Texas · 401(k) Contribution
401(k) Contribution in Texas (2026)
Pre-tax 401(k) contributions reduce 2026 taxable wages up to the $24,500 employee deferral limit, with catch-up rules for eligible older workers. Texas has no state income tax, so a Texas filer's combined marginal rate on the next dollar at $67,321 of income is about 22% (22% federal).
2026 savings example for Texas
Planning estimate for a single filer earning $67,321 (Texas median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; TX tax uses the state brackets in LevyIO's dataset.
Estimated total savings
$682
Federal savings
$682
$5,981 → $5,299 · 22% bracket
TX state savings
$0
No state income tax
Combined marginal rate
22%
≈ $220 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $24,500.
Federal × Texas marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The TX column is the state marginal rate at the midpoint of each range (Texas has no income tax). The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | TX marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 0% | 10% | $100 |
| 12% | $28,500 - $66,500 | 0% | 12% | $120 |
| 22% | $66,500 - $121,800 | 0% | 22% | $220 |
| 24% | $121,800 - $217,875 | 0% | 24% | $240 |
| 32% | $217,875 - $272,325 | 0% | 32% | $320 |
| 35% | $272,325 - $656,700 | 0% | 35% | $350 |
| 37% | Over $656,700 | 0% | 37% | $370 |
Eligibility & forms
Employees with employer-sponsored 401(k) plans
- $24,500 employee elective deferral limit for 2026
- $32,500 total if age 50+ with regular catch-up
- $35,750 total if age 60-63 and the plan allows the higher catch-up
- Pre-tax contributions reduce taxable wages; Roth 401(k) contributions do not
Federal forms: W-2
Texas filing notes
No income tax saves significantly. High property taxes offset for homeowners. Texas offers residence homestead exemptions, additional age 65 or disabled exemptions, appraisal-value limits, and appraisal protest rights. Verify details with the county appraisal district.
Common mistakes: Not maximizing employer match; Over-contributing across multiple plans; Treating Roth 401(k) contributions as a current-year deduction; Ignoring payroll year-to-date deferrals after changing jobs.
Frequently asked questions
How much can the 401(k) Contribution save a Texas taxpayer in 2026?
In LevyIO's example, a single filer with $67,321 of income (the Texas median household income in our state dataset) who removes $5,000 from taxable income saves about $682 in 2026 federal tax (22% marginal bracket) and nothing at the state level because Texas does not tax wage income. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's TX bracket data, not a survey figure.
What is the Texas income tax rate for 2026?
Texas has no state income tax. The TX standard deduction in LevyIO's dataset is $0 single / $0 married. No income tax (constitutionally prohibited). Second-highest property taxes (1.68%). High sales tax.
Who qualifies for the 401(k) Contribution in Texas?
Employees with employer-sponsored 401(k) plans. The federal rules are the same in every state; the requirements are: $24,500 employee elective deferral limit for 2026; $32,500 total if age 50+ with regular catch-up; $35,750 total if age 60-63 and the plan allows the higher catch-up; Pre-tax contributions reduce taxable wages; Roth 401(k) contributions do not. Texas filers should confirm on the TX return whether the state follows the federal treatment.
Which forms do I file to claim the 401(k) Contribution?
Federal: W-2. Texas has no individual income tax return for wage income, so there is no state form to file for this item. Common mistakes: Not maximizing employer match; Over-contributing across multiple plans; Treating Roth 401(k) contributions as a current-year deduction; Ignoring payroll year-to-date deferrals after changing jobs.
401(k) Contribution in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.