Texas State Income Tax for 2025: A Guide

Texas is one of a few US states with no income tax for individuals. This means more money could stay in your pocket throughout the year if you earn income in the Lone Star State. 

Texas does rely heavily on property and sales taxes, though. Property taxes, set and collected by local governments and not the state, are generally between 1.6% and 1.8%. The average combined state and local sales tax rate is 8.25%. These taxes could add up for shoppers and property owners, offsetting any income tax savings you might gain.

Beginning in tax year 2025 through tax year 2028, the limit on the amount of these state property and sales tax deductions allowed on a taxpayer’s federal tax return increases from $10,000 to $40,000 in 2025 (with annual increases of 1% per year through 2028). This means Texans may be able to deduct more of these taxes paid on their federal returns, if they are itemizing their deductions.

It’s important to know that most income-earning Texans still pay federal income tax. If you made money from Texas sources in 2025, you’ll likely still need to file a federal tax return for the 2025tax year (the taxes you file in 2026). 

*Note you are still responsible for Federal taxes if you meet the IRS income filing threshold. This article addresses state-specific taxes only.

Specific income tax considerations in Texas

Since Texas doesn’t have an individual income tax, income sources like retirement and pension funds, investment earnings, Social Security benefits, and military pay are not taxed at the state level. This can be a significant advantage for Texas residents, as more of their money stays in their hands.  

Keep in mind that while Texas doesn’t tax these earnings, they may still be subject to federal taxes. It’s still important to stay on top of your federal obligations. 

Here are a few more tax situations to consider: 

• If you live in a state that has income tax but earned money in a state that doesn’t—like Texas—you’ll still need to include that income on your home (resident) state tax return. For example, if you’re a California resident who worked in Texas in 2025, you must report your Texas earnings on your California (and federal) return.
• Likewise, if you live in Texas—where there’s no state income tax—but earned income in California, you’ll need to file a nonresident tax return in California to report those earnings. You’ll also need to report those earnings on your federal return. 
• Texas is a community property state, which can affect how married couples file their federal taxes, especially if they wish to file separately.

How much is federal income tax in Texas?

The federal income tax system in 2025 has seven tax brackets, ranging from 10% to 37%, depending on your taxable income and filing status. For example, single filers earning up to $11,925 fall into the 10% tax bracket, while those with taxable income above $626,350 are taxed at the top rate of 37%. 

Here’s a table that breaks down 2024 tax rates for different income earners and filing statuses:
 

Tax rate	Single	Married filing jointly	Married filing separately	Head of household
10%	$0 to $11,925	$0 to $23,850	$0 to $11,925	$0 to $17,000
12%	$11,926 to $48,475	$23,851 to $96,950	$11,926 to $48,475	$17,001 to $64,850
22%	$$48,476 to $103,350	$96,951 to $206,700	$48,476 to $103,350	$64,851 to $103,350
24%	$103,351 to $197,300	$206,701 to $394,600	$103,351 to $197,300	$103,351 to $197,300
32%	$197,301 to $250,525	$394,601 to $501,050	$197,301 to $250,525	$197,301 to $250,500
35%	$250,526 to $626,350	$501,051 to $751,600	$250,526 to $626,350	$250,501 to $626,350
37%	$626,351 or more	$751,601 or more	$375,801 or more	$626,351 or more

Source: IRS

How to file income tax in Texas

While Texas doesn’t have an individual state income tax, most Texans still need to file federal taxes—and it’s important to stay mindful of other state-specific taxes, like sales and property taxes. 

TurboTax makes it easy to file your federal taxes and helps you understand how Texas-specific rules impact your specific situation. Whether you want to file taxes on your own or get expert help, we’ve got your back.

Need more support from a local tax expert in Texas? TurboTax experts are available to guide you or even file for you.