Multi-state tax · California to Texas
If you are moving from California to Texas, taxes on your Texas pay are only federal, but California still taxes income you earned there.
A single filer earning $100,000 in Texas keeps about $6,355 a year that California would take in income tax and disability insurance. California keeps taxing pay for California workdays, part of your RSUs and options, and rent or gains on California real estate.
Updated · Sources
State tax on your pay, 2026
- 0%
- is Texas’s income tax rate. A 2019 amendment to its constitution bars a tax on individuals’ net incomes.
- 13.3%
- is California’s top rate: 12.3%, plus 1% on taxable income over $1 million.
- 1.3%
- of all wages is withheld for California State Disability Insurance (SDI), with no wage cap.
The $6,355 uses California’s 2025 brackets, the latest its Franchise Tax Board (FTB) has published.
Which equity awards carry California tax to Texas?
California taxes the share of each award you earned while working there, counted in workdays under the FTB’s method. Which workdays count depends on the type of award.
RSUs that vest after the move
For RSUs, California counts your workdays from grant to vest, or to your last day in the job if that comes first. It taxes the share of those days you worked in California. A vest that comes before your move date is California income in full.
NSOs you exercise after the move
For nonqualified options, California counts your workdays from grant to exercise, or to your last day in the job if that comes first. If 750 of those 1,100 workdays were in California, $204,545 of a $300,000 spread (the stock’s value over your exercise price) is California income. So an exercise years after the move can still be mostly California income.
ESPP shares you sell after the move
When you sell ESPP shares, the part taxed as pay is split by your California workdays from grant to purchase. The rest of the gain is taxed by the state you live in when you sell, and Texas does not tax it.
ISOs you exercise or sell after the move
A qualifying sale of ISO shares (one that meets the ISO holding periods) after the move is not taxed by California. In a disqualifying sale, the part taxed as pay is split by your California workdays from grant to exercise. If you exercise after the move and keep the shares, California’s alternative minimum tax can still reach the California share of the spread.
A year after the move, California can still tax $124,590 of a $200,000 RSU vest.
Had you stayed in California
$200,000
All $200,000 is California income.
Moved a year before the vest
$124,590
You worked 380 of the 610 workdays from grant to vest in California.
Granted after you moved
$0
Every workday from grant to vest falls in Texas.
The California share is $200,000 × 380 ÷ 610 = $124,590. California taxes it at the average rate on your whole year’s income, figured as if you lived there all year. You report it on a 2026 Form 540NR. Texas taxes none of the vest, and federal tax applies to all $200,000 either way. The counts assume you kept the same job and worked from Texas after the move.
Texas taxes none of the income that California taxes its residents on in 2026.
After your move date, you are in the Texas column for everything except income from California sources.
| California | Texas | |
|---|---|---|
| Wages and bonuses | Taxed Plus SDI on every dollar | Not taxed |
| Long-term capital gains | Taxed like wages | Not taxed |
| QSBS gain | Taxed in full No Section 1202 exclusion | Not taxed |
| Interest and dividends | Taxed Not on U.S. Treasury or California bond interest | Not taxed |
| IRA and pension payouts | Taxed | Not taxed |
| State income tax return | Yes Form 540, or Form 540NR for the year you move | None |
Why might you still file in California after the move?
Work trips back add California days
Each day you work in California after the move is a California workday. Its pay is California income, and it raises California’s share of RSUs not yet vested and options not yet exercised.
Selling California real estate after the move
When you sell California real estate after the move, 3.33% of the price is usually withheld for California. No withholding applies to a home that was last your main home, or to one that qualifies for the Section 121 home-sale exclusion. You must certify that on Form 593 before the sale closes. The exemption covers only withholding, so any taxable gain is still California income. Any amount withheld counts as a payment toward your tax on the 540NR.
A sale made as a resident stays California income
Moving does not change the source of a sale made while you lived in California. In an installment sale, the buyer pays the price over later years. If you sold stock that way before you left, the gain in each later payment is still California income. The interest on those payments is not.
California returns can continue for years
Each year a vest, an exercise or California rent brings California income, you may need another Form 540NR. The filing test counts your income from all sources, so even a small California share can require a return.
A CPA splits your income at your move date, so California taxes only its share.
Valim’s CPAs file California returns for people who moved to Texas, including the California share of their RSUs and options.
- We prepare your federal return and your move-year Form 540NR.
- We count California and Texas workdays for each RSU vest and option exercise, and report California’s share on your 540NR.
- We check your vesting and exercise dates against your planned move, while the date can still change.
- We work out the estimated payments for California tax on later vests.
- An FTB notice on a return we prepared, such as one about your move date, gets our reply within your fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
California to Texas tax questions.
Is it worth it to move from California to Texas?
On income tax alone, Texas costs less, because it has none. On a $100,000 salary, a single filer keeps about $6,355 more a year than in California. That is $5,055 of California income tax, at its 2025 brackets, and $1,300 of State Disability Insurance. Unlike Washington, Texas does not tax capital gains either.
Do I have to pay taxes in California if I live in Texas?
If you live in Texas, California taxes only your income from California sources. That covers pay for days you work in California and the California share of RSUs and options earned there. Rent and gains from California real estate count too. California does not tax gains on stock you sell as a Texas resident, except any part of an ESPP or ISO sale taxed as pay. Your IRA and qualified pension payouts are not California income either. Texas has no personal income tax, so no credit offsets the California tax.
How much is $100,000 salary in Texas after taxes?
A $100,000 salary in Texas leaves about $79,180 after taxes for a single filer in 2026 who takes the $16,100 standard deduction. Federal income tax takes $13,170, Social Security $6,200 and Medicare $1,450. Texas adds no income tax or payroll tax of its own. California still taxes your pay for any days you work there, as Massachusetts does after a move to New Hampshire. The figure leaves out 401(k) contributions and health premiums.
Will I be taxed if I move out of California?
Not for the move itself, because California has no exit tax. It taxes you as a resident on all income until your residency ends, then only on income from California sources. For the year you move to Texas, one Form 540NR covers both parts of the year. Texas has no income tax to credit, so the 540NR is the only state return you file.
Can I keep my California job and work remotely from Texas?
Yes, and California does not tax your pay for the days you work in Texas. California taxes pay by where you do the work, wherever your employer is. That sets it apart from New York, which can tax days you work from home for a New York office. Days you work in California, such as trips to the office, stay California workdays. Equity granted while you worked in California keeps a California share, taxed when it vests or you exercise it.
Will my business owe tax in Texas after the move?
Your business owes Texas franchise tax only if it is an LLC, corporation or other taxable entity with more than $2,650,000 of revenue. That threshold applies to reports due in 2026 and 2027. The tax falls on the business, so a sole proprietorship without an LLC owes none. Above the threshold, the rate is 0.75% of taxable margin, or 0.375% for retailers and wholesalers. At or below it, the business still files an information report by May 15.
Sources
- Texas H.J.R. 38 (2019), adding Tex. Const. art. VIII, § 24-a
- Cal. Rev. & Tax. Code § 17952, Intangible income of nonresidents
- Cal. Rev. & Tax. Code § 18152, Section 1202 does not apply
- California FTB, Publication 1100 (2025), Taxation of Nonresidents and Individuals Who Change Residency
- California FTB, Publication 1004 (revised 01/2015)
- California FTB, 2025 Form 540NR Tax Booklet
- California FTB, 2025 Instructions for Schedule CA (540), line 2 (interest)
- California FTB, 2026 Instructions for Form 593, Real Estate Withholding Statement
- California EDD, Contribution rates, withholding schedules, and meals and lodging values
- California Secretary of State, Proposition 40, text of proposed laws (2026)
- Texas Comptroller of Public Accounts, Franchise tax
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS, Publication 15 (2026), Employer’s Tax Guide
- 830 CMR 62.5A.1, Non-resident income tax (Massachusetts)
Reviewed and updated September 2026. General information, not advice for your situation.