Quick Answer
Texas does not tax retirement income of any kind. Because it has no state income tax, Social Security, pensions, and 401(k)/IRA withdrawals are all state-tax-free at any age — and there's no estate or inheritance tax either. That makes Texas one of the most tax-friendly states for retirees. The catch: Texas has some of the highest property taxes in the country, though seniors 65+ get exemptions and a homestead cap. Federal income tax still applies.
If you're retiring in Texas — or thinking about it — the tax news is simple and good: Texas doesn't tax retirement income, because it doesn't tax income at all. Here's exactly what that covers, and the one tax retirees do need to watch.
What Texas does NOT tax
Social Security benefits — No state tax — Texas has no income tax.
401(k) & 403(b) withdrawals — State-tax-free at any age.
Traditional & Roth IRA withdrawals — Not taxed by Texas.
Public & private pensions — Fully exempt from state tax.
Estate & inheritance — Texas has no estate or inheritance tax.
The catch: property taxes
Texas funds itself partly through high property taxes, among the steepest in the nation. For retirees who own a home, this is the tax that matters most — it applies no matter how low your taxable income is.
The good news: Texas offers a homestead exemption, plus additional exemptions and a school-tax freeze (the "over-65" homestead cap) for homeowners 65 and older, which can meaningfully lower the bill.
Federal tax still applies
No state income tax doesn't mean no tax. The IRS still taxes traditional 401(k) and IRA withdrawals as ordinary income, and may tax part of your Social Security depending on your total income. Texas simply adds nothing on top.
Plan your Texas numbers
Still working in Texas? See your take-home with the Texas salary calculator. Planning for retirement? Project your savings with the retirement savings calculator or estimate your benefit with the Social Security calculator. See also states with no income tax.