Oklahoma vs Texas: Taxes & Take-Home Pay 2026

Neighbours across the Red River

The direct answer: Texas does not tax wages, and Oklahoma's 2026 schedule tops out at 4.50%, so moving south of the Red River raises take-home pay. Oklahoma has lower property taxes and cheaper housing in most markets, which is why many households near the border live in one state and shop, work or own land in the other.

The pair comes up for oil and gas workers, military families at Fort Sill in Oklahoma and Sheppard Air Force Base in Texas, commuters in the Texoma area around Durant, Denison and Sherman, and Oklahoma City or Tulsa residents offered jobs in Dallas-Fort Worth.

Oklahoma's new three-rate schedule

For 2026 Oklahoma replaced six brackets with three rates and cut the top rate from 4.75% to 4.50%. The first $3,750 of taxable income ($7,500 joint) is taxed at 0%, then:

• Standard deduction: $6,350 single, $12,700 joint, $9,350 head of household.
• Personal and dependent exemptions: $1,000 each.
• Because the top rate starts at just $7,200 of taxable income, almost every full-time Oklahoma worker pays 4.50% on most of their income.

Worked examples

A single Oklahoman earning $65,000 owes $2,380 of state income tax, 3.66% of gross pay. A married couple with two children on $90,000 owes $2,869 after the joint standard deduction and four $1,000 exemptions. In Texas both households keep that money, since neither state has employee-paid payroll programs.

Those figures leave out Oklahoma's earned income credit, child tax credit and sales tax relief credit, which lower the bill for lower-income families.

Groceries and sales tax

Oklahoma has charged no state sales tax on food and food ingredients since August 29, 2024, when HB 1955 cut the state grocery rate from 4.50% to 0%. City and county taxes still apply to groceries. On everything else, Oklahoma's 4.50% state rate plus local add-ons averaging 4.56% produce an average combined rate of 9.06%, above Texas's 8.20%. Some Oklahoma cities reach 11.50%; Texas caps out at 8.25%.

Texas's lower combined rate plus no income tax is partly paid for through property tax. Texas school districts must exempt $140,000 of a homestead's value, and $60,000 more for owners 65+ or disabled, but local rates on the rest are among the highest in the country. Oklahoma's property taxes are comparatively low.

Retirement income: Oklahoma's exclusions

Oklahoma is friendlier to retirees than its rate suggests. On Schedule 511-A it subtracts Social Security in full and excludes 100% of military retirement pay. Other retirement income, including Oklahoma government pensions, private pensions, IRAs and 401(k) plans, can be excluded up to $10,000 per person.

Example: a single 66-year-old with Social Security and $40,000 of pension income would have about $22,650 of Oklahoma taxable income after the $10,000 exclusion, standard deduction and personal exemption, for roughly $805 of tax. In Texas the tax is zero, but a retiree with a large paid-off house may pay more than that in Texas property tax.

A checklist for Texoma households

Families near the border often split their lives between the two states. These are the points that most often change the tax result:

• Where you live decides income tax. An Oklahoma address means Oklahoma tax on every dollar of wages, even if every workday is in Texas.
• Where you work matters only for Texans working in Oklahoma, who owe Oklahoma tax on those wages once Oklahoma-source income reaches $1,000.
• Where you shop decides sales tax. A $1,000 purchase costs about $91 in tax at Oklahoma's average rate and $82 at Texas's, but groceries carry no Oklahoma state tax.
• Where you own a home decides property tax, and Texas bills are usually higher for the same value even after the homestead exemptions.
• Retirees with pensions under the $10,000 Oklahoma exclusion and Social Security often owe Oklahoma little or nothing, which removes Texas's main advantage.

Commuting across the border and moving mid-year

There is no reciprocity agreement to worry about, because Texas has no income tax. An Oklahoma resident who works in Texas pays Oklahoma tax on all wages and gets no credit, since no tax was paid to Texas. A Texas resident who works in Oklahoma owes Oklahoma tax on that Oklahoma-source income and files Form 511-NR once Oklahoma-source gross income reaches $1,000.

The year you move, file Oklahoma Form 511-NR as a part-year resident, reporting all income while you lived in Oklahoma plus Oklahoma-source income afterwards. Resident returns are due April 15, or April 20 if filed electronically; a valid federal extension also extends the Oklahoma filing date if no Oklahoma tax is owed (otherwise request one on Form 504-I), and at least 90% of the tax must be paid by the original due date to avoid a late-payment penalty.