Updated October 4, 2026. Quick answer: No. Texas has no state income tax, so the state does not tax 401(k) or IRA withdrawals. The Texas Comptroller’s office says “Texas has no state income tax” (Federal tax on the withdrawal still applies.)
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Texas tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Texas tax 403(b) and 457(b) withdrawals.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Texas tax withholding on IRA and 401(k) withdrawals.
Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Texas tax TSP withdrawals?.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Texas have an inheritance tax?.
Contributing to an HSA? How the state taxes it, from its own tax documents: Does Texas tax HSA contributions?.
What Texas does with 401(k) and IRA withdrawals
There is nothing to compute, so the state’s documents are short on this point. The federal return is where the withdrawal is taxed.
| Item | What the documents say |
|---|---|
| Treatment | Not taxed by the state: no state income tax |
| State rate on a withdrawal | None |
| Source | Texas Comptroller of Public Accounts |
A $40,000 withdrawal
A $40,000 withdrawal from a traditional 401(k) or IRA adds $0 of Texas income tax, because the state has no tax on that income. Your federal return still includes the withdrawal.
What changes in 2026
No change for 2026 appears in the documents read for this page.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Texas taxes pensions, how Texas taxes retirement income, whether Texas taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
Find the right next step for your situation
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Compare vetted advisors for retirement withdrawals
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Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
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Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
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It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
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Answer againSources
- Texas is open for small business (Fiscal Notes): https://comptroller.texas.gov/economy/fiscal-notes/industry/2025/small-biz-info/
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.