Tool | September 2016

State-by-State Guide to Taxes on Retirees

Our comprehensive guide to taxes on retirement income, property and purchases, as well as special tax breaks for seniors, in every state.


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The Bottom Line
Map of Louisiana

Most Tax-Friendly

One of Kiplinger's top ten most tax-friendly states for retirees, the Pelican State offers a bayou full of tax breaks to retirees. Social Security, military, civil-service, and state and local government pensions are exempt from state income taxes. Up to $6,000 per person of pension and annuity income are exempt from income taxes. Personal income tax rates are low. Louisiana has some of the lowest property taxes in the nation.

State Sales Tax

4%. Local parishes and jurisdictions within those parishes may add their own sales taxes, which can boost the total to 11%, but the average in the state is an additional 5%. Food, drugs, wheelchairs and prosthetic devices are taxed locally. Electricity and water utility services are taxed at 3.8%. Interstate telecommunication services are taxable at 2%.

Income Tax Range

Low: 2% (on $12,500 or less of taxable income for individuals, $25,000 for joint filers)

High: 6% (on more than $50,000 of taxable income; $100,000 for joint filers). Residents can deduct all of their federal income tax from state taxable income.

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Single filers 65 or older may exclude up to $6,000 of annual retirement income (including IRA distributions, private pension and annuity income) from their taxable income, while married joint filers 65 or older may exclude up to $12,000. Railroad Retirement benefits are not taxed. In addition, deferred income from municipal and state police employees’ retirement plans is exempt from state income tax.


Qualifies for retirement-income exclusion of up to $6,000 for single filers ($12,000 for joint filers).

401(k)s and Other Defined-Contribution Employer Retirement Plans

Qualifies for retirement-income exclusion of up to $6,000 for single filers ($12,000 for joint filers).

Private Pensions

Qualifies for retirement-income exclusion of up to $6,000 for single filers ($12,000 for joint filers).

Public Pensions

Federal retirement benefits, both military and nonmilitary, and state government pensions are exempt.

Property Taxes

Homeowners receive a homestead exemption of $7,500 of their home's assessed value. However, this exemption does not generally apply to municipal taxes. Median property tax on Louisiana's median home value of $140,300 is $714, according to the Tax Foundation, according to the Tax Foundation.

Tax breaks for seniors: Homeowners who are 65 or older with adjusted gross income of less than $71,563 in 2015 can benefit from freezing the assessed value of their homestead for as long as the applicant owns and resides in the home and income does not exceed the maximum allowed. This benefit is lost if improvements in excess of 25% of the home's value are added.

Inheritance and
Estate Taxes

There is no inheritance tax or estate tax.