What is the Louisiana state income tax rate for 2025?

Louisiana has a NEW flat income tax rate of 3.0% for 2025. This is a MAJOR CHANGE from the previous progressive system (1.85%/3.5%/4.25% brackets). Louisiana now has the 2nd-lowest income tax in the U.S. (tied with Indiana), behind only Arizona at 2.5%.

When did Louisiana change to a flat tax?

Louisiana's flat tax took effect January 1, 2025. This was a major tax reform that eliminated the progressive bracket system in favor of a simple 3% rate on all income. The reform also increased the standard deduction to $12,500 (single) and $25,000 (married).

What was Louisiana's previous tax structure?

Before 2025, Louisiana had a progressive 3-bracket system: 1.85% (up to $12.5k single), 3.5% ($12.5k-$50k), and 4.25% (over $50k). High earners saw the biggest tax cut - someone making $100k paid $3,525 in 2024 vs $3,000 in 2025 (saves $525).

Does Louisiana tax Social Security benefits?

No, Louisiana does NOT tax Social Security benefits. All Social Security income is fully exempt from Louisiana state tax.

What is Louisiana's standard deduction for 2025?

Louisiana's 2025 standard deduction is $12,500 for single filers and $25,000 for married filing jointly. These generous deductions mean many low/middle-income taxpayers pay little or no state tax.

Does Louisiana tax retirement income?

Louisiana offers generous retirement exemptions: taxpayers 65+ can exclude up to $12,000 of retirement income (pension/401k/IRA) annually. Combined with the Social Security exemption, this makes Louisiana very retiree-friendly.

Are there local income taxes in Louisiana?

No, Louisiana does not allow local governments to levy income taxes. The 3% state rate is the only income tax residents pay.

Louisiana Income Tax Calculator 2025

🆕 MAJOR TAX REFORM for 2025

🎉 Louisiana's Flat Tax Revolution

Big News: Louisiana eliminated its progressive tax system on January 1, 2025, replacing it with a simple 3% flat rate on all income!

Old System (2024): Progressive 3 brackets - 1.85% / 3.5% / 4.25%
New System (2025): Flat 3% on ALL income
Ranking: Tied with Indiana for 2nd-lowest state income tax (only Arizona 2.5% is lower)
Standard Deduction Increase: $12,500 (single), $25,000 (married) - up from $4,500 / $9,000

💰 Calculate Your Louisiana State Tax

Annual Taxable Income ($) Enter your Louisiana taxable income (after $12,500/$25,000 deduction)

📊 Before vs After: Louisiana Tax Reform Impact

Tax Comparison: 2024 vs 2025

Income	2024 (Progressive)	2025 (Flat 3%)	Savings
$40,000	$1,075	$1,200	-$125 (pays more)
$60,000	$1,925	$1,800	+$125
$75,000	$2,563	$2,250	+$313
$100,000	$3,525	$3,000	+$525
$150,000	$5,650	$4,500	+$1,150

Who Benefits Most: High earners ($100k+) see the biggest savings. Lower earners ($40k-$50k) may pay slightly more under the flat tax, but the increased standard deduction ($12,500 vs $4,500) offsets this for many.

🗺️ Louisiana vs Neighboring States (2025)

State	Tax Structure	Rate	Tax on $75k
Louisiana	Flat	3.0%	$2,250
Texas	No income tax	0%	$0
Mississippi	Flat	4.4%	$2,860
Arkansas	Progressive (5 brackets)	0% - 3.9%	~$2,475

                Key Regional Insights:
                Texas: Still the regional winner with 0% income tax (but higher property/sales taxes)
Louisiana: LOWEST income tax among taxing states in the region at 3%
Mississippi: 4.4% flat - pays $610 more than LA on $75k
Arkansas: Progressive up to 3.9% - slightly higher than LA

            

🏖️ Louisiana Retirement Tax Benefits

💡 Great News for Retirees!

Louisiana is extremely retiree-friendly with multiple tax breaks:

Social Security: 100% EXEMPT from state tax
Retirement Income (Age 65+): Exclude up to $12,000 of pension/401k/IRA annually
Low Rate: Only 3% on remaining income - among lowest in nation
No Estate/Inheritance Tax: Louisiana doesn't tax inheritances or estates

Retiree Example (Age 68, Married)

Income:

Social Security: $40,000 → 100% exempt
Pension: $50,000 → Exclude $12,000 = $38,000 taxable
After standard deduction: $38,000 - $25,000 = $13,000 taxable

Louisiana Tax: $13,000 × 3% = $390

Effective Rate on Total Income: 0.43% ($390 / $90,000)

Analysis: Despite $90k in retirement income, Louisiana tax is only $390. Excellent for retirees!

🎓 Louisiana Tax FAQs

When did Louisiana's flat tax start?

Louisiana's 3% flat tax took effect on January 1, 2025. This was part of a major tax reform package passed in 2024 aimed at simplifying the tax code and improving Louisiana's competitiveness.

Will Louisiana's 3% rate change in the future?

The 3% rate is set in law for 2025. Future changes would require legislative action. Some lawmakers have discussed further reductions if state revenue targets are met.

Does Louisiana tax capital gains?

Yes, capital gains are taxed as ordinary income at the 3% flat rate. However, Louisiana offers a capital gains exemption for certain investments in Louisiana businesses.

When are Louisiana tax returns due?

Louisiana state tax returns are due on May 15, 2026 for the 2025 tax year (later than federal April 15 deadline). Extensions are available until November 15, 2026.

Does Louisiana have a high cost of living?

No, Louisiana has one of the LOWEST costs of living in the U.S. Combined with the new 3% tax rate, Louisiana offers excellent value: low housing costs, low taxes, and rich culture. However, sales taxes are high (avg 9.6%).

⚜️ Louisiana Income Tax Calculator 2025