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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 it has the fifth-lowest property taxes in the country. Retirees will pay income taxes on income from retirement savings accounts, though there is an exemption available. The state has high sales taxes.

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You will pay of Louisiana state taxes on your pre-tax income of
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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 %.
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    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 has 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. The state does not tax Social Security retirement benefits or income from public pensions and it has the fifth-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.

A financial advisor in Louisiana can help you plan for retirement and other financial goals. Financial advisors can also help with investing and financial plans, including taxes, homeownership, insurance and estate planning, to make sure you are preparing for the future.

Is Louisiana tax-friendly for retirees?

As is 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 private pensions, is taxed after a deduction of $6,000, which is available to all taxpayers 65 or older.. 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?

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?

Income from a 403(b), 401(k) or regular IRA is subject to the state income tax in Louisiana. 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 who are at least 65 years old can claim an exemption of $6,000 total per year on all retirement income. If your total retirement income 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%
$50,000+6.00%
Married, Filing Jointly
Louisiana Taxable IncomeRate
$0 - $25,0002.00%
$25,000 - $100,0004.00%
$100,000+6.00%
Married, Filing Separately
Louisiana Taxable IncomeRate
$0 - $12,5002.00%
$12,500 - $50,0004.00%
$50,000+6.00%
Head of Household
Louisiana Taxable IncomeRate
$0 - $12,5002.00%
$12,500 - $50,0004.00%
$50,000+6.00%

How high are property taxes in Louisiana?

Louisiana has the fifth-lowest average property tax rate in the country at just 0.53%. The typical homeowner in Louisiana pays just $919 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 $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 it does not affect actual tax rates.

Photo credit: ©iStock.com/Rauluminate

How high are sales taxes in Louisiana?

While the Louisiana state rate is among the lowest in the U.S. at just 4.45%, city and county rates average an additional 5.07%. That makes the average total rate 9.52%. This is the third-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 state income tax rates.

Louisiana does not have an estate or inheritance tax.