Does Louisiana Tax Retirement Income?
Louisiana exempts Social Security and every government pension, then gives each person 65 or older an exemption of $12,000 or more against private pensions and retirement-account withdrawals.
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Quick answer
Louisiana exempts Social Security and every government pension, then gives each person 65 or older an exemption of $12,000 or more against private pensions and retirement-account withdrawals. The rest is taxed at a flat 3%. The top state individual income-tax rate shown for 2026 is 3.00%.
Official sources: Louisiana Department of Revenue, retirement benefits excluded from Louisiana income tax · Louisiana Department of Revenue, RIB 25-012 (individual income tax reform) · Louisiana Department of Revenue, 2026 estimated tax instructions (IT-540ES)
| Louisiana at a glance, 2026 | Treatment |
|---|---|
| Social Security | Exempt |
| Pensions | Partially taxed |
| 401(k) and IRA withdrawals | Partially taxed |
| Military retirement pay | Exempt |
| Key exclusion or rule | Age-65 exclusion starts at $12,000 per eligible person and is indexed annually |
| Top individual rate | 3.00% |
In Louisiana, Social Security is exempt, pension income is partially taxed, traditional 401(k) and IRA withdrawals are partially taxed, and military retirement pay is exempt. The rule that most often changes the result is age-65 exclusion starts at $12,000 per eligible person and is indexed annually, against a top rate of 3.00%.
What changed for 2026 in Louisiana
Tax year 2026 is the first year the age-65 retirement exemption and the standard deduction are indexed for inflation under Act 11 of 2024. The standard deduction rose from $12,500 to $12,875 for a single filer and from $25,000 to $25,750 on a joint return. The retirement exemption moves up from its $12,000 base by the CPI-U change, and the 3% flat rate that replaced the old brackets in 2025 is unchanged.
Does Louisiana Tax Pensions?
Partly. Louisiana taxes some pension income, subject to an exclusion or age rule.
Benefits from Louisiana state and local retirement systems, including teachers, state employees, police, firefighters, and DROP disbursements, are exempt, as are federal civil service annuities. Private pension income is taxable except for the age-65 exemption.
The annual retirement income exemption is $12,000 per person 65 or older for 2025, doubled from $6,000 by Act 11 of 2024, and it is indexed to inflation beginning January 1, 2026, so the 2026 figure is somewhat above $12,000. Each spouse who is 65 claims it against their own retirement income. The standard deduction is $12,875 for a single filer and $25,750 on a joint return for 2026.
Public and private pensions, annuities, and retirement-plan distributions do not always get the same treatment. The pension comparison lists which states exempt pensions broadly, partly, or only for certain plans.
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Does Louisiana Tax 401(k) and IRA Withdrawals?
Partly. Louisiana taxes some traditional 401(k) and IRA withdrawals, subject to an exclusion or age rule.
Traditional 401(k) and IRA withdrawals are taxable. A taxpayer 65 or older can apply the annual retirement income exemption to them, and anything above the exemption is taxed at 3%.
Two timing points matter in Louisiana. A Roth conversion is taxable in the year it is done, and Louisiana starts from federal adjusted gross income, so a large conversion can land in a year when the state exclusion does not cover it. Qualified Roth withdrawals later are generally not taxable at either level. Required minimum distributions follow the same Louisiana rules as any other traditional-account withdrawal.
Model the actual eligibility rule
Split retirement assets so both spouses have retirement income in their own names once each turns 65; the exemption is per person on that person's income, and a spouse with nothing in their own name wastes it. Before 65, there is no exemption at all, so early retirees should lean on exempt sources first.
A Worked Louisiana Retirement-Income Example
Every state page on this site runs the same retiree profile so the states can be compared: $30,000 of Social Security, $40,000 withdrawn from a traditional 401(k), and a $20,000 private pension, $90,000 in total.
| Income stream | Amount in the example | Louisiana treatment |
|---|---|---|
| Social Security | $30,000 | Exempt |
| Traditional 401(k) withdrawal | $40,000 | Partially taxed |
| Private pension | $20,000 | Partially taxed |
| Top state rate on any taxable remainder | 3.00% |
A 68-year-old single filer with $30,000 of Social Security, $40,000 from a 401(k), and a $20,000 private pension excludes the Social Security and applies the age-65 exemption to the $60,000 of other income. After the $12,875 standard deduction, roughly $35,000 is taxed at 3%, about $1,050 of Louisiana tax.
Step one, exclude the $30,000 of Social Security. Step two, subtract the age-65 retirement income exemption, $12,000 plus the 2026 inflation adjustment, from the $60,000 of 401(k) and pension income, leaving roughly $48,000. Step three, subtract the $12,875 standard deduction for about $35,100 of taxable income. Step four, 3% of that is roughly $1,050. Contrast a married couple, both 68, with the same $90,000 where the $40,000 401(k) belongs to one spouse and the $20,000 pension to the other: each spouse claims a $12,000 exemption against their own income, the joint standard deduction is $25,750, and the couple's tax falls to roughly $300. A $150,000 lump-sum IRA withdrawal by the single filer adds $4,500 at the flat rate, with no bracket jump but no relief either.
This is a state-income example, not a tax return
Federal tax, local income tax, filing status, deductions, basis, Roth treatment, residency, and plan-specific rules can change the result. Use the example to compare structure, not as individualized tax advice.
Louisiana vs Nearby and Popular Retirement States
The same $90,000 profile looks different a state line away. The rows below come from the reviewed 51-state table; each state name links to its own guide.
| State | Social Security | Pensions | 401(k) and IRA | Key rule | Top rate |
|---|---|---|---|---|---|
| Louisiana (this page) | Exempt | Partially taxed | Partially taxed | Age-65 exclusion starts at $12,000 per eligible person and is indexed annually | 3.00% |
| Texas | No income tax | No income tax | No income tax | No individual income tax | None |
| Mississippi | Exempt | Exempt | Exempt | Qualified retirement income is exempt | 4.00% |
| Arkansas | Exempt | Partially taxed | Partially taxed | Up to $6,000 of eligible retirement income | 3.70% |
- Texas: has no individual income tax at all.
- Mississippi: treats Social Security as exempt, pensions as exempt, and 401(k) and IRA withdrawals as exempt, with a top rate of 4.00% and qualified retirement income is exempt.
- Arkansas: treats Social Security as exempt, pensions as partially taxed, and 401(k) and IRA withdrawals as partially taxed, with a top rate of 3.70% and up to $6,000 of eligible retirement income.
The headline is the flat 3%, but the structural point is that Louisiana exempts public pensions entirely and private ones only up to the age-65 exemption. A retired state employee and a retired private-sector engineer with identical pensions can have very different Louisiana bills.
Military Retirement, Estate Tax, and Other Louisiana Fine Print
Military retirement: Military retirement pay and military Survivor Benefit Plan payments are excluded from Louisiana income in full. See the military retirement tax map for every state's treatment.
Estate and inheritance tax: Louisiana has no estate or inheritance tax.
Selling a home or investments in Louisiana: retirement-income rules do not cover capital gains. See Louisiana capital gains tax before selling appreciated property or a brokerage position in the year you move or retire.
Before You File a 2026 Louisiana Return: A Retiree Checklist
- Confirm the exclusion you are claiming. The annual retirement income exemption is $12,000 per person 65 or older for 2025, doubled from $6,000 by Act 11 of 2024, and it is indexed to inflation beginning January 1, 2026, so the 2026 figure is somewhat above $12,000. Each spouse who is 65 claims it against their own retirement income. The standard deduction is $12,875 for a single filer and $25,750 on a joint return for 2026.
- Part-year residents. If you moved into or out of Louisiana during the year, retirement income is generally allocated to the period of residency, and the former state may still tax distributions received before the move. Document the move date, the new domicile, and where each distribution was received.
- Withholding and estimates. Pension and IRA custodians often withhold federal tax but not Louisiana tax. If Louisiana taxes any part of your retirement income, check whether quarterly estimated payments are needed to avoid an underpayment penalty.
- Federal side. The federal return has its own rules: up to 85% of Social Security can be taxable, the temporary $6,000 federal senior deduction is available for 2025 through 2028 subject to income limits, and Roth conversions are taxed in the conversion year. State exemptions do not change any of that.
- Large one-time distributions. Split retirement assets so both spouses have retirement income in their own names once each turns 65; the exemption is per person on that person's income, and a spouse with nothing in their own name wastes it. Before 65, there is no exemption at all, so early retirees should lean on exempt sources first.
Comparing states before a move? Use the retirement taxes by state table and the moving states tax guide, and read retirement tax planning for how distributions, conversions, and a move are sequenced together.
Sources for Louisiana retirement tax rules
- Louisiana Department of Revenue, retirement benefits excluded from Louisiana income tax
- Louisiana Department of Revenue, RIB 25-012 (individual income tax reform)
- Louisiana Department of Revenue, 2026 estimated tax instructions (IT-540ES)
- IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits (federal taxation of benefits)
Citations reflect U.S. federal tax law as of the article's last reviewed date.
What changed in Louisiana
Rate and rule changes for recent tax years and changes already enacted for future years, each linked to the state source. Sources last checked September 2, 2026.
Tax year 2025
- In effect
Flat 3% replaces the bracket schedule
Act 11 of the 2024 Third Extraordinary Session replaced the old brackets (top 4.25%) with a flat 3% rate for 2025, raised the standard deduction to $12,500 single and $25,000 joint, and created a $12,000 age-65 retirement income exemption.
Effective January 1, 2025. Act 11 (2024 3rd Ex. Sess.). Source: Louisiana DOR: RIB 25-012 income tax reform, checked September 2, 2026.
Tax year 2026
- In effect
Standard deduction and retirement exemption indexed
Tax year 2026 is the first indexed year: the standard deduction rises to $12,875 single and $25,750 joint, and the age-65 retirement exemption rises from its $12,000 base by the CPI-U change. The 3% rate is unchanged.
Effective January 1, 2026. Source: Louisiana DOR: did the annual retirement exemption change?, checked September 2, 2026.
Educational, not individualized tax advice. Rates shown are statutory; your result depends on residency, filing status, and the income involved.
Louisiana Retirement Tax FAQs
Does Louisiana tax Social Security?
Social Security benefits that are taxed federally are excluded from Louisiana taxable income.
Does Louisiana tax pensions?
Benefits from Louisiana state and local retirement systems, including teachers, state employees, police, firefighters, and DROP disbursements, are exempt, as are federal civil service annuities. Private pension income is taxable except for the age-65 exemption.
Does Louisiana tax 401(k) and IRA withdrawals?
Traditional 401(k) and IRA withdrawals are taxable. A taxpayer 65 or older can apply the annual retirement income exemption to them, and anything above the exemption is taxed at 3%.
Does Louisiana tax military retirement pay?
Military retirement pay and military Survivor Benefit Plan payments are excluded from Louisiana income in full.
Does Louisiana have an estate or inheritance tax?
Louisiana has no estate or inheritance tax.
Is Louisiana a tax-friendly state for retirees?
The headline is the flat 3%, but the structural point is that Louisiana exempts public pensions entirely and private ones only up to the age-65 exemption. A retired state employee and a retired private-sector engineer with identical pensions can have very different Louisiana bills. Split retirement assets so both spouses have retirement income in their own names once each turns 65; the exemption is per person on that person's income, and a spouse with nothing in their own name wastes it. Before 65, there is no exemption at all, so early retirees should lean on exempt sources first.
What is the Louisiana income tax rate on retirement income in 2026?
The top Louisiana individual income-tax rate shown for 2026 is 3.00%. Retirement income that is not excluded is taxed at the state's regular rates, so the exclusion rules above matter more than the headline rate.
Related retirement and state-tax resources
Retirement taxes by state
Planning a move to Louisiana, a Roth conversion, or a large distribution?
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Does Louisiana Tax Social Security?
No. Louisiana does not tax Social Security benefits.
Social Security benefits that are taxed federally are excluded from Louisiana taxable income.
The Louisiana answer is separate from the federal one. Depending on combined income, up to 85% of Social Security benefits can be taxable on the federal return regardless of what Louisiana does, so the state rule changes the state line only. Our guide to states that do not tax Social Security shows where Louisiana sits among the states that still tax benefits.