About Louisiana State Income Tax

Louisiana uses a progressive tax system with three tax brackets. The state has the lowest starting tax rate among its neighbors, making it competitive for lower and middle-income earners in the Gulf region.

Louisiana Tax Brackets 2026

• $0 - $12,500: 1.85%
• $12,501 - $50,000: 3.11%
• Over $50,000: 4.25%

How Louisiana Tax is Calculated

Louisiana's progressive tax system works as follows:

1. Income is divided into three tax brackets
2. Each bracket is taxed at its corresponding rate
3. Lower income earners benefit from the low 1.85% starting rate
4. Standard deduction reduces taxable income

Louisiana Tax Features

• Lowest Starting Rate: 1.85% is the lowest first bracket rate in the region
• Reasonable Top Rate: 4.25% is competitive compared to neighboring states
• Oil & Gas Incentives: Various deductions and credits for energy sector workers
• Port Authority Benefits: Special tax provisions for port-related income

Frequently Asked Questions

What is Louisiana's income tax rate?

Louisiana has progressive tax rates from 1.85% to 4.25%. The starting rate of 1.85% is among the lowest in the nation, making Louisiana attractive for lower income earners.

Does Louisiana tax retirement income?

Louisiana is very retirement-friendly, allowing exclusion of up to $12,500 of military retirement income and other favorable treatment for retirement distributions. Many retirees pay minimal state income tax.

Does Louisiana tax Social Security?

No, Louisiana does not tax Social Security retirement benefits, which is excellent for retirees depending on these income sources.

How does Louisiana compare to neighboring states?

Louisiana (4.25%) compares favorably to its neighbors: Texas (0%), Arkansas (4.9%), Mississippi (5%), and Alabama (2-5%). Louisiana's top rate is competitive in the South.

Louisiana vs. Neighboring States

Tax comparison with surrounding states:

• Texas: No state income tax
• Arkansas: Progressive up to 4.9%
• Mississippi: Progressive up to 5%
• Alabama: Progressive up to 5%

Tips for Louisiana Taxpayers

• Take advantage of Louisiana's low 1.85% starting tax bracket
• Claim military retirement income exclusion if eligible
• Benefit from Louisiana's no tax on Social Security policy
• Explore oil and gas industry deductions if applicable
• Consider Louisiana's retirement-friendly tax environment for long-term planning