Families of the Lower Valley
Brownsville households include teachers and school staff, port and shipyard workers, construction crews on the LNG site, engineers and technicians in the space industry, retail workers and many families with relatives and property across the river in Matamoros. Texas has no income tax, so the federal return is the main filing. BOMCAS prepares personal returns for Brownsville residents remotely.
Homestead and community property basics for all Texans are on the Texas personal tax page; this page covers Brownsville families.
Earned Income and Child Credits
Many Brownsville families qualify for the earned income credit and the child tax credit, which is $2,200 per qualifying child for 2025. Both depend on valid identification numbers and on where children lived during the year. Children who spent part of the year in Mexico with relatives may not meet the residency test, so details matter.
Travelling Construction Workers
Craft workers who came to Brownsville for the LNG project from other states receive per diem and travel pay. Per diem is not taxable when the job is temporary, meaning expected to last a year or less, and the worker keeps a tax home elsewhere. When a job is expected to last more than a year, the per diem becomes taxable wages. Workers who moved their families here are generally residents of Texas from the move.
Space-Industry Employees
Engineers and technicians working at the launch site often receive stock grants and options from their employer. Stock that vests is taxed as wages, and later sales need the right basis to avoid double tax. Employees who moved from California or other income tax states may still owe that state tax on part of stock earned there.
Teachers and School Staff
Brownsville ISD and other district employees belong to the Teacher Retirement System of Texas. Teachers can deduct up to $300 of classroom expenses, and 403(b) and 457 plans reduce taxable income.
Living on One Side, Working on the Other
Some U.S. citizens and residents live in Brownsville and work for maquiladoras in Matamoros; others live in Matamoros and work in Brownsville. Citizens and residents are taxed on worldwide income. Someone whose home and family are in Brownsville cannot claim the foreign earned income exclusion on Mexican wages, because the exclusion requires a tax home abroad and a home in the United States rules it out. They rely on foreign tax credits for Mexican tax instead.
Students
Students at the University of Texas Rio Grande Valley and Texas Southmost College may claim the American opportunity credit, worth up to $2,500 a year for the first four years. Scholarships and grants are tax free when used for tuition and required fees, but amounts used for housing are taxable.
Homeowners and Storms
Homes in Brownsville face hurricane and flood risk. A personal casualty loss is deductible only when it results from a federally declared disaster, and only beyond insurance and the required thresholds. Disaster declarations also extend IRS deadlines for residents of covered areas.
Retirees
Retirees receive Social Security, pensions and IRA withdrawals, and those 65 or older can take an additional deduction of up to $6,000 each from 2025 through 2028. Mexican pensions received by residents are reported on the U.S. return.
What to Bring
- W-2s, 1099s and per diem records.
- Children's residence information.
- Stock plan statements.
- Mexican income and tax documents.
- Form 1098-T for students.
- Last year's return.
Brownsville Personal Tax Preparation Questions
Is my per diem on the LNG job taxable?
Not if the job is temporary and you keep a tax home elsewhere; it is if the job is expected to last more than a year.
Can I exclude my Mexican wages if I live in Brownsville?
Generally no. The foreign earned income exclusion is not available when your home is in the United States.
Can I claim a child who lived part of the year in Mexico?
It depends on the residency test for each credit.
Does Brownsville have a city income tax?
No.
Talk to BOMCAS About Personal Tax Preparation in Brownsville
Business owners need books and business returns first. Household help goes through payroll, a rental room may owe hotel tax, land sales are planning questions, missed years belong in back taxes and Mexican income in cross-border tax. Statewide guidance on business returns, sales and use tax, bookkeeping, payroll, tax planning, late filing and cross-border tax is on our Texas pages, which all branch from the Texas overview.
Bidding on work at the port, running a store on Elizabeth Street or sorting out income from both sides of the river? Let BOMCAS know what you need and we will explain what we would check first and what a quote involves. Reach us through the contact page or the form below, at 780-667-5250 or at info@bomcas.ca. The Brownsville overview lists every Brownsville service. This page is general information only and is not tailored advice.