Texas State Income Tax Calculator
Great news! Texas has NO state income tax. This calculator shows you how much you keep of your income compared to states with income tax. Texas is one of only 9 states with zero income tax, making it attractive for workers and retirees. While you still pay federal income tax, FICA, and other taxes, the absence of state income tax can save you thousands annually. Use this calculator to see your potential savings vs high-tax states.
Does Texas have state income tax?
No! Texas has NO state income tax on individuals. This is one of Texas's biggest attractions for residents and businesses. Texas is one of only 9 states with no income tax (along with Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington, and Wyoming). This means if you earn $100,000 in Texas, you pay $0 in state income tax, while California would charge $13,000+. Texas makes up for this revenue through higher property taxes and sales taxes instead.
How does Texas fund state services without income tax?
Texas generates revenue through alternative sources: Sales Tax (6.25% state + local up to 8.25% total), Property Taxes (average 1.6% of home value - 6th highest in US), Franchise Tax on businesses, Severance Taxes on oil and gas extraction, Federal Funding, and Fees/Permits. The state constitution prohibits income tax without voter approval. In 2019, voters approved a constitutional amendment making it even harder to implement income tax (requires 2/3 legislature + voter approval).
What taxes DO Texas residents pay?
While Texas has no income tax, residents pay: Federal Income Tax (10-37% based on income - same as all US states), FICA/Social Security Tax (6.2% up to $168,600 in 2026), Medicare Tax (1.45% on all income, plus 0.9% on high earners), Sales Tax (6.25-8.25% on purchases), Property Tax (average 1.6% annually on home value - ~$4,800/year on $300k home), Vehicle Registration/Inspection fees. Total tax burden for middle-income Texans is often lower than high-tax states despite these other taxes.
Should I move to Texas to save on taxes?
Texas can offer significant tax savings, especially for high earners. Example: $200,000 income saves ~$15,000/year vs California, ~$10,000 vs New York. However, consider: Higher property taxes (may offset savings if you own expensive home), Higher sales tax on purchases, Hot humid climate in summer, Different job markets and opportunities, Cost of living varies by city (Austin/Dallas expensive, smaller cities cheaper), No state support programs (fewer services). For retirees and high earners, Texas often provides substantial savings. Calculate your total tax burden including property and sales taxes before deciding.