Does Texas Tax Retirement Income?

Texas has no individual income tax, so Social Security benefits is not taxed at the state level.

Texas has no state income tax, so Social Security benefits are not taxed at the state level.

With no state return to file, the only Social Security tax question for a Texas retiree is the federal one: depending on combined income, up to 85% of benefits can be taxable on the federal return. Retirees comparing Texas with a state that does tax benefits can see the full list in our guide to states that do not tax Social Security.

Texas has no individual income tax, so pension income is not taxed at the state level.

Private and public pension income is not taxed by Texas because there is no state individual income tax.

No exclusion is needed. Texas does not levy an individual income tax, and the state constitution prohibits one without voter approval.

Public and private pensions, annuities, and retirement-plan distributions do not always get the same treatment. The pension comparison lists which states exempt pensions broadly, partly, or only for certain plans.

Texas has no individual income tax, so traditional 401(k) and IRA withdrawals is not taxed at the state level.

Traditional 401(k) and IRA withdrawals face no Texas state income tax. Federal income tax still applies.

Because Texas does not tax the withdrawal, the timing of Roth conversions and required minimum distributions is a purely federal decision for a Texas resident. That is one reason retirees convert after establishing Texas residency: the conversion income is taxed federally in the year of conversion, but no state layer is added on top.

Every state page on this site runs the same retiree profile so the states can be compared: $30,000 of Social Security, $40,000 withdrawn from a traditional 401(k), and a $20,000 private pension, $90,000 in total.

A 68-year-old with $30,000 of Social Security, $40,000 from a 401(k), and a $20,000 private pension owes zero Texas state income tax on all $90,000. Federal tax and local property taxes are the numbers that actually matter.

Take the $90,000 in full: $30,000 of Social Security, $40,000 from the 401(k), and $20,000 of pension. There is no Texas return, no subtraction to calculate, and no age or income test, so the state income tax is roughly $0 on all of it. A $150,000 lump-sum IRA withdrawal in the same year is also $0 of Texas tax, which is the honest reason Texas is used for large Roth conversions and lump-sum years. The contrast is federal and local: the withdrawal is fully taxable federally, and the biggest state-level number the retiree actually pays is property tax on the home, which the over-65 homestead exemptions and the school tax ceiling can reduce but not eliminate. At death, the same IRA passes with no Texas estate or inheritance tax, now guaranteed by the 2025 amendment, though the federal estate tax and the heir's income tax on inherited IRA withdrawals still apply.

The same $90,000 profile looks different a state line away. The rows below come from the reviewed 51-state table; each state name links to its own guide.

• Florida: has no individual income tax at all.
• Arizona: treats Social Security as exempt, pensions as partially taxed, and 401(k) and IRA withdrawals as taxed, with a top rate of 2.50% and up to $2,500 for qualifying government pensions.
• Nevada: has no individual income tax at all.

Texas competes with Florida and Tennessee on the zero income tax pitch. The honest comparison for retirees is total cost, since Texas property tax bills on a paid-off home can offset years of income tax savings from smaller portfolios.

Military retirement: Military retirement pay is not taxed by Texas, the same as all other retirement income. See the military retirement tax map for every state's treatment.

Estate and inheritance tax: Texas has no estate or inheritance tax. Its inheritance tax was repealed effective September 1, 2015, and voters approved a 2025 constitutional amendment prohibiting new estate, inheritance, and gift taxes.

Selling a home or investments in Texas: retirement-income rules do not cover capital gains. See Texas capital gains tax before selling appreciated property or a brokerage position in the year you move or retire.

• Confirm the exclusion you are claiming. No exclusion is needed. Texas does not levy an individual income tax, and the state constitution prohibits one without voter approval.
• Part-year residents. If you moved into or out of Texas during the year, retirement income is generally allocated to the period of residency, and the former state may still tax distributions received before the move. Document the move date, the new domicile, and where each distribution was received.
• No state withholding to set up. Custodians withhold federal tax only for a Texas resident. If you moved from a state that taxes retirement income, stop that state's withholding once residency changes, and keep proof of the move date.
• Federal side. The federal return has its own rules: up to 85% of Social Security can be taxable, the temporary $6,000 federal senior deduction is available for 2025 through 2028 subject to income limits, and Roth conversions are taxed in the conversion year. State exemptions do not change any of that.
• Large one-time distributions. State income tax is off the table, so planning shifts to federal brackets, Roth conversion timing while federal income is low, and property tax homestead and over-65 exemptions and ceilings, which can meaningfully cut the largest tax a Texas retiree actually pays.

Comparing states before a move? Use the retirement taxes by state table and the moving states tax guide, and read retirement tax planning for how distributions, conversions, and a move are sequenced together.