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Louisiana Retirement Tax Friendliness

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Overview of Louisiana Retirement Tax Friendliness

Louisiana does not tax Social Security retirement benefits or income from public pensions and has the third lowest property taxes in the country. Retirees will pay income taxes on income from retirement savings accounts. The state has a high sales tax.

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Annual Social Security Income
Annual Retirement Account Income
Annual Wages
Year of Birth
Filing Status
Annual Income from Private Pension
Annual Income from Public Pension
You will pay of Louisiana state taxes on your pre-tax income of
Your Tax Breakdown
Total Taxes
Quick Guide to Retirement Income Taxes
is toward retirees.
Social Security income is taxed.
Withdrawals from retirement accounts are taxed.
Wages are taxed at normal rates, and your marginal state tax rate is %.
  • Our Tax Expert

    Jennifer Mansfield, CPA Tax

    Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.

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Louisiana Retirement Taxes

Photo credit: ©iStock.com/omersukrugoksu

Louisiana is the 25th largest U.S. state, with a total population of nearly 4.7 million people. Its culture is unique among U.S. states, with strong African, French, Spanish and Native American influences. Likewise, its geography is unlike that of any other region of the U.S., as much of the state’s surface area is a part of the Mississippi River Delta.

Seniors who are moving to (or staying in) Louisiana for retirement will face a relatively friendly tax environment for retirees. The state does not tax Social Security retirement benefits or income from public pensions and has the third lowest property taxes in the country. At the same time, retirees may feel the sting of paying a high sales tax and income taxes on income from retirement savings accounts.

Is Louisiana tax-friendly for retirees?

Yes. Mostly. As mentioned above, Social Security retirement benefits are exempt from the state income tax, as is income from a public pension. Other forms of retirement income, including income from non-public pensions, is taxed after a deduction of $6,000. While sales taxes in the Bayou State are quite high, property taxes are very low. Louisiana has no estate or inheritance tax.

Is Social Security taxable in Louisiana?

No. The state of Louisiana does not tax Social Security income. Social Security retirement benefits earned by Louisiana residents may still be subject to federal income taxes, however.

Are other forms of retirement income taxable in Louisiana?

Yes. Income from a 403(b), 401(k) or regular IRA is subject to the state income tax. Income from a public pension such as a state teacher’s retirement system or the Federal Employees Retirement System pension is exempt but non-public pension income is not.

Taxpayers can claim an exemption of $6,000 total per year on all retirement income. If your total retirement income (from taxable sources) is under $6,000 you won’t pay taxes on any of it. Any income over that limit will be subject to the Louisiana income tax. The table below shows rates and brackets for the state income tax in Louisiana.

Income Tax Brackets

Single Filers
Louisiana Taxable IncomeRate
$0 - $12,5002.00%
$12,500 - $50,0004.00%
Married, Filing Jointly
Louisiana Taxable IncomeRate
$0 - $25,0002.00%
$25,000 - $100,0004.00%
Married, Filing Separately
Louisiana Taxable IncomeRate
$0 - $12,5002.00%
$12,500 - $50,0004.00%
Head of Household
Louisiana Taxable IncomeRate
$0 - $12,5002.00%
$12,500 - $50,0004.00%

How high are property taxes in Louisiana?

Extremely low. Louisiana has the third lowest average property tax rate in the country at just 0.51%. The typical homeowner in Louisiana pays just $750 annually in property taxes, a fraction of the amount paid by homeowners in most states.

What is the Louisiana homestead exemption?

The Louisiana homestead exemption is a form of property tax relief available to any Louisiana resident who owns and occupies his or her home. It exempts the first $75,000 in home value (or $7,500 in assessed value) from property taxes.

Senior homeowners may also be eligible for the senior citizens assessment freeze. Persons age 65 and older, with total household income of $71,491 or less can claim the assessment freeze. The freeze prevents any increases in a property’s assessed value but does not affect tax rates.

Photo credit: ©iStock.com/Rauluminate

How high are sales taxes in Louisiana?

Quite high. While the state rate is just 5%, among the lowest in the U.S., city and county rates average nearly 5%. The average total rate is 9.9%. This is the highest in the U.S. While groceries and prescription drugs are exempt from the state tax, they may be subject to local tax rates, depending on whether the local government has decided to exempt them.

What other Louisiana taxes should I be concerned about?

Most capital gains are subject to the Louisiana state income tax. They are taxed at the rates shown in the bracket table above. So, for example, if you have invested in the stock market or in real estate and plan to sell those investments for additional income during retirement, any gains on those sales will be taxed at the state income tax rates.

Louisiana does not have an estate or inheritance tax.

Most Tax Friendly Places for Retirees

SmartAsset’s interactive map highlights the places in the country with tax policies that are most favorable to retirees. Zoom between states and the national map to see the most tax-friendly places in each area of the country.

Rank City Income Tax Paid Property Tax Rate Sales Tax Paid Fuel Tax Paid Social Security Taxed?

Methodology To find the most tax friendly places for retirees, our study analyzed how the tax policies of each city would impact a theoretical retiree with an annual income of $50,000. Our analysis assumes a retiree receiving $15,000 from Social Security benefits, $10,000 from a private pension, $10,000 in wages and $15,000 from a retirement savings account like a 401(k) or IRA.

To calculate the expected income tax this person would pay in each location, we applied the relevant deductions and exemptions. This included the standard deduction, personal exemption and deductions for each specific type of retirement income. We then calculated how much this person would pay in income tax at federal, state, county and local levels.

We calculated the effective property tax rate by dividing median property tax paid by median home value for each city.

In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a city by the household income after subtracting income tax. This product is then multiplied by 35% to estimate the sales tax paid.

For fuel taxes, we first distributed statewide vehicle miles traveled to the city level using the number of vehicles in each county. We then calculated miles driven per capita in each city. Using the nationwide average fuel economy, we calculated the average gallons of gas used per capita in each city and multiplied that by the fuel tax.

For each city we determined whether or not Social Security income was taxable.

Finally, we created an overall index weighted to best capture the taxes that most affect retirees. The income tax category made up 40% of the index, property taxes accounted for 30%, sales taxes 20% and fuel taxes 10%.

Sources: Internal Revenue Service, Social Security Administration, state websites, local government websites, US Census Bureau 2018 American Community Survey, Avalara, American Petroleum Institute, GasBuddy, UMTRI, Federal Highway Administration