⭐ Texas — No State Income Tax

Texas SCHD Dividend Calculator

Calculate your SCHD dividend returns in Texas — one of nine states with no state income tax. See exactly how much more you keep when 0% of your dividends go to the state.

Top State Tax Rate

Starting Rate

Tax Structure

8 Brackets

Total Tax Rate

15%*

*Combined federal (15%) + Texas (0% top)

💰 Calculate Your Texas SCHD Returns

Initial Investment ($)

Monthly Contribution ($)

Investment Period (Years)

SCHD Dividend Yield (%)

Annual Dividend Growth (%)

Reinvest Dividends?

Your Texas After-Tax Projections

Total Portfolio Value

Total Dividends Earned

After TX Tax (0%)

TX State Tax Paid

Year-by-Year Breakdown

Year	Portfolio Value	Annual Dividends	TX State Tax (0%)	After-Tax Income

Understanding Texas State Tax on SCHD Dividends

Texas Has No State Income Tax

Texas is one of nine U.S. states with no state income tax. Your SCHD dividends are not taxed at the state level at all — there are no state brackets, no state rate, and nothing to file for dividend income in Texas. The only tax on your SCHD dividends is federal.

What This Means for SCHD Investors

0% state tax: You keep 100% of your SCHD dividends at the state level.
Federal only: Most SCHD distributions are qualified dividends, taxed at the lower federal long-term capital-gains rates (0%, 15%, or 20% by income).
Example: On a $100,000 SCHD position generating roughly $3,300 in annual dividends, a Texas resident pays $0 in state tax — versus about $438 in California (13.3%) or $360 in New York (10.9%).
No local income tax: Texas cities and counties do not levy a local income tax either.

The Trade-off: Texas's Other Taxes

Texas funds its budget through other means, so weigh these before relocating purely for dividend taxes:

Property tax: Among the highest in the nation (effective rates around 1.6–1.8%).
Sales tax: A 6.25% state rate, up to ~8.25% with local add-ons.
No bracket management: Unlike high-tax states, there is no state income bracket to plan your dividends around.

Tax Optimization for Texas Investors

Roth IRA: Removes the remaining federal tax — fully tax-free SCHD growth and withdrawals.
Traditional IRA / 401(k): Defers federal tax until retirement (state tax is already 0% in Texas).
Tax-loss harvesting: Offsets capital gains to reduce your federal bill.
Taxable accounts are friendlier here: With no state tax, holding SCHD in a taxable brokerage costs less in Texas than in income-tax states.

Texas vs High-Tax States — State Tax on SCHD Dividends

State tax on $100,000 of SCHD generating about $3,300 in annual dividends:

Texas: $0 (no state income tax)
Florida: $0 (no state income tax)
Illinois (4.95% flat): about $163
New York (10.9% top): about $360
California (13.3% top): about $438

Bottom line: Texas is one of the most tax-efficient states for dividend investors — you pay $0 state tax on SCHD income. Just weigh the trade-off of higher property and sales taxes when comparing an overall move.

Frequently Asked Questions

What is Texas's state tax rate on SCHD dividends?

Texas has no state income tax. SCHD dividends are not taxed at the state level in Texas, so the only tax on your dividend income is federal — you keep 100% of your dividends at the state level.

Are SCHD dividends taxed differently in Texas?

Texas has no state income tax at all, so SCHD dividends face zero state tax regardless of the amount. Only federal tax applies, and most SCHD distributions are qualified dividends taxed at the lower federal long-term capital-gains rates.

How much will I pay in Texas state tax on SCHD dividends?

On a $100,000 SCHD investment generating $3,324 in annual dividends, Texas residents typically pay $0 in state tax (0% top rate) - a moderate and competitive burden for the Southern region.

Does Texas offer retirement income exemptions for dividends?

Texas has no state income tax, so there is nothing to exclude — all income, including SCHD dividends, brokerage gains, pensions, and retirement-account distributions, is completely free of Texas state tax.

Should I hold SCHD in a taxable or retirement account in Texas?

Because Texas has no state income tax, your SCHD dividends are taxed only at the federal level (about 15% for most investors). A Roth IRA still adds value by removing that federal tax too, but Texas residents already enjoy a 0% state rate in any account type.

Is Texas a tax-friendly state for dividend investors?

Texas is one of the most tax-friendly states in the country for dividend investors: it has no state income tax at all, so 100% of your SCHD dividends are free of state tax. (Texas does have higher property and sales taxes, worth factoring into any relocation decision.)

What's the total tax rate on SCHD dividends in Texas?

For most investors: 15% federal qualified dividend rate + 0% Texas top state tax = 15% total. High earners pay 20% federal + 0% state = 20% total - competitive for the Southern.