Moving to Florida in 2027? What New Residents Should Know About Taxes

Florida continues to attract professionals, business owners, retirees, and investors from states with higher individual income tax rates.

Cities such as Fort Lauderdale, Boca Raton, Miami, and West Palm Beach are popular destinations for individuals considering relocation.

Although Florida's lack of a state individual income tax can provide significant financial advantages, relocating does not automatically eliminate every state tax obligation.

Does Florida have a state income tax?

Florida does not impose a state individual income tax.

That means Florida residents generally do not pay Florida state income tax on wages, retirement distributions, or personal investment income.

However, federal income taxes still apply, and business entities may have separate state tax obligations.

Individuals relocating from states that tax personal income may potentially realize substantial savings, depending on their circumstances.

What determines whether you are a Florida resident?

Establishing Florida residency involves more than purchasing a home or obtaining a Florida driver's license.

A person's domicile generally depends on where they intend to maintain their permanent home, supported by their actual circumstances and conduct.

Relevant factors may include the location of the primary residence, family, employment, financial relationships, voter registration, and other personal connections.

Taxpayers should also consider the residency laws of the state they are leaving.

Is living in Florida for 183 days enough?

Not necessarily.

Although 183-day tests are important under some states' tax residency rules, there is no universal rule establishing that someone automatically becomes a Florida domiciliary simply by spending 183 days there.

Former states may continue treating individuals as residents based on domicile or statutory residency tests.

For high-income individuals, carefully documenting the relocation can be important.

Can your former state still tax your income?

Yes.

Even after someone establishes Florida residency, income sourced to another state may remain taxable there.

Examples can include wages earned while physically working in another state, rental income from out-of-state property, and income from businesses operating elsewhere.

Executives receiving stock options, restricted stock units, or deferred compensation may face especially complicated multistate tax issues.

The sourcing rules may depend on when the compensation was earned, not simply where the recipient lives when it is paid.

What about Florida property taxes?

Florida homeowners generally pay local property taxes even though the state does not impose a personal income tax.

Eligible primary residences may qualify for homestead benefits, including exemptions and assessment limitations.

New Florida residents should also understand that a property's existing tax bill may not accurately represent what they will owe after purchasing it.

A change in ownership can affect assessed value and future tax liability.

What should retirees consider?

Retirees may benefit from Florida's treatment of personal retirement income, including qualifying pension and retirement account distributions.

However, federal income taxes may still apply to retirement distributions, Social Security benefits, and investment gains.

Retirees should also consider estate planning, health insurance, property taxes, and future living expenses before relocating.

Tax planning before moving to South Florida

Relocation should be evaluated as part of a broader financial strategy.

Business owners may need to review entity structures, employment arrangements, and income sourcing.

Investors may need to consider the timing of capital gains, retirement distributions, and other major financial transactions.

James Ridout CPA provides federal and multistate tax planning guidance for individuals, executives, business owners, and retirees relocating to Fort Lauderdale and the surrounding South Florida area. Contact the firm to discuss your relocation tax strategy.