Texas State Income Tax Guide (2026)
Texas has no state income tax — one of only 9 states with zero state income tax, and home to some of the fastest-growing cities in the US.
Top State Rate
0%
No state tax
$100k Take-Home
$79,180
/year (single)
State Tax on $100k
$0
single filer
Texas: No State Income Tax
As a Texas resident, your state income tax on wages and salaries is $0. You only owe federal income tax and FICA (Social Security + Medicare). This is a significant advantage over states like California or New York, where residents pay an additional 6–13% to the state.
$100,000 Salary in Texas — Full Tax Breakdown
| Category | Annual | Monthly |
|---|---|---|
| Gross Salary | $100,000 | $8,333 |
| Federal Tax | −$13,170 | −$1,098 |
| FICA (SS + Medicare) | −$0.00 | −$0.00 |
| Texas State TaxNo state tax | $0 | $0 |
| Take-Home Pay | $79,180 | $6,598 |
Assumes single filing status, standard deduction, no 401(k) or HSA contributions. 2026 tax year.
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- 1.Texas has zero state income tax. Full stop. Wages, capital gains, retirement income — all untouched by the state.
- 2.But Texas isn't actually "low tax." It just collects from a different bucket: property tax averages 1.6–2.5% of assessed value annually — among the worst in the country, with no Prop 13–style cap.
- 3.On a $400K home in suburban Austin or Dallas: ~$8,000–$10,000/year in property tax. Forever. Your equivalent California home (Prop 13–protected, 12 years held) might pay $4,500.
- 4.For W-2 earners under $200K who'd rent in Texas anyway: the no-tax angle is a real win. For homeowners moving from CA Prop 13 properties: the math often flips.
- 5.Sales tax stacks too — 8.25% in most metros. Texas franchise tax hits businesses with revenue over $1.23M. "No income tax" is real, but it's not the whole tax bill.
A quick hello before we start
Pour yourself an iced tea — or whatever you drink in 105°F July weather. This is the last Texas-tax page you should need this year.
Quick note up top: nothing here is personal tax, legal, or financial advice. It's a friendly explainer with real numbers and honest opinions. Your situation has wrinkles only your CPA can iron out — treat this like a thoughtful friend at a barbecue, not your accountant.
Last reviewed: April 2026 · Reviewed annually each January when new brackets publish
Why you can trust these numbers
Numbers reflect 2026 IRS federal brackets and FICA caps. Texas has no state income tax, so the calculator at the top shows your federal + FICA bill, which is exactly what hits your paycheck. Property tax estimates use county-level effective rates from the Tax Foundation and Texas Comptroller filings.
Reviewed annually each January and updated mid-year when rules change. Spot something off? Tell us — reader corrections genuinely make these guides better.
Sources: federal brackets + standard deduction from IRS Rev. Proc. 2025-32; state brackets verified against the Tax Foundation 2026 State Income Tax Rates compilation and the Texas Department of Revenue's published 2026 schedule.
What "no income tax" actually means — and what it doesn't
Texas is one of nine states with no personal income tax. That part is real. Whatever you earn in wages, your paycheck shows federal income tax + Social Security + Medicare withheld, and that's it for income taxes. A $100K Texas earner takes home about $7,000–$10,000 more than the same $100K earner in California, just from the absence of state income tax.
The trade-off: Texas funds its state and local government from three other places — property tax (the big one), sales tax (8.25% in most metros once you add city + transit + special districts), and a franchise tax on business revenue above $1.23M. Property tax is the one that surprises new arrivals. Effective rates run 1.6% in San Antonio and Houston suburbs, 1.8–2.0% in Travis County (Austin), and 2.2–2.5% in Frisco, Plano, and parts of north Dallas. There's no cap on how fast assessments can grow year over year (the 10% homestead cap helps a little but only on your primary residence).
Compare to California: Prop 13 caps your assessed value at purchase year + 2% annually, regardless of market. A 12-year California homeowner in San Jose might be paying $5,500/year on a house worth $1.7M. The same family in Plano on a $700K house pays $14,000/year — and their assessed value will track market value upward indefinitely. The income tax savings is real. So is the property tax cost.
What you'll actually pay — five real-life scenarios
Five scenarios that cover most readers. Find the one closest to you. If none match, the calculator at the top is for you.
Illustrative numbers — single filer unless noted, federal standard deduction, full-year Texas residency, W-2 income. Property tax is shown separately because it's the actual Texas cost, not income tax. Two-earner MFJ households pay more FICA than the calculator shows because each spouse has their own Social Security cap. Ballparks, not invoices.
Scenario 1: Public school teacher in San Antonio, $58,000
| Federal income tax | ~$4,925 |
| Texas state income tax | $0 |
| FICA (Social Security + Medicare) | ~$4,450 |
| Total income taxes | ~$9,375 |
| Annual take-home (pre-property-tax) | ~$48,625 |
| Effective income tax rate | ~16.2% |
Texas teacher pay is famously low — the state ranks in the bottom 10 nationally for average teacher salary. Renting in San Antonio (median 1BR ~$1,250/mo), this teacher takes home solidly more than the same role in NYC public schools, even before factoring in lower cost of living. If they buy a $250K starter home, add ~$5,000/year in property tax — still net favorable.
Scenario 2: Software engineer in Austin, $165,000
| Federal income tax | ~$28,850 |
| Texas state income tax | $0 |
| FICA | ~$13,800 |
| Total income taxes | ~$42,650 |
| Annual take-home (pre-property-tax) | ~$122,350 |
| Effective income tax rate | ~25.8% |
Same engineer at the same company in San Francisco would pay roughly $14K in CA state tax and take home about $108,000. The Austin take-home advantage: ~$14K. But if they buy a $550K Austin tract home: ~$11,000/year in property tax, eating most of the income-tax savings. Renters keep nearly all of it. This is why the "is Austin actually cheaper than the Bay Area?" debate has lived on Twitter for a decade.
Scenario 3: Two-income family in Frisco, $275,000 combined (MFJ, two kids)
| Federal income tax | ~$44,500 |
| Texas state income tax | $0 |
| FICA (two earners) | ~$21,600 |
| Total income taxes | ~$66,100 |
| Annual take-home (pre-property-tax) | ~$208,900 |
| Effective income tax rate | ~24.0% |
The classic North Dallas tech-corridor family. They likely own a $750K home with a $17,000–$18,000 annual property tax bill (Frisco's effective rate hits 2.4–2.5% in many neighborhoods). Compare to a similar California family at $275K MFJ paying ~$15K in CA income tax but only ~$7K in Prop 13–capped property tax: roughly a $7K net advantage to staying in Texas — meaningful, but not life-changing. The bigger win is housing affordability, not tax.
Scenario 4: BigLaw senior associate in Houston, $345,000 + $80,000 bonus
| Federal income tax | ~$113,050 |
| Texas state income tax | $0 |
| FICA + Additional Medicare | ~$19,650 |
| Total income taxes | ~$132,700 |
| Annual take-home (pre-property-tax) | ~$292,300 |
| Effective income tax rate | ~31.2% |
BigLaw market pay is the same in Houston as in NYC — around $345K/$80K at the fifth-year level. The Houston associate keeps about $50K more annually than the NYC associate, who'd pay ~$31K NY state + ~$19K NYC city tax. Even after a $12K Houston-area property tax bill on a $600K River Oaks-adjacent home, the net advantage is $35K+/year. This is the income level where the no-tax-state pitch actually delivers real money.
Scenario 5: Tech founder cashing $1.5M in equity
| Federal income tax (assuming LTCG) | ~$281,400 |
| NIIT (3.8% on investment income) | ~$49,400 |
| Texas state income tax | $0 |
| FICA | $0 (capital gains exempt) |
| Total taxes | ~$330,800 |
| Annual take-home from sale | ~$1,169,200 |
| Effective tax rate | ~22.0% |
A founder selling $1.5M in long-held company stock pays federal long-term capital gains rates (15%/20% by bracket) plus the 3.8% NIIT on investment income. In California, add another 13.3% × $1.5M = ~$200K in CA state tax. In Texas: zero. This is why founder relocations to Austin happen the year before exit, not after — the calendar-year savings is genuine seven-figure money. Just be sure the relocation is real (see California's residency section if you're moving from there — same playbook).
Got the number you came for? Scroll up to run your specific salary in the calculator. Or keep reading — the next section is the part most articles skip, and it's the one that actually changes the move-to-Texas math.
Back to calculatorProperty tax — Texas's actual tax
Texas effective property tax rates by county (approximate, primary residence with homestead exemption applied): Travis (Austin) 1.7–2.0%, Williamson (Austin north) 2.2–2.5%, Harris (Houston) 2.0–2.3%, Dallas 2.0–2.2%, Collin (Plano/Frisco) 2.2–2.5%, Bexar (San Antonio) 1.8–2.0%, Tarrant (Fort Worth) 2.0–2.3%. Rural counties run lower (~1.2–1.6%). Compare to the US median of ~1.0% and California's ~0.7%.
The 2023 homestead exemption increase to $100,000 (from $40,000) helped — it knocks ~$2,500/year off a typical bill. But Texas appraised values can rise as fast as the market, and the 10% annual homestead cap only protects against assessment shock for primary residences. Investment properties, second homes, and commercial property have no cap. If you're buying in Texas, the property tax bill is your single biggest housing cost line item after the mortgage — often 50–80% of what you pay in mortgage interest.
Practical implication: when you're shopping for a home in Texas, pull the prior year's tax bill from the county appraisal district website before you make an offer. The bill on the listing site is often understated (it shows the seller's exempted bill, not what you'll pay as a new owner with reset assessment). A $700K listing might show "$11K/year property tax" but actually run $15–17K on your first year as the new owner.
The "should I move to Texas?" math — actually run
If you're considering Texas from a high-tax state (CA, NY, NJ, IL, MA), here's the honest math:
- Annual state income tax savings: Use the calculator at the top. Switch to Texas in the dropdown to see what your new federal+FICA bill is. The delta vs your current state is your annual income-tax savings.
- Property tax delta: If you currently rent in CA/NY and would buy in TX, you go from $0 property tax to $10–18K/year. If you own a long-held Prop 13 home in CA and move to TX, your property tax doubles or triples. If you own in NJ/Long Island already, TX property tax is similar or slightly less.
- Housing cost / quality: Texas offers materially more square footage per dollar than CA or NYC. A $500K Austin/Dallas home gets you 2,400+ sqft of new construction with a yard. Same $500K in coastal CA gets you a 900 sqft starter or fixer. This is a real lifestyle delta, not a tax line.
- Pay adjustment: Many remote roles get a Texas-based pay cut if your employer indexes to local cost of living. Bay Area pay is partially indexed to Bay Area cost. Your $200K SF salary may become $170K in Austin even though your job didn't change. Confirm in writing before signing the lease — ideally before signing the offer letter.
- Climate and weather: Houston summers, Dallas/Austin extreme heat (90°F+ for 4–5 months), seasonal hurricanes (Houston/Galveston/Corpus), February freezes (Texas grid issues, see February 2021). Property insurance for hurricane-zone homes runs 2–3× California rates. If you're moving for tax savings, budget for $4–8K/year of incremental insurance.
For a $200K single renter moving from SF to Austin, the math is almost always positive — $13–15K annual income tax savings, minimal property tax exposure, plenty of housing inventory, real lifestyle gains. For a $500K family with a long-held Bay Area home, the math is much closer than people realize — and the housing transition is genuinely costly. For a $1M+ founder facing a liquidity event, the math is not even close — Texas is the obvious answer. Run your specific numbers honestly, including the parts that aren't on a spreadsheet.
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Things financially comfortable Texans actually do
Texas's no-state-income-tax structure makes some moves more or less valuable than they'd be elsewhere. A few that actually matter:
- Max your 401(k) ($24,500 in 2026) — pre-tax for federal. The state-tax angle doesn't apply here (there's no state tax to defer), but the federal savings are still significant: roughly $5,000–$8,000/year in federal tax for most middle-and-upper-middle earners.
- Max your HSA if eligible ($4,400 single / $8,750 family) — pre-tax for federal. HSA dollars never get taxed if used for medical, ever. Texas's lack of state tax doesn't change the federal value.
- Backdoor Roth IRA — fully legal, well-established, mostly free. Annoying paperwork, real long-term value.
- Mega backdoor Roth if your employer's 401(k) plan allows after-tax contributions (most large tech and BigLaw employers do). Can shelter another $46K+ annually.
- Property tax protest — Texas's appraisal system is challengeable every spring. About 50% of homeowners who file an informal protest get some reduction. Companies like Ownwell, Five Stone, and ProtestCity will do it for you on contingency (~30% of the savings) — easy money for most homeowners.
- Homestead exemption — file with your county appraisal district within the first year of buying. Worth roughly $2,500/year in property tax savings. Annoyingly, many new homeowners forget to file and lose a year of savings.
- Over-65 / disability exemptions — Texas freezes school district property tax assessments at the year you turn 65 (and/or qualify for disability). Massive long-run value for retirees who plan to stay put.
- 529 plan for kids' education — Texas doesn't offer a state-tax deduction (no state tax to deduct against), so you can shop any state's 529 for the lowest fees. Utah and New York 529 plans are popular among Texans.
- Texas franchise tax — if you're self-employed or run a small business with revenue >$1.23M, the franchise tax (0.375–0.75% on revenue, with deductions) is your one state-level tax bill. Below that threshold, you owe a "no tax due" report annually but no actual tax.
A friendly nudge: if you're going to do only one thing on this list, file your homestead exemption and protest your property tax assessment annually. Both are free, take 30 minutes total, and save more than most state-tax tactics save people in California.
Residency — the easy direction
Establishing Texas residency is the easy direction (everyone wants you), but if you're moving from California or New York, the high-tax state will fight to keep claiming you. The bar to actually become a Texas resident:
- Get a Texas driver's license (must surrender your old one). Register your vehicles in Texas.
- Update your voter registration to Texas. Vote in Texas elections.
- File a Texas homestead exemption on your primary residence (or formally lease a Texas residence as your primary).
- Update all your mailing addresses — bank, brokerage, employer, doctors, professional licenses.
- Spend more days in Texas than in any other single state. Aim for 200+ days/year if you can — way more than the simple 183-day threshold.
- Sever ties with your old state: sell the house if possible (or rent it out at arm's length), close local bank accounts, transfer professional memberships, change your dentist and primary care doctor.
California's FTB and New York's DTF are aggressive at clawing back "part-year" residents who didn't actually move. Texas itself is delighted to have you and asks for nothing. The friction is on the way out, not the way in. If you're moving from CA or NY, read those state guides for the residency-audit playbook in detail — the burden of proof is on you to show you genuinely left.
Real questions people actually ask
Q: Is Texas actually cheaper than California overall?
It depends almost entirely on whether you own a home and how long you've owned it. For renters and first-time buyers under $200K of income: yes, Texas is meaningfully cheaper after taxes and housing combined. For long-held California homeowners with Prop 13 protection: often no, especially if you'd be buying in a high-property-tax Texas county like Collin or Williamson. Run your specific numbers — the answer varies enormously.
Q: Does Texas tax remote workers from out of state?
No — Texas has no income tax, so it has no claim on remote workers regardless of their employer's location. The opposite case (you live in Texas, work remotely for a California or New York company) can be more complex: those states sometimes try to claim your income under their convenience-of-employer rules. New York is particularly aggressive on this. California less so. Texas itself doesn't tax you either way.
Q: Will Texas ever add a state income tax?
Highly unlikely in any near-term scenario. Texas voters approved a constitutional amendment in 2019 (Proposition 4) requiring a two-thirds vote in both legislative chambers AND a statewide voter referendum to enact a personal income tax. Realistically, you can plan around no income tax in Texas for the foreseeable future. The state is more likely to raise property tax or sales tax than to introduce an income tax.
Q: What's the Texas franchise tax and does it apply to me?
It's a tax on Texas businesses with annual revenue over $1.23M (2024 threshold, adjusted periodically). Rate is 0.375% for retail/wholesale and 0.75% for everyone else, applied to a margin calculation (not pure revenue). Sole proprietors are generally exempt. If you have an LLC, S-corp, or partnership and you're under the threshold, you still file an annual "no tax due" report but owe no tax. Above the threshold, expect to pay it — and budget for the compliance overhead, which is non-trivial.
Q: Are Texas property taxes really tax-deductible?
Federally yes, subject to the SALT cap ($25K for 2026 under OBBBA, up from $10K). For most Texas homeowners with $10–20K in property tax bills and no state income tax to add to the SALT pile, the new $25K cap is generous enough that property tax is now mostly fully deductible — a meaningful win for high-property-tax Texans. For households earning over $500K, the cap phases out, so high earners get less benefit.
Q: How does Texas hurricane / property insurance compare to California?
Coastal Texas (Houston, Galveston, Corpus Christi) homeowners pay $4,000–$10,000/year in property insurance — significantly more than California's $1,500–$3,500 average. Inland Texas (Austin, Dallas, San Antonio) is closer to national averages. Hail damage, freezing weather (February 2021), and tornado risk drive Texas insurance higher than people expect. Budget for it.
Our honest opinion (which is just an opinion)
Quick disclaimer before we get on the soapbox: what follows is one writer's perspective after reading a lot of tax data and talking to a lot of Texans. You're encouraged to disagree, and we genuinely mean that.
Texas's no-income-tax structure is real and meaningful for high earners and renters. It's also less of a slam-dunk than the marketing makes it sound — Texas has the 6th-highest property tax burden in the country, and that bill arrives whether you had a great income year or a terrible one. The tax bill is shifted, not eliminated.
The case for Texas is real:
- Zero state income tax on wages, capital gains, retirement income — every dollar protected from state-level taxation
- Strong job market (energy, tech, finance, healthcare, BigLaw all have major Texas presence)
- Housing inventory is meaningfully better than coastal markets — more square footage per dollar, faster permitting, less NIMBY friction
- No estate or inheritance tax
- Constitutional protection against future income tax
- Business-friendly regulatory environment (real, not just a slogan)
The case against is also real:
- Property tax effectively replaces income tax for homeowners — and it's regressive (everyone pays the same rate regardless of income)
- Sales tax is 8.25% in most metros — also regressive
- Hurricane insurance, AC bills, and weather-related infrastructure issues add hidden costs
- Public school funding is highly local and varies enormously by district — moving to a "good school" district usually means higher property tax
- The state grid (ERCOT) has had high-profile failures; backup generators are common in Houston suburbs
Honest take: if you're a renter or recent buyer earning under $150K, Texas is probably a great financial fit — meaningful income-tax savings, manageable property tax exposure, and good housing options. If you're earning $300K+ and would be a homeowner, the math is mixed and depends heavily on which county you land in. If you're earning $1M+ and considering relocation from CA/NY for a liquidity event, Texas is one of the obvious answers.
If you're already in Texas and reading this to confirm you made the right call: you probably did, especially if you bought before 2020. The Prop 13–style benefit doesn't exist, but the absolute cost of housing and the no-income-tax angle still works in your favor.
Either way: it's your life and your money. We just want you to look at the whole picture instead of the part that fits on a billboard.
What now
Run your numbers in the calculator above with Texas selected. Compare your federal+FICA bill to the same calc with your current state. That delta is your honest Texas income-tax savings.
Then add the property tax line you didn't have before (or replace your current property tax line if you already own). The combined number is what actually matters. The state-tax line is rarely the biggest line — but for high earners considering relocation, it can be the deciding one. For everyone else, max your 401(k) and HSA before optimizing geography. The biggest tax mistake most Texans make isn't paying too much Texas tax — it's leaving thousands in pre-tax retirement shelter on the table.
Sources & further reading
Where the numbers and rules on this page come from. Verify any claim against the primary source before making a decision based on it.
- →Texas Comptroller of Public Accounts — official tax info and franchise tax
- →Texas county appraisal districts (for property tax data)
- →Tax Foundation — annual state-and-local tax burden rankings
- →U.S. Bureau of Labor Statistics — Occupational Employment and Wage Statistics
- →Texas Education Agency — public school finance data
- →IRS — federal brackets, contribution limits, Publication 17
A few honest notes
Stuff worth keeping in mind:
- This is not personal tax, legal, or financial advice. It's a friendly, well-researched explainer. Your situation has details we can't see from here. Please run your specific numbers by a licensed CPA, EA, or tax attorney before making any meaningful decision.
- Tax law changes. This guide reflects 2026 IRS schedules and Texas Comptroller rules as understood at the time of writing. Brackets, deductions, franchise tax thresholds, and rules can be updated by Congress, the Texas Legislature, or the courts at any time.
- Property tax estimates are illustrative and vary widely by county, school district, and special taxing jurisdiction. Your actual property tax bill depends on your specific parcel — pull it from your county appraisal district's website before relying on the numbers here.
- The numbers are illustrative. Scenarios assume standard filing situations and don't include every credit, deduction, NIIT, equity-comp wrinkle, K-1 income, or out-of-state complication that might apply to you. Your actual tax bill will differ.
- Reading this page does not create a client relationship with the writer, ProSalaryTax, or anyone affiliated. We're just here to help you think clearly.
- No judgment, regardless of where in Texas you live or how much you make. Teachers, founders, partners, freelancers, ranchers, and everyone in between — you're all welcome here.
Last updated April 2026 with 2026 IRS schedules and current Texas Comptroller guidance. Numbers assume single filer except where noted. This is journalism with a calculator attached, not tax advice. Be kind to yourself in March.
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