Texas Self-Employment Tax: A 2026 Filing Guide for Freelancers

This page covers what that means for 1099 income. Every figure is traced to the Texas Comptroller of Public Accounts.

Tax year note. Texas publishes no state income tax rate table, because it has no state personal income tax — so there is nothing on the income-tax side to wait for. The franchise figures below are for the 2026 and 2027 report years. Where this cluster cites another state's income tax rates, those come from the published tax year 2025 tables; none of those states has released a 2026 tax-year table yet.

Does Texas have a state income tax?

No. Texas does not have a personal income tax, so a self-employed Texan pays no state income tax on business profit. The Comptroller states the position directly:

That sentence carries two separate facts. The first is that Texas has no personal income tax. The second is that sole proprietorships — the default legal form for a solo freelancer — are completely exempt from the state's business tax.

If you live in Texas, this is the simplest possible state answer: no state income tax return, no state quarterly schedule, no state income tax bill. The one wrinkle is a move: if you became a Texas resident partway through the year, your former state may still tax income you earned while you were a resident there. The Texas advantage starts when your residency does.

Texas income tax rate for self-employed filers

Not applicable. Because Texas has no personal income tax, there is no state rate schedule for self-employed filers — no brackets, no top marginal rate, nothing to look up.

The mistake is treating "no income tax" as "no tax." Texas still collects other state taxes that can reach a freelancer:

• Franchise (margin) tax, if your business grows past the exemption described below.
• Sales tax, plus a permit, if you sell taxable goods or services.
• The federal self-employment tax, which applies regardless of state.

The federal layer is identical everywhere in the country, and it is the largest single tax most freelancers pay. It works out to a 15.3% rate on net profit — 12.4% for Social Security plus 2.9% for Medicare — applied to 92.35% of net earnings, for an effective rate near 14.1%. An additional 0.9% Medicare tax applies above $200,000 (single), above $250,000 (joint), or above $125,000 (married filing separately), and the 2026 Social Security wage base is $184,500. The self-employment tax guide covers how these pieces stack, and the self-employment tax calculator will run your own numbers.

When you have to file and when you must prepay

There is no Texas individual income tax return, so there is no state income tax filing threshold and no state prepayment requirement. What can still apply is the franchise tax.

Franchise (margin) tax. For the 2026 and 2027 report years, a business owes no franchise tax if its total revenue is at or below the $2,650,000 "No Tax Due" threshold. Above it, the tax is computed on taxable margin, with rates of 0.375% for retail and wholesale businesses and 0.75% for all others. Two further parameters shape the base: a compensation deduction cap of $480,000, and an EZ Computation option for qualifying small businesses, available up to $20 million in total revenue, using a 0.331% rate.

Sole proprietorships are a special case. A sole proprietorship is completely exempt from the Texas franchise tax, so an unincorporated solo freelancer does not owe it. The franchise tax becomes relevant mainly to freelancers who have formed a taxable entity — an LLC taxed as a corporation, an S-corporation, or similar — not to an unincorporated solo operator.

A quick example. Renée runs a solo consulting practice in Dallas as a sole proprietorship, so she files no Texas franchise report. If she reorganized as an S-corporation to trim federal self-employment tax, that exemption would end and the franchise tax could apply — a trade-off worth pricing out before switching entities.

Annual franchise report. When the tax does apply, the annual franchise report is due May 15 each year.

Sales tax permit. If you sell taxable goods or services in Texas, you must obtain a sales tax permit from the Comptroller and remit sales tax. This is a registration and collection obligation, separate from any income tax.

If your income arrives partly through online platforms, it is worth knowing which form you should receive; the 1099-NEC vs 1099-K guide covers that split.

Texas estimated tax due dates

Not applicable. Because Texas has no personal income tax, there are no state quarterly estimated tax installments. The four-installment system that California, New York, New Jersey, and Massachusetts run does not exist in Texas. The nearest parallel is the annual franchise report due May 15, and that applies only to businesses above the exemption.

You still have federal quarters to manage, and the federal schedule does not disappear just because the state one does. The quarterly estimated tax guide covers the federal dates and how to size each payment.

Local taxes

This page covers state-level taxes only. It does not cover any city, county, or district tax that may apply to you — verify locally with the relevant authority.

The local taxes most likely to touch a Texas freelancer are local sales taxes, which cities, counties, and special districts can add on top of the state sales tax rate. Those are consumption taxes on what you buy and sell, not income taxes on what you earn, so they sit outside this page's scope. For the local income-tax regimes covered elsewhere on this site — New York City, Yonkers, the MCTMT, and San Francisco — see the state tax hub.

Where these numbers come from

• Texas Comptroller of Public Accounts — no personal income tax — confirmation that Texas has no personal income tax and that sole proprietorships are exempt from franchise tax
• Texas Comptroller of Public Accounts — Franchise Tax — the $2,650,000 No Tax Due threshold, the 0.375% and 0.75% rates, the $480,000 compensation cap, and EZ Computation
• Texas Comptroller of Public Accounts — Sales Tax Permit — the sales tax permit requirement

No state income tax for tax years 2025–2026; franchise figures for the 2026 and 2027 report years. Last verified September 2026.