Can You Move to Florida or Texas to Avoid Tax on Your Stock?

The short version

Moving to Florida, Texas or another state with no income tax can cut your state tax on stock, but usually by less than people expect. It comes down to one question for each dollar: is it pay, or is it investment gain?

• Pay from equity (RSUs vesting, the "spread" when you exercise NSOs, and ISO shares sold too early) is treated like salary. States like California, New York and Massachusetts keep taxing the part you earned while working there, even after you move away. They split it by workdays.
• Investment gain (the growth in value after your shares vest or after you exercise) is generally taxed only by the state you live in on the day you sell.

So a move mostly helps with growth after vesting. It does little for RSUs that were mostly earned before you left.

Why "I'll just move to Florida" usually falls short

The myth goes like this: "The tax is due when the stock pays out, so if I live in Florida on IPO day, I owe no state tax." That's true for a salary you earn after moving. It's not true for equity you earned before moving, because states tax that income based on where you did the work, not where you live when you're paid.

Think of your RSUs as a paycheck earned over the whole time between the grant and the vest. If you did three-quarters of that work in California, California treats three-quarters of the paycheck as Californian, even if it lands in your account after you've moved to Austin.

How the workday split works

States like California and New York use a simple ratio:

Share taxed by your old state = workdays you worked in that state during the period ÷ all workdays in the period

What "the period" means depends on the type of equity:

"Workdays" means days you actually worked, not calendar days. Weekends, holidays and vacation don't count.

Example: RSUs granted in California, IPO after moving to Texas

• January 2022: you get an RSU grant while living and working in San Francisco.
• January 2025: you move to Austin and keep working remotely for the same company.
• 2026: the company goes public, and $400,000 of RSUs vest and settle.

About 3 of the 4 years between grant and vest were worked in California, so California taxes about 75%, or $300,000, as California income. Texas has no income tax, so the other $100,000 escapes state tax.

There's a second surprise: California figures your tax rate as if all your income were Californian, then applies that rate to the California share. A large IPO year can push that rate toward the top brackets (up to 13.3%), so the $300,000 could cost roughly $30,000 to $40,000 in California tax, depending on your other income.

Now say you hold the shares and sell them in 2027 for $600,000. The $200,000 of growth after vesting is investment gain, and you live in Texas when you sell, so no state taxes it. That's where the move really pays off.

Common situations that trip people up

You moved after the grant but before the IPO

This is the example above. The pay part is split by workdays. Only growth after vest is fully free of your old state's tax.

You moved after the RSUs vested, then sold

The RSU income was taxed at vest (split by workdays if you had already moved). The growth between vest and sale goes to your new state. If you moved before selling, that growth is generally free of your old state's tax.

Your RSUs are "double-trigger" and vested at the IPO

Many private companies' RSUs only pay out when both a time schedule is met and there's an IPO or sale. States don't all say clearly whether the workday period ends at the time-based vest or at the IPO. If you moved after your time-based vesting finished, ask how your old state treats the period. It can change the split a lot.

You exercised options before moving

For NSOs, the spread at exercise is pay, split by workdays through the exercise (California) or vest (New York). For ISOs held long enough, the gain is investment gain taxed where you live when you sell. But note that California residents can owe California AMT on the ISO spread in the year they exercise, before they move.

You made an 83(b) election or exercised early

With an 83(b) election you pay tax on the stock's value when you get it, usually very little. All later growth is investment gain, taxed by the state you live in when you sell. This is one of the few setups where a real move before a sale can save state tax on almost the whole gain.

Your company is acquired and pays you over time

Cash for RSUs in an acquisition is still pay, split by workdays. Cash for shares you own is investment gain taxed where you live when the deal closes. Watch out for escrow and earn-out payments that arrive later: California generally keeps taxing installment payments from a sale made while you lived there, even after you move.

You work remotely in a no-tax state for a New York company

New York has a "convenience of the employer" rule. If you work from home in another state for your own convenience, rather than because your employer requires it, New York can count those days as New York workdays. That can pull more of your RSU income back into New York. A few other states have similar rules.

You moved to Washington State

Washington has no tax on wages, but it does tax large long-term capital gains (7% above an annual threshold of roughly $270,000, plus an extra 2.9% on gains over $1 million starting in 2025). Selling a big block of long-held stock after moving there is not tax-free.

Two states tax the same income

If you live in one state and another taxes part of your income, your home state usually gives a credit for the other state's tax, so you aren't fully taxed twice. States with no income tax, like Florida and Texas, have nothing to credit, so you simply pay the old state on its share.

Moving has to be real

States with high taxes audit people who leave, especially around a big payout. Changing your driver's license or voter registration isn't enough. California looks at where you have your closest connections, and New York looks at your domicile: where your home is, where your family lives, where you spend your time, where your "near and dear" belongings are, and where you do business.

Things that raise red flags:

• Moving a few weeks before an IPO or sale
• Keeping your old home, or spending lots of time back in your old state
• Children still in school in your old state
• Doctors, gym, clubs and bank still in your old state
• Staying in New York for more than 183 days while keeping a place to live there, which can make you a New York statutory resident even if you "live" elsewhere

The year you move, you'll usually file a part-year resident return in both your old and new states.

Trust tricks don't work anymore in some states

Some people try to shift stock into special trusts in no-tax states before selling. New York (since 2014) and California (since 2023) treat the most common version of these trusts, called incomplete-gift non-grantor trusts, as if you still own the stock, so the gain stays taxable to you.

What to do before you move

1. Count your workdays in each state from each grant to each vest. Keep a calendar, travel records and badge-in data.
2. Check your pay stubs and W-2. Your employer should split RSU income and withholding between states. Mistakes are common after a move.
3. Keep proof of the move: lease or deed, utility bills, a new doctor, school records and a dated moving invoice.
4. Plan the timing of sales. Growth after vest, sold after a real move, is where the savings are.
5. Set aside tax for your old state. Your employer may not withhold enough for the share your old state still claims, so you may need to make estimated payments there.

Model it with your numbers

In the calculator, set the state you live in now, then use Former state in About you to enter the state you left and the share of your equity earned there. The results show what each state taxes. The State Move calculator compares staying with moving. For the basics of workday sourcing, see Moving States Before an IPO.

General information, not tax advice. Rules differ by state and change over time, and residency depends on your full set of facts.