Texas retirement taxes at a glance (2026)
| State income tax | No state income taxTexas has no individual income tax. |
|---|---|
| Social Security | Not taxedSocial Security is not taxed. |
| Pensions | Not taxedPensions are not taxed. |
| 401(k) and IRA withdrawals | Not taxedIRA and 401(k) withdrawals are not taxed. |
| Government pensions | Not taxedGovernment pensions are not taxed. |
| Military retirement pay | Not taxedMilitary retirement pay is not taxed. |
| Estate tax | No |
| Inheritance tax | No |
| Property tax help for seniors | School districts must exempt $140,000 of a homestead's value plus an extra $60,000 for owners age 65+ or disabled, and the school tax on a 65+ owner's home is capped by a tax ceiling. |
| Sales tax | Groceries and prescription drugs are exempt from sales tax; property taxes are relatively high. |
Recent changes and good to know
- In 2025 the school homestead exemption rose to $140,000 and the age 65+/disabled extra exemption rose to $60,000.
- A 2025 constitutional amendment bars new state estate, inheritance, and gift taxes (per secondary source).
How to lower your retirement taxes in Texas
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Texas too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington, Wyoming.
Frequently asked questions
Does Texas tax retirement income?
No: Texas has no income tax, so it does not tax any retirement income.
Does Texas tax Social Security?
Social Security is not taxed.
Does Texas tax pensions?
Pensions are not taxed.
Does Texas tax 401(k) and IRA withdrawals?
IRA and 401(k) withdrawals are not taxed.
Does Texas tax military retirement pay?
Military retirement pay is not taxed.
Sources (last verified 2026)
- Property Tax Exemptions — Texas Comptroller of Public Accounts (2026)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026)
- Texas retirement income tax guide — Brevy Care (2026)
- Texas retirement taxes — Taxstra (2026)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.