What Is the Louisiana Income Tax Rate?
Unravel Louisiana's individual income tax system. This guide clarifies how state income is taxed, helping residents understand their obligations.
Louisiana imposes a state income tax on individuals, including residents and non-residents who earn income within its borders. This guide clarifies the tax rates, how taxable income is determined, and the process for calculating your final tax liability in Louisiana.
Louisiana Individual Income Tax Rates
For the 2024 tax year, Louisiana employs a progressive individual income tax system with three distinct tax brackets. A progressive system means higher income portions are taxed at higher rates. For single filers or those married filing separately, income up to $12,500 is taxed at 1.85%, income between $12,501 and $50,000 is taxed at 3.5%, and income exceeding $50,000 is taxed at 4.25%.
For married couples filing jointly or those filing as head of household, the income thresholds are doubled. Income up to $25,000 is taxed at 1.85%, income between $25,001 and $100,000 is taxed at 3.5%, and income over $100,000 is taxed at 4.25%. Louisiana is transitioning to a flat income tax rate of 3% starting January 1, 2025, which applies to income earned in 2025 and is reflected in tax returns filed in 2026.
Determining Louisiana Taxable Income
Louisiana’s income tax calculation begins with your federal adjusted gross income (AGI). From this, specific additions and subtractions are made to arrive at your Louisiana taxable income. One significant adjustment is the deduction for federal income taxes paid. This deduction was repealed by Act 395 of the 2021 Regular Session, effective December 31, 2021.
Taxpayers can also reduce their gross income through either a standard deduction or itemized deductions. For the 2024 tax year, the standard deduction is $4,500 for single filers with two or fewer exemptions and $9,000 for married filing jointly with two or fewer exemptions. These amounts are set to significantly increase for the 2025 tax year, to $12,500 for single filers and $25,000 for married filing jointly or head of household. Louisiana also permits deductions for personal and dependent exemptions, which further lower taxable income.
Calculating Your Louisiana Income Tax
Once your Louisiana taxable income is determined, apply the applicable tax rates to calculate your tax liability before credits. For the 2024 tax year, you would apply the progressive rates to the corresponding portions of your income based on your filing status. For instance, a single filer with $30,000 in taxable income would pay 1.85% on the first $12,500 and 3.5% on the remaining $17,500.
After calculating the tax, various state tax credits can reduce your final tax bill. Louisiana offers credits such as the Earned Income Tax Credit (EITC), which is 5% of the federal credit, and a Child and Dependent Care Tax Credit (CDCTC), which is 50% of the federal credit for lower incomes and a reduced percentage for higher incomes. School Readiness Tax Credits are also available for child care expenses, which vary based on the quality rating of the child care facility. Taxpayers may also have amounts withheld from their paychecks or make estimated tax payments throughout the year to cover their tax obligations.