Updated October 5, 2026. Quick answer: No. The Texas Constitution says the “legislature may not impose a tax on the net incomes of individuals”, so annuity payments to an individual add no Texas income tax.
How Texas treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Not taxed by the state |
| Where it is written | Individual income tax prohibited: Texas Constitution, Article VIII, Section 24-a (added November 5, 2019) |
| Qualified and non-qualified annuities | No distinction: the text bars a tax on the net incomes of individuals |
A $24,000 example
A stream of $24,000 in annuity payments adds $0 of Texas income tax. Federal tax on the payments still applies.
What changes in 2026
The latest documents read print no 2026 change to the way annuity income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether Texas taxes pensions, how Texas taxes retirement income, annuity income tax by state, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- Texas Constitution, including amendments through the November 4, 2025 election (Texas Legislative Council): https://tlc.texas.gov/docs/legref/TxConst.pdf
Sources: the primary documents linked above, read on October 5, 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.