Updated October 16, 2026. Quick answer: Texas does not tax an inherited IRA withdrawal at the state level: the Comptroller says “Texas has no state income tax”, and its revenue estimate says the state inheritance tax ceased to be levied in calendar 2005.
Texas at a glance
| Item | What the documents say |
|---|---|
| How the state taxes retirement-account income | No state income tax |
| Do the state’s documents address beneficiaries? | Not addressed: there is no state income tax to apply to it |
| Retirement exclusion or credit | Not needed; there is no state income tax |
| Rate in the documents read | Not applicable |
| State inheritance or estate tax | The 2008-09 revenue estimate says the inheritance tax ceased beginning in calendar 2005 and that Texas no longer imposes a tax on estates |
| Changed for 2026? | The documents read do not report any 2026 change to the absence of a state income tax |
What the Texas documents say
The Texas Comptroller of Public Accounts says Texas has no state income tax. Its history of the franchise tax quotes the constitutional rule that a tax on the net income of natural persons needs statewide voter approval.
The Comptroller’s 2008-09 revenue estimate says “Beginning in calendar 2005, the state inheritance tax ceased to be levied” and “Texas no longer imposes a tax on estates”. That is an older document and was not re-checked for 2026.
Federal income tax on the withdrawal is separate and is covered in the 10-year rule section below.
The federal 10-year rule and your Texas tax year
IRS Publication 590-B says a beneficiary may be required to take the entire account balance by the “end of the 10th year following the year of the owner’s death”, with exceptions for certain beneficiaries. Because the balance generally has to come out within that window, the timing of each withdrawal decides which tax year it lands in. See the 10-year rule and annual RMDs, lump sum versus spreading withdrawals and inherited IRA rules.
Withholding and other state taxes
Whether a state withholds from a withdrawal is a separate rule: see state withholding on retirement withdrawals. For Texas’s own death taxes, see Texas inheritance tax.
What the documents do not say
- The documents read do not mention inherited accounts or beneficiaries of retirement accounts.
- The Texas statute site is a JavaScript shell and could not be archived, so no statute section is cited.
Common mistakes
- Assuming Texas’s rule for your own retirement income also covers an account you inherited: read whether its documents address beneficiaries, and confirm the point with a Texas preparer.
Related: state tax on inherited IRA withdrawals, state by state, whether Texas taxes 401(k) and IRA withdrawals, Texas retirement taxes, Texas inheritance tax, inherited IRA rules, spouse versus non-spouse beneficiary rules, and state withholding on retirement withdrawals.
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Answer againSources
- Texas is open for small business: https://comptroller.texas.gov/economy/fiscal-notes/industry/2025/small-biz-info/
- The History of the Texas Franchise Tax: https://comptroller.texas.gov/economy/fiscal-notes/archive/2015/may/franchisetax.php
- Biennial Revenue Estimate, 2008-2009: Available Revenue: https://comptroller.texas.gov/transparency/reports/biennial-revenue-estimate/2008-09/available-revenue.php
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/pub/irs-pdf/p590b.pdf
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.