no state income tax, warm weather, and a growing tech corridor. Tennessee, Nevada, Wyoming, Washington, South Dakota, New Hampshire, and North Carolina round out the top 10. Several of these states have no state individual income tax at all (Texas, Florida, Tennessee, Nevada, Wyoming, Washington, South Dakota). New Hampshire makes the list despite taxing dividend and interest income because wages are exempt and the state has excellent broadband. North Carolina rounds out the top 10 with a flat 4.5% income tax and a strong research-triangle tech corridor.
Bottom 10 States for Remote Workers in 2026
The bottom 10 states for remote workers are concentrated in the Northeast and West Coast, where high taxes combine with high costs of living. California ranks 50th in our index — although it has world-class broadband in major metros, the top marginal state income tax rate of 13.3% and a cost of living 50% above the national average wipe out the benefit. New York (49th), Hawaii (48th), Connecticut (47th), Vermont (46th), New Jersey (45th), Maine (44th), Rhode Island (43rd), Oregon (42nd), and Illinois (41st) round out the bottom 10. The OBBBA SALT cap increase helps itemizers in these states on the federal side, but the underlying state tax burden remains the heaviest in the nation.
How OBBBA Tip and Overtime Deductions Affect the Rankings
The One Big Beautiful Bill Act introduced two new above-the-line deductions for the 2026 tax year: a tip income deduction for qualifying tipped occupations and an overtime pay deduction for qualifying overtime pay. While these deductions are temporary (scheduled to sunset in future years), they meaningfully affect remote workers in traditionally tipped occupations (food delivery, hospitality support) and remote hourly workers who log overtime. For these workers, a state with no income tax becomes even more attractive because the federal deduction is taken against federal tax, but state tax still applies unless the state has no income tax. TheTaxCalc's OBBBA tax calculator shows the exact federal savings.
Considerations Beyond Taxes
Taxes are the largest single factor for most remote workers, but they are not the only one. Several states (including New York, Pennsylvania, Delaware, Nebraska, Arkansas, and Connecticut) apply convenience-of-the-employer rules, which means a remote worker whose employer is in New York but who lives in Texas can still owe New York state income tax on that wage income. We penalize these states in our remote-worker friendliness sub-score. Additionally, some states have begun taxing remote workers based on the number of days worked in the state (the so-called "digital nomad" tax issue). Workers who regularly cross state lines should consult a tax professional about multi-state filing obligations.
Datasets Used in This Study
Each dataset below is the underlying data table or source for this study. All datasets are licensed under Creative Commons Attribution 4.0 (CC BY 4.0) and are free to reuse with attribution to TheTaxCalc.
2026 Remote Worker Index Scores — All 50 States
Composite 0-100 score and four sub-scores (after-tax income, cost of living, broadband, friendliness) for each state.
Creator: TheTaxCalc · License: CC BY 4.0
2026 State Broadband Coverage at 100 Mbps+
Percentage of households with access to fixed terrestrial broadband at 100 Mbps download and 20 Mbps upload or faster, by state.
Creator: TheTaxCalc, sourced from FCC Broadband Deployment Report · License: CC BY 4.0
2026 State Cost of Living Index
Composite cost of living index (U.S. average = 100) covering housing, groceries, utilities, transportation, and healthcare, by state.
Creator: TheTaxCalc, sourced from C2ER · License: CC BY 4.0
Frequently Asked Questions
Which state is best for remote workers in 2026?
Texas ranks first in our 2026 Remote Worker Index, combining zero state income tax with a moderate cost of living, strong broadband in major metros, and no convenience-of-the-employer rule. A remote worker earning $100,000 in Texas takes home roughly $7,800 more per year than the same worker in California, before accounting for cost of living differences. Florida, Tennessee, Nevada, and Wyoming round out the top 5.
How does OBBBA affect remote workers?
OBBBA helps remote workers in three ways. First, the TCJA brackets were made permanent, preventing a reversion to higher federal rates. Second, the SALT cap increase from $10,000 to $40,400 benefits remote workers who itemize in high-tax states. Third, the new tip and overtime deductions help remote workers in traditionally tipped occupations or who log regular overtime. Use our OBBBA tax calculator to see your specific savings.
What is the convenience-of-the-employer rule?
The convenience-of-the-employer rule is a tax rule in several states (New York, Pennsylvania, Delaware, Nebraska, Arkansas, Connecticut) that taxes a remote worker based on the location of the employer, not the location of the worker. If you live in Texas but work remotely for a New York employer, New York can require you to pay state income tax on that wage income — even though you never set foot in New York. We penalize states with this rule in our Remote Worker Index.
Do remote workers have to pay taxes in multiple states?
It depends. If you work remotely from a single state for an employer in another state, you may owe tax in both states — your home state on all income, and the employer's state if it applies the convenience-of-the-employer rule. If you travel between states for work, you may owe tax in each state where you performed work, prorated by days worked. Most states offer a credit for tax paid to other states, but the rules vary. Consult a tax professional for your specific situation.
How is the Remote Worker Index calculated?
We score each state on a 0-100 scale using four weighted factors: after-tax income for a $100,000 single filer (40% weight), cost of living index (30% weight), broadband coverage at 100 Mbps+ (20% weight), and remote-worker friendliness including no convenience-of-the-employer rule and OBBBA deductions (10% weight). The scoring methodology is published in full in the study appendix.
Should I move to a no-income-tax state as a remote worker?
For many remote workers, the answer is yes — the tax savings can fully offset relocation costs within 12 to 18 months. But consider three things first: (1) cost of living differences may reduce or eliminate the savings in some no-income-tax states, (2) some states like Texas make up revenue through higher property and sales taxes, and (3) if your employer applies the convenience-of-the-employer rule, moving may not reduce your tax bill. Use our paycheck calculator to compare take-home pay across states before deciding.
Sources & Methodology
This study uses official government data, including IRS publications (Rev. Proc. 2025-25, Pub. 15-T, Pub. 972), Social Security Administration data, U.S. Census Bureau American Community Survey, the FCC Broadband Deployment Report, and each state’s Department of Revenue. Tax law changes from the One Big Beautiful Bill Act (P.L. 119-1) are incorporated throughout. For full calculation details, see our methodology page.
Last updated: January 15, 2026. This study is reviewed annually and updated whenever material new data is published by the IRS or other official sources.