State-by-State Guide to Taxes on Retirees - Louisiana
Tool | November 2019

State-by-State Guide to Taxes on Retirees

Louisiana

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The Bottom Line
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Tax-Friendly

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, and what income still gets by faces fairly low rates. Property taxes are near the bottom for the U.S. But retirees will still face some of the country’s highest sales taxes on everything they buy, potentially including groceries, which are taxable in some localities.

State Sales Tax

4.45% state levy. Localities can add as much as 7%, and the average combined rate is 9.45%, according to the Tax Foundation. Groceries and prescription drugs are exempt from the state sales tax, but localities may tax these.

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).

Effective tax rate: 2.87% for single filers, 4.09% 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

Income from federal government, designated Louisiana state and local government, and military retirement plans is fully exempt.

Railroad Retirement benefits are also exempt.

In addition, taxpayers 65 and older can exclude up to $6,000 of other federally-taxable retirement income, including payments from private pensions, 401(k) plans and IRAs (up to $12,000 for joint filers).

Property Taxes

In Louisiana, residents pay an average of $555 in taxes per $100,000 of assessed home value.

Tax breaks for seniors: Homeowners who are 65 or older with adjusted gross income of less than $73,851 in 2018 can benefit from freezing the assessed value of their homestead. This benefit is lost if improvements in excess of 25% of the home’s value are added.

Vehicle Taxes

Louisiana’s 4% sales tax is due on purchases. Local sales taxes ranging from 1% - 5.5% can also apply.

Inheritance and Estate Taxes

None.

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