Does Texas tax retirement income?

No. Texas has no state personal income tax, so Social Security, pensions, IRA and 401(k) withdrawals, annuities, and military retirement pay are all completely free of Texas state income tax. The only income tax a Texas retiree owes on these streams is federal.

Does Texas tax Social Security benefits?

Texas does not tax Social Security benefits at all. However, up to 85% of your Social Security can still be taxable at the federal level depending on your total combined income, so this calculator lets you estimate that federal portion.

Why does Texas have no income tax?

The Texas Constitution prohibits a statewide individual income tax without approval by a public vote. Texas funds its government primarily through sales tax and property tax instead, which is why property taxes in Texas tend to be relatively high.

Are 401(k) and IRA withdrawals taxed in Texas?

Withdrawals from traditional 401(k) and IRA accounts are not taxed by the state of Texas. They are still taxed as ordinary income on your federal return, and early-withdrawal penalties may apply before age 59 and a half.

Is military retirement pay taxed in Texas?

No. Texas does not tax military retirement pay because it has no state income tax. Federal tax rules still apply to military pensions just as they do to civilian pensions.

Texas Retirement Income Tax Calculator

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Texas is one of the most tax-friendly states for retirees

Texas is one of only a handful of U.S. states with no personal income tax of any kind. The Texas Constitution bars the legislature from imposing a statewide individual income tax unless voters approve it. As a practical matter, that means every common stream of retirement income — Social Security, employer pensions, IRA and 401(k) distributions, annuities, and military retirement — is completely free of Texas state income tax.

This calculator confirms your $0 Texas liability and then gives a rough estimate of the federal income tax you may still owe, since federal rules apply no matter which state you live in.

How it works

For the Texas portion, the answer is simple: the state tax on all retirement income is $0. Texas raises revenue from sales tax (6.25% state base) and property tax instead.

For the federal estimate, the tool:

Applies the Social Security taxability share you choose (up to 85% can be federally taxable, depending on your combined income).
Adds your pension, IRA/401(k), and other taxable income to form an estimated federal AGI.
Subtracts the 2024 federal standard deduction — with the extra age-65+ amount if you check that box.
Runs the remainder through the 2024 federal tax brackets for your filing status.

Tips and notes

The “federally taxable share of Social Security” defaults to 85%. Lower-income retirees may have 0% taxable; use the IRS Social Security Benefits Worksheet (Pub. 915) for the exact figure.
Because Texas has high property taxes, factor those in when comparing the overall cost of retiring there — see the related Texas property tax calculator.
This is an estimate, not tax advice. It omits credits, capital-gains rates, and itemized deductions. Confirm federal numbers with the IRS or a tax professional.