This is general information, not financial advice. Costs vary widely by family and location — check local figures before making a decision.

A common piece of money wisdom is that families can stretch their budgets by moving to a state with no income tax. For households with young children, a Kiplinger analysis argues that advice is incomplete: once you add childcare, the cheapest tax states aren't always the cheapest places to raise a family.

The two numbers that don't always line up

Nine states levy no broad-based individual income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. For a middle-class household, dropping a state income tax can save anywhere from a few hundred to several thousand dollars a year. That's the draw.

But tax burden — the share of income residents actually pay across income, sales and property taxes combined — is only half the family ledger. By the Tax Foundation's measure, Alaska carries the lightest overall burden, while New York's is the heaviest. Childcare costs follow a different map entirely, and for families they can be the bigger line item.

How big childcare has become

Child Care Aware of America put the national average price of center-based care at about $13,184 in 2025, in its annual price report. Infant care runs higher still — roughly $15,000 or more a year nationally. For a married couple, that's around 10% of median household income; for a single parent, closer to 35%. Both exceed the 7% of income that the U.S. Department of Health and Human Services uses as its benchmark for "affordable" care.

The scale rivals a family's other big bills. Child Care Aware found that center-based care for two children costs more than the typical mortgage in 45 states, and more than median rent in every state it studied. Childcare prices also rose faster than overall inflation in recent years — and the supply of licensed centers has been shrinking, which keeps prices firm and, in rural areas, limits options altogether.

Why the rankings diverge

Layer childcare onto tax burden and the picture shifts. A no-income-tax state can still be expensive for families if local childcare runs well above the national average — and several large, fast-growing, low-tax states have exactly that combination in their major metros. Meanwhile, a state with a modestly higher tax burden but cheaper, more plentiful childcare can leave a family with more money at the end of the month. The point of the exercise isn't a single winner; it's that the headline tax rate can mislead a family that hasn't priced its actual costs.

Practical takeaways

For households weighing a move, a few steps help avoid sticker shock:

  • Price local childcare before the house. State averages hide big gaps between rural counties and city centers — call providers directly for real quotes.
  • Look at the whole tax picture. States with no income tax often lean on higher sales or property taxes; compare the combined burden, not just the headline rate.
  • Check subsidy eligibility. Many states run childcare-assistance programs that can sharply cut out-of-pocket costs below certain income thresholds, and the rules differ widely.
  • Use a dependent-care FSA. Federally, families can set aside up to $5,000 pre-tax through an employer flexible spending account, trimming childcare costs regardless of where they live.

The better question isn't which state taxes the least, but which leaves a family with the most after taxes, housing and childcare are all paid — and that answer depends as much on a child's age and a ZIP code as on the state line.