Texas Does Not Tax Military Retired Pay or Any Individual Income

This entry exists to close a question rather than to describe a program. Texas does not levy a tax on the income of individuals. Military retired pay, a Survivor Benefit Plan annuity, VA disability compensation, VA pension, and Thrift Savings Plan distributions are therefore not taxed by Texas. There is no exclusion to claim, no cap, no residency election, and no form. The rule is constitutional, not merely a legislative choice. Proposition 4, approved by the voters on November 5, 2019, repealed Article VIII, Section 24 of the Texas Constitution and added Section 24-a, which reads that the legislature may not impose a tax on the net incomes of individuals, including an individual's share of partnership and unincorporated association income. Before 2019 the constitution allowed an individual income tax subject to a voter referendum. Now it forbids one outright. The practical consequence for a veteran comparing states is that Texas needs no equivalent of a military retirement exclusion, because there is no base to exclude from. A veteran moving from a state with a partial exclusion is not trading down. The constitution now closes the neighbouring doors too. Section 24-b, added November 4, 2025, forbids a tax on the realized or unrealized capital gains of an individual, family, estate or trust; section 25 (2023) forbids a wealth tax; and section 26 forbids a new state estate, inheritance or death tax. A veteran's investment gains and estate are as untouched by Texas as the retired pay. Texas raises revenue through sales and use tax, the franchise tax on business entities, severance taxes, and local property tax. Property tax is where the veteran-specific relief lives in Texas, and it is substantial. Read the property tax exemption entries for that.