Texas Retirement Income Tax Guide for Seniors
No. Texas has no state income tax. For most retirees the bigger question is property tax, and Texas gives homeowners 65 and older some of the largest school tax breaks in the country.
No. Texas does not tax Social Security, pensions, 401(k) or IRA withdrawals, or any other income, because it has no state income tax. Retirees pay mainly sales tax and local property tax. A homeowner 65 or older gets $200,000 off the home's value for school taxes ($140,000 for every homestead plus $60,000 for age), and the school tax bill is then capped so it cannot rise while you live there.
Retirement income in Texas
Texas voters added a ban on a personal income tax to the state constitution in 2019, so there is no state return to file. That covers every kind of retirement income:
- Social Security and Railroad Retirement: not taxed by Texas.
- Military, federal, state and private pensions: not taxed.
- 401(k), 403(b), IRA and Roth withdrawals, annuities: not taxed.
- Interest, dividends and capital gains: not taxed.
Federal tax still applies. Up to 85% of your Social Security can be taxable on your federal return once your combined income passes $25,000 (single) or $32,000 (married filing jointly). The Social Security tax calculator runs those numbers for you.
What retirees pay instead
| Tax | How it works in Texas |
|---|---|
| Sales tax | 6.25% state rate. Cities, counties, transit and special districts can add up to 2%, for a combined maximum of 8.25%. Groceries and prescription drugs are exempt. |
| Property tax | No state property tax. School districts, counties, cities and special districts each set a rate, and the combined rate is high by national standards. This is where the big senior breaks apply. |
| Estate or inheritance tax | None. |
Property tax breaks at 65
Every Texas homeowner who lives in the home as a primary residence can claim the general residence homestead exemption. State law requires school districts to exempt $140,000 of a homestead's value. Turning 65 adds three more protections.
1. An extra $60,000 school exemption
School districts must give an additional $60,000 exemption to homeowners who are 65 or older or disabled. There is no income limit. If you qualify as both 65 and disabled, you choose one for school taxes; you cannot stack them. Counties, cities and other local taxing units may also adopt their own age 65 exemption of at least $3,000, and many do.
2. A school tax ceiling
Once you qualify, the school district taxes on your home cannot go up as long as you own and live in it, even if the home's value climbs or the district raises its rate. Taxes can go down. If you add on to the home, such as a new room, the ceiling is adjusted for the new improvement. A surviving spouse who is 55 or older when the 65-or-older owner dies can keep the exemption and the ceiling.
3. The right to defer
Homeowners 65 or older can file a tax deferral affidavit (Form 50-126) with the appraisal district. Taxes on the home are then postponed, not forgiven, for as long as you own and live there. Deferred taxes add up with interest at 5% a year and become due once you no longer own and live in the home, for example after a sale or the owner's death. It can help a house-rich, cash-poor owner stay put, but it reduces what your heirs receive.
Example: what the school exemptions remove
| Under 65 | 65 or older | |
|---|---|---|
| Appraised value of the home | $320,000 | $320,000 |
| General homestead exemption (school) | −$140,000 | −$140,000 |
| Age 65 exemption (school) | $0 | −$60,000 |
| Value taxed by the school district | $180,000 | $120,000 |
The $320,000 home is an illustration. County, city and special district taxes are figured separately, using whatever exemptions those units have adopted.
How to claim the senior exemption
- Apply to the appraisal district in your county, not the state. Most districts take Form 50-114 online or by mail.
- Include a copy of your Texas driver's license or ID card showing the home's address.
- You can apply as soon as you turn 65, and the exemption counts for the whole year you turned 65. You have up to two years after your 65th birthday to file.
- If you move, you can carry a percentage of your school tax ceiling to a new Texas home using a certificate from your old district (Form 50-272).
Before you move to Texas for the taxes
Retirees from high income tax states often find their total tax bill drops in Texas, but not always by as much as they expect. Property taxes on a newly purchased home are figured on its full market value until you qualify for the exemptions, and the school tax ceiling only locks in once you are 65 and the exemption is approved. In fast-growing suburbs, special utility districts and new school bonds can add a large share of the bill. Look up the actual tax rates for the address, not just the county, before you buy.
To compare Texas with other states, use our state retirement income tax finder and the senior property tax exemption guide.
Frequently Asked Questions
Does Texas tax Social Security or pensions?
No. Texas has no state income tax, so Social Security, pensions, IRA and 401(k) withdrawals, and investment income are not taxed by the state. Federal tax rules still apply.
How much is the Texas over-65 homestead exemption?
School districts must exempt $140,000 for every residence homestead plus an additional $60,000 for owners who are 65 or older or disabled, for $200,000 in total. Counties, cities and other local units may add their own age 65 exemptions.
Do Texas seniors stop paying school property taxes?
No, but the amount is frozen. Once you qualify for the age 65 exemption, your school district tax on that home cannot increase while you own and live in it. It can still go down.
Is there an income limit for the Texas senior exemption?
No. The age 65 school exemption and the tax ceiling are based on age and residence, not income.
Does Texas tax groceries?
No. Groceries and prescription drugs are exempt from Texas sales tax. Most other goods are taxed at the 6.25% state rate plus up to 2% local tax.
Sources: Texas Comptroller of Public Accounts, property tax exemptions and the school tax ceiling for homeowners 65 or older; Texas Comptroller sales tax rate guidance. Read October 2026. This page is general information, not tax advice, and is not affiliated with the Texas Comptroller or the IRS. Confirm your exemptions and tax rates with your county appraisal district. See our Data Sources page for how we source figures.