California vs Arizona taxes in 2026
A married couple with $400,000 in wages pays $28,741 in California income tax and $9,583 in Arizona, a $19,158 difference in 2026. Property tax on the same $1,500,000 home runs $10,500 a year in California and $7,200 in Arizona.
State income tax for four households
Married filing jointly, 2026 brackets, deductions and credits.
| Household | California | Arizona | Saved each year |
|---|---|---|---|
| Dual-income couple$400,000 in wages | $28,741 | $9,583 | $19,158 |
| Executive household$1,000,000 in wages plus $150,000 in long-term gains | $106,619 | $27,395 | $79,224 |
| Retired couple$180,000 from IRAs and pensions, $80,000 of Social Security, $60,000 in gains | $13,861 | $5,208 | $8,653 |
| Year of a business sale$250,000 in wages plus a $3,000,000 long-term gain | $382,450 | $62,083 | $320,367 |
Property, retirement and estate tax
| 2026 | California | Arizona |
|---|---|---|
| Income tax rates | 1% to 13.3% | Flat 2.5% |
| Property tax on a $1,500,000 home | $10,500 | $7,200 |
| Average property tax rate | 0.70% | 0.48% |
| State sales tax | 7.25% | 5.6% |
| IRA and pension withdrawals | Taxed | 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.
- Arizona subtracts 25% of long-term gains on assets bought after 2011.
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
+$19,158 income tax, +$3,300 property tax
10-year difference
$225K
CA total
$39K
AZ total
$17K
| 2026 | California | Arizona |
|---|---|---|
| Income tax | $28,741 | $9,583 |
| Property tax | $10,500 | $7,200 |
| Total each year | $39,241 | $16,783 |
| Income tax as a share of income | 7.2% | 2.4% |
| Top income tax rate | 13.3% | 2.5% |
- California estate tax
- No estate or inheritance tax.
- Arizona 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 Arizona 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 Arizona driver's license and voter registration, a Arizona 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 Arizona?
In 2026, a married couple with $400,000 in wages pays $28,741 in California income tax and $9,583 in Arizona, a $19,158 difference. With $1,000,000 in wages plus $150,000 in long-term gains, the yearly gap is $79,224. In a year with a $3,000,000 business sale on top of $250,000 in wages, it's $320,367.
Does Arizona tax retirement income and Social Security?
Arizona taxes IRA and pension withdrawals at its flat 2.5% rate and doesn't tax Social Security. 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 $5,208 in Arizona, a $8,653 difference.
Is property tax higher in Arizona or California?
California's average effective property tax rate is 0.70% and Arizona's is 0.48%, so the same $1,500,000 home costs about $10,500 a year in California and $7,200 in Arizona. 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 Arizona have an estate tax?
Neither California nor Arizona 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.