State retirement tax · Texas
Retirement tax rules for Texas residents (2026 guide)
Texas has no personal income tax, and November 2025 voters made its homestead break much bigger: school districts now exempt $140,000 of a homestead's value, and homeowners 65 and older get another $60,000 on top. For Texas retirees, property and sales taxes are the whole story.
By Mindaugas Laucius · Last reviewed October 21, 2026
Rate on retirement income
0%
Taxes Social Security?
No
Approx. tax on $90k retirement income
$0
Pension carve-outs
Standard
Quick figures: a single filer with $90,000 of income, $30,000 of it Social Security.
No tax on retirement income
Texas doesn't tax Social Security, pensions, IRA or 401(k) withdrawals, or investment income, and it has no estate or inheritance tax. There is no state income-tax return.
Homestead exemptions after Propositions 11 and 13
Proposition 13 (approved November 4, 2025) raised the school-district homestead exemption from $100,000 to $140,000; Proposition 11 raised the additional school exemption for homeowners 65 and older or disabled from $10,000 to $60,000. Both apply back to the 2025 tax year. Cities, counties and special districts may grant their own optional exemptions on top.
At 65, school taxes on your homestead are also capped at the amount due in the year you first qualify — the tax ceiling — even if the value or rates go up later.
Sales tax
The state sales tax is 6.25%, and cities, counties and transit authorities can add up to 2% more, for a maximum of 8.25%. Groceries for home consumption and prescription drugs are exempt.
Worked examples
A $400,000 homestead, owner 65+
- School-district exemptions: $140,000 general + $60,000 age 65+ = $200,000.
- $400,000 − $200,000 = $200,000 taxable for school taxes.
Half the home's value is outside school taxes, and that school bill is then frozen under the 65+ ceiling.
The school-tax ceiling
- School tax in the year you turn 65: say $2,000.
- Next year the appraisal rises 8% and the rate is unchanged.
Your school tax stays capped at $2,000 (it can fall, not rise, unless you add improvements).
Retirement income
- $90,000 of pension and IRA income + $36,000 of Social Security.
Texas income tax: $0.
Recent and pending changes
- November 2025: Propositions 13 and 11 raised the school homestead exemption to $140,000 and the extra 65+/disabled exemption to $60,000, retroactive to the 2025 tax year.
Run your own numbers — pick Texas in the calculator’s Taxes tab for a year-by-year estimate. Or compare all 50 states and DC.
Thinking about a move? The free state-to-state retirement tax comparison puts Texas next to any other state on your own income.
Texas questions
When can I claim the Texas over-65 exemption?
In the year you turn 65 — you don't have to wait until January 1 of the next year. Apply with your county appraisal district.
Does the 65+ school-tax ceiling move with me?
It can. Texas lets you transfer the same percentage of the ceiling to a new homestead in the state; ask the appraisal district for the certificate.
Does Texas tax retirement income or capital gains?
No. Texas has no personal income tax of any kind.