Does Texas tax Social Security and retirement income?
By Nicolas Straut
Key takeaways
- Texas has no personal income tax, and Article 8, Section 24-a of its constitution prohibits one.1
- Once you qualify for the age 65 homestead exemption, the school district taxes on your home cannot go up while you own and live in it.
- Sales tax runs 6.25% at the state level and up to 8.25% with local add-ons.
In this article
- How Texas treats each source of retirement income
- Where Texas retirees pay state and local tax
- Why a Texas income tax is unlikely to appear
- What a move to Texas saves in state income tax
- Property tax details to confirm locally
- Plan Texas withdrawals around federal brackets only
- Questions Texas retirees ask
Key takeaways
- Texas has no personal income tax, and Article 8, Section 24-a of its constitution prohibits one.1
- Once you qualify for the age 65 homestead exemption, the school district taxes on your home cannot go up while you own and live in it.
- Sales tax runs 6.25% at the state level and up to 8.25% with local add-ons.
No, Texas doesn't tax Social Security, pensions or IRA withdrawals. There is no state income tax at all, and changing that would take a constitutional amendment.
Texas collects from retirees through property and sales taxes instead. For most homeowners the school tax freeze at 65 is the single most valuable state rule.
How Texas treats each source of retirement income
| Income | In Texas | The rule |
|---|---|---|
| Social Security | Not taxed | Texas does not tax Social Security, because Texas has no personal income tax.1 |
| Pensions | Not taxed | Pensions are untaxed by the state, whether a private employer or a government pays them.1 |
| IRA and 401(k) withdrawals | Not taxed | IRA and 401(k) withdrawals, Roth conversions included, owe the state nothing.1 |
| Income tax rate | None | No personal income tax |
Where Texas retirees pay state and local tax
Property tax is local in Texas, but the state sets the exemptions and the freeze that apply at 65.
School taxes stop rising at 65
Once you qualify for the age 65 exemption, the school district taxes on your homestead cannot increase as long as you own and live in that home. You also get an extra homestead exemption at 65.2
Sales tax
The state sales and use tax rate is 6.25%, and local jurisdictions can add up to 2%, for a combined maximum of 8.25%.3
No inheritance tax
S.B. 752 repealed the Texas inheritance tax, which had not been collected for almost 10 years after federal changes removed the credit it was built on.4
Why a Texas income tax is unlikely to appear
The ban is in the constitution, not just in a statute, so any future income tax would need a new amendment and a statewide vote.
A ban written into the constitution
Article 8, Section 24-a of the Texas Constitution prohibits a personal income tax. The legislature proposed the ban as H.J.R. 38 in 2019, for the November 5, 2019, election.5
What a move to Texas saves in state income tax
Our married sample couple, both 67, owes Texas nothing on $60,000 of pension and IRA income. Here is what the same income costs in three states people leave for Texas.
| State | State tax on the sample couple |
|---|---|
| Texas | $0 |
| California | $138 |
| Arizona | up to $1,395 |
| Illinois | $0 |
| Every state we cover | |
Property tax details to confirm locally
- The current amount of the school homestead exemption and the extra exemption at 65, which the Comptroller FAQ we read shows at older amounts.
Plan Texas withdrawals around federal brackets only
With no state tax, every withdrawal decision in Texas turns on federal brackets and Medicare premiums. The Tweed Retirement Withdrawal Plan runs those year by year, and the free Tweed Retirement Calculator checks the savings side.
Texas adds nothing to a large IRA withdrawal or Roth conversion, but Medicare still counts it. Check the IRMAA brackets for 2026 before you size one, so the federal side doesn't raise your premiums.
Texas retirees choosing when to start benefits can compare every filing age, with a spouse's benefit included, in the Tweed Social Security claiming plan.
This year is free
Build a Texas withdrawal plan around federal brackets
Questions Texas retirees ask
Is a Roth conversion cheaper in Texas?
Yes, a Roth conversion in Texas costs only federal income tax, because there is no state income tax to add on top.
Will the IRS still tax my Social Security in Texas?
It can. Federal rules decide that wherever you live, and a married couple with provisional income over $44,000 pays federal tax on up to 85% of benefits.
Sources
- https://statutes.capitol.texas.gov/Docs/CN/htm/CN.8/CN.8.24-a.htm
- https://comptroller.texas.gov/taxes/property-tax/exemptions/age65older-disabled-faq.php
- https://comptroller.texas.gov/taxes/sales/faq/local.php
- https://capitol.texas.gov/tlodocs/84R/analysis/html/SB00752F.htm
- https://capitol.texas.gov/tlodocs/86R/analysis/html/HJ00038E.htm
This page covers Texas state income tax on retirement income for full-year residents in 2026. The households are illustrations, not your return.
Tweed provides educational information, not tax or financial advice. Nicolas Straut is a personal finance writer, not a financial advisor or tax preparer.
Personal finance writer, former Forbes contributor and This Week in Fintech writer. He isn't a financial advisor or a CPA.
Related posts
Retirement planning
State taxes on retirement income for 2026
Which of the most searched states tax Social Security, pensions and IRA withdrawals, from each state's own rules, with what one retired couple owes in each.
Nicolas Straut · Published Oct 28, 2026
Retirement planning
Which account should you withdraw from first in retirement?
The common taxable-first order, why it can cost more tax once RMDs start, one couple run through five orders, and how to fill a tax bracket.
Nicolas Straut · Published Oct 26, 2026
Retirement planning
What are the IRMAA brackets for 2026?
Every 2026 Medicare Part B and Part D surcharge bracket by filing status, what each costs a year, how MAGI is counted, and how to stay under a line.
Nicolas Straut · Published Oct 26, 2026