Move over California and New York! Here’s where wealthy millennials earning over $200K are moving to in search of lower taxes

They have long been considered playgrounds for the young and wealthy, but are New York and California falling out of favor with wealthy millennials?

A new study suggests that 26-35 year olds earning more than $200,000 are fleeing the hot spots and heading south instead.

Analysis of 2021 IRS migration data by a personal finance company SmartAsset found that California and New York had lost the largest share of high earners in this cohort.

But Florida and Texas had made the most gains, thanks in part to the fact that neither state has income taxes.

The two states won 3,391 and 4,048 high earners respectively – and lost 1,216 and 2,139.

In total, this meant that Florida had seen the number of wealthy millennials increase by 3,391, while the number of wealthy millennials in Texas grew by 1,909.

New Jersey, Colorado, and North Carolina rounded out the top five states that had seen the greatest increases in the number of young, high-income earners migrating there.

Only 2 percent of 26- to 35-year-olds filing taxes in 2021 had incomes greater than $200,000, the study found.

And despite New York and California having the biggest losses, the two states still had the highest number of wealthy millennials overall.

But Washington DC has the highest percentage of young, wealthy professionals. More than 16 percent of taxpayers earning more than $200,000 are between the ages of 26 and 35.

The data confirms a continuing trend of workers fleeing New York and California state by the thousands thanks to high tax rates.

Separate figures released earlier this month showed that the two states combined lost $640 million in tax revenue. By comparison, Florida saw its tax revenue rise to $12 billion.

Several high-profile entrepreneurs have been steadily moving away from states like California, including Tesla boss Elon Musk, who recently swapped the Golden State for Austin, Texas.

And Miami is also a celebrity hot spot, with football player Tom Brady and his ex-wife Gisele among famous residents.

Last year, a similar Smart Asset study found that 15,788 high-earning young professionals left New York, while another 7,960 left California between 2019 and 2020.

At the time, researchers said the trend had been exacerbated by the move to remote working, which meant workers were no longer confined to the major cities where their offices were located.

Florida now tops the list of states with more than $12 billion in tax revenue, largely due to migration

Stephanie Horan, a data analyst at SmartAsset, said that both New York and California are the two states “having the most difficulty retaining wealthy young professionals.”

But she added that Texas and Florida both made “big gains and are the number one and two states where wealthy young professionals move.”

Of the 10 states where wealthy millennials moved to, three have no state income taxes at all.

Earlier this year, a Zogby Analytics poll found that 38.9 percent of New York voters “contemplated” or “planned” to leave the city.

Of those, 36.7 percent said the main reason was that state taxes were “too high.”

New York State’s income tax rate ranges from 4 to 10.9 percent. Meanwhile, California has an income tax rate of between 1 and 12.3 percent.