Texas Income Migration: Who's Moving In and What They Earn

Texas is not just gaining people. It is gaining money. IRS migration data covering the most recent filing periods show Texas ranks among the top two states in the country for net adjusted gross income (AGI) gained through interstate migration, trailing only Florida in raw dollar terms.

The Income Numbers Behind the Headlines

The IRS publishes year-over-year address change data from individual tax returns, and those numbers are the cleanest measure of who actually moved, not just who told a surveyor they planned to. Between the 2021 and 2023 filing periods (the most recent cycles with complete data, as of late 2025), Texas recorded a net AGI gain exceeding $10 billion from interstate migration alone. That means the people arriving in Texas earned substantially more, on average, than the people leaving.

The average AGI of an in-migrant to Texas runs roughly 15 to 20 percent higher than the average AGI of someone leaving. That gap matters because it reflects a self-selection effect: higher earners have the most to gain from moving to a state with no personal income tax, and they are acting on it.

Where Migrants Are Coming From

California sends more high-income migrants to Texas than any other state. That has been true for several years, and the pattern held through 2026. New York and Illinois rank second and third, respectively. All three states impose top marginal income tax rates above 9 percent on high earners. California's top rate sits at 13.3 percent. New York's combined state and city rate for New York City residents reaches over 14 percent when local taxes are included.

A household earning $500,000 per year moving from California to Texas eliminates a six-figure annual tax bill. That is not a marginal consideration. It is a structural financial decision, and the IRS data confirm that people are making it at scale.

Illinois deserves specific attention. Despite a flat income tax structure, Illinois has pushed residents out through a combination of high property taxes (the state's effective rate is among the highest in the nation at approximately 2.27 percent as of late 2025) and persistent fiscal instability. Texas property taxes are not low, but Texans pay no state income tax, and that trade-off appeals to earners in the upper-middle and high-income brackets.

For a direct comparison of what you actually keep after taxes in Texas versus New York, see our breakdown at Texas vs. New York: What You Actually Keep.

Are People Also Leaving Texas?

Yes, and that part of the story gets undercovered. Texas has meaningful out-migration, primarily to Florida, Tennessee, and Georgia. The people leaving Texas tend to be lower-income households and retirees seeking lower property tax burdens or warmer coastal climates. Florida, in particular, competes directly with Texas for high-income migrants, and it wins some of them.

But the net figure is what determines a state's fiscal trajectory, and Texas remains solidly positive. The state added population every year through 2025, and early 2026 estimates from the Census Bureau place Texas on track to surpass 32 million residents before 2027. The incoming migrants, especially from high-tax coastal states, bring incomes that support local spending without burdening the state income tax base, because there is no income tax to burden.

Retirees represent a meaningful subset of in-migrants. Texas does not tax Social Security income, which matters to that group. If you are evaluating Texas as a retirement destination, our post on states that don't tax Social Security gives the full picture across competing states.

What This Means for Texas Going Forward

The influx of high earners creates a compounding effect. More high-income residents means more sales tax revenue (Texas depends heavily on sales tax), more property transfer activity, and more business formation. Texas added over 400,000 net new jobs in 2025 according to state labor department data, and the incoming workforce skews toward professional and technical occupations.

The risk is on the cost side. Home prices in Austin, Dallas, and Houston have climbed significantly over the past four years, partially offsetting the income tax savings that attracted migrants in the first place. Property taxes in Travis County (Austin) run close to 2.1 percent effective rates, which erodes the financial advantage for homeowners with high assessed values.

To model your own tax savings from a potential move to Texas, use our state tax calculator.

Key Takeaways

• Texas ranks in the top two nationally for net AGI gained through interstate migration, with a net gain exceeding $10 billion across the most recent complete IRS filing cycles.
• In-migrants to Texas earn 15 to 20 percent more on average than out-migrants, confirming a high-income selection effect driven by the state's zero personal income tax.
• California, New York, and Illinois are the three largest source states, all with top marginal income tax rates above 9 percent compared to Texas's zero.

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