How Louisiana taxes retirement income

Some 2026 figures pending confirmation Tax year 2026 · research last updated October 3, 2026

Louisiana doesn't tax Social Security benefits.
Exclusions and subtractions for retirement income (details below):
- Annual retirement income exemption, age 65+: from age 65, at most $12,324 per person.
- Government retirement benefits fully exempt.
Rates for 2026: 3% flat rate.

At a glance

Income tax	Yes
Rates (2026)	3% flat rate
Starts from	Federal adjusted gross income (AGI)
Standard deduction	$12,838 single, $25,675 married filing jointly
Social Security	Not taxed
Retirement income exclusions	2 (see below)
Roth conversions	Taxable
Capital gains	Taxed like other income
Local income tax	None

Louisiana doesn't tax Social Security benefits.

Pensions, IRAs and 401(k)s

Annual retirement income exemption, age 65+ (Schedule E code 06E)

Age: 65+ · Limit: $12,324 per person · Applies to: pensions, annuities, IRA distributions

Up to $12,324 (2026, inflation-adjusted from $12,000 in 2025) per individual 65 or older of 'annual retirement income' = pension, annuity and IRA distributions reported on federal 1040 lines 4b and 5b, excluding amounts already exempted as government retirement (codes 02E-05E). Only the plan participant / named annuitant / named IRA payee receives the income (non-participant spouse gets nothing; surviving spouse receiving survivor benefits qualifies). On a joint return each spouse 65+ with their own retirement income gets their own cap. Social Security does not reduce the cap.

Government retirement benefits fully exempt (codes 02E-05E)

Applies to: louisiana state employees (lasers), louisiana teachers (trsl), federal retirement (civil service, military), other listed louisiana public retirement systems

Benefits from these systems are exempt in full regardless of age and are excluded from the 06E computation.

Roth conversions

A Roth conversion counts as taxable income for Louisiana. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

Taxed like other income, at the rates above. A net capital gain deduction for sale of a Louisiana-domiciled nonpublic business applies only to installment/perfected sales before Jan. 1, 2025.

More detail from our research notes

Act 11 of the 2024 Third Extraordinary Session (effective 2025): flat 3% rate; standard deduction $12,500 single/MFS and $25,000 (200%) for MFJ, QSS and HOH, indexed by CPI-U beginning Jan. 1, 2026 (R.S. 47:294); the $1,000 additional exemptions for 65+, blind and dependents repealed; 65+ retirement exemption raised from $6,000 to $12,000 and indexed (R.S. 47:44.1). Louisiana taxable income = federal AGI - Schedule E exemptions (Social Security taxable portion 07E, government pensions, 06E retirement exemption, etc.) - standard deduction - excess federal itemized medical deduction. Itemizing as such is not allowed: if the taxpayer itemized federally, only the federal medical/dental deduction in excess of the federal standard deduction amount (2025: $15,750 single/MFS, $31,500 MFJ/QSS, $23,625 HOH) is deductible (IT-540 lines 9A-9D). IT-540 line 11: tax = line 10 x 3%, rounded to the nearest dollar. Louisiana is a community property state: on MFS returns, community retirement income is split but only the named recipient can claim 06E. No local income taxes (LDR fiscal note: local governments do not levy income taxes). Roth conversions: a conversion is an IRA distribution reported on federal line 4b, and the instructions define annual retirement income as 'any distributions from ... an individual retirement arrangement (IRA)' reported on lines 4b and 5b, so it appears to qualify for 06E; LDR has not addressed conversions explicitly.

Pending confirmation

These points were still being confirmed against Louisiana's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

5 items

2026 standard deduction: official indexed amounts not found. $12,838 / $25,675 are COMPUTED as $12,500 / $25,000 x 1.027 (the CPI factor implied by LDR's published 2026 retirement exemption $12,324 = $12,000 x 1.027), rounding unknown. LDR withholding tables (RIB 26-005) used $12,875 / $25,750 based on CPI data as of Dec. 1, 2025, and state the official amounts may differ. Re-checked 2026-10-02: the 2026 IT-540ESi (Dec 2025) also prints the withholding amounts $12,875 / $25,750, and no LDR posting of the final 2026 amounts was found. Confirm on the 2026 IT-540 instructions (expected December 2026-January 2027, https://revenue.louisiana.gov/tax-forms/). Money at stake is small: $37 / $75 of deduction x 3% = about $1-2.
Age test timing (65 by Dec. 31 of tax year) assumed from the IT-540 age-designation box; not stated explicitly in sources reviewed.
Roth conversion eligibility for the 06E exemption is inferred from the instruction wording, not an explicit ruling.
Excess-medical itemized threshold for 2026 will use 2026 federal standard deduction amounts.
Full list of exempt Louisiana public retirement systems (05E) and military retirement treatment not captured.

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

2026 IT-540ESi (created Dec 3 2025): worksheet line 3 standard deduction $12,875 single/MFS, $25,750 MFJ/HOH/QSS (same as the withholding amounts; not the final indexed return amounts). Local copyhttps://dam.ldr.la.gov/taxforms/IT540ESi-2026.pdf
2027 check: 2025 HB 667 (2.75% rate and 65+ deduction from 2027) died pending Senate Revenue and Fiscal Affairs; 2026 rate-cut bills (HB 411, HB 898, HB 1122) died in House Ways and Means. Local copieshttps://legis.la.gov/legis/BillInfo.aspx?s=25RS&b=HB667
2025 IT-540 instructions, lines 9A-9D: federal itemizers deduct federal Sch. A line 4 over the federal basic standard deduction ($15,750/$31,500/$23,625) (research/states/itemized.json); 2025 IT-540 instructions: line 8 standard deduction, lines 9A-9D excess medical, line 11 x .03, Schedule E codes 02E-07E and 06E worksheethttps://dam.ldr.la.gov/taxforms/IT540i-WEB-2025-Revised-7-26.pdf
Act 11 summary: flat 3%, standard deduction $12,500/$25,000 indexed from 2026, 65+ exemptions repealed, retirement exemption $12,000 indexed (RIB 25-012)https://dam.ldr.la.gov/lawspolicies/RIB-25-012-Louisiana-Individual-Income-Tax-Reform-1.pdf
2026 inflation-adjusted retirement exemption $12,324; only the recipient may claim (proposed LAC 61:I.1311)https://dam.ldr.la.gov/lawspolicies/NOI
Withholding-table standard deduction $12,875/$25,750 for 2026 (not the official return amount)https://dam.ldr.la.gov/lawspolicies/RIB
R.S. 47:294 standard deduction and CPI-U indexinghttps://legis.la.gov/legis/Law.aspx?d=101761
R.S. 47:44.1 annual retirement income exemption definitionhttps://legis.la.gov/Legis/Law.aspx?d=102133
Existing LAC 61:I.1311: IRA/annuity/pension recipient rules, surviving spouse survivor benefitshttps://dam.ldr.la.gov/lawspolicies/LAC61_I_1311.pdf
Final rule LAC 61:I.1311, LR 52:1512 (La. Register Sept 20, 2026): 2026 inflation-adjusted retirement exemption $12,324 (codified )https://www.doa.la.gov/media/yk4houdl/2609.docx

Taxtirement's Louisiana calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

See your own years. Taxtirement applies these Louisiana rules, and the federal and Medicare rules, to your household for every year of retirement, and shows the calculation behind each number. Coming November 2026 for iPhone, iPad and Mac.

This page summarizes Louisiana's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.