Retirement income in Texas
Varies
Does Texas Tax Retirement Income?
Short answer: No. Texas has no individual income tax, so pensions and 401(k)/IRA withdrawals are not taxed by the state. With no income tax, Texas relies more on sales and property taxes; older homeowners get this break: Owners 65+ or disabled get an extra $60,000 school exemption and a school tax ceiling that freezes their school taxes.
Pensions, traditional IRA and 401(k) withdrawals are taxable federally either way; Roth withdrawals after 59½ (5-year rule met) are tax-free.
Records to keep: Keep your state return, W-2s and 1099s (1099-R, SSA-1099), and any state credit worksheets. Check your state revenue department's current-year instructions before you file.
Retirement income in Texas
Varies
Individuals / Personal Taxes
No. Texas has no individual income tax, so pensions and 401(k)/IRA withdrawals are not taxed by the state. With no income tax, Texas relies more on sales and property taxes; older homeowners get this break: Owners 65+ or disabled get an extra $60,000 school exemption and a school tax ceiling that freezes their school taxes.
Business justification
No. Texas has no individual income tax, so pensions and 401(k)/IRA withdrawals are not taxed by the state. With no income tax, Texas relies more on sales and property taxes; older homeowners get this break: Owners 65+ or disabled get an extra $60,000 school exemption and a school tax ceiling that freezes their school taxes. Pensions, traditional IRA and 401(k) withdrawals are taxable federally either way; Roth withdrawals after 59½ (5-year rule met) are tax-free.
Category
- Personal Tax Deductions