(NEW ORLEANS (WGNO) — Louisiana taxpayers are filing under a new income tax system for the first time this year, and state leaders say many families could see the difference when refunds arrive.
The changes were passed during a 2024 special legislative session and include a lower flat tax rate and a larger standard deduction.
Governor Jeff Landry says the goal was to put more money back in people’s pockets.
“When people file taxes this year, they are going to get a bigger refund,” Landry said.
Under the new law, Louisiana moved to a flat three percent personal income tax rate, replacing the previous multi-bracket system.
Lawmakers also increased the state’s standard deduction to $12,500. The standard deduction is the portion of income that is not taxed, meaning a larger share of earnings is now shielded from state income taxes.
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Louisiana Revenue Secretary Richard Nelson said that increase significantly benefits lower-income workers.
“So because we raised the standard deduction to $12,500 dollars, then their rate is essentially zero,” Nelson said.
State leaders say for many lower-income workers, the first $25,000 of income will not be taxed by the state at all.
“We eliminated the income tax for the working poor,” Landry said.
Officials estimate a typical middle-class family could save close to $500 this year.
Seniors will also see changes under the new law. The retirement income exemption was doubled.
“A married couple over 65 can now earn nearly $49,000 tax free,” Landry said.
State Representative Tony Bacala said the overhaul was designed to create long-term stability in Louisiana’s tax structure.
“If you want industry growth, if you want business to come to Louisiana, you can’t have that,” Bacala said, referring to instability in the previous system.
Landry says the changes are permanent and include built-in adjustments for inflation, meaning the standard deduction will automatically increase over time.
How much taxpayers receive in refunds will still depend on their income and how much was withheld during the year. But this filing season marks the first time many Louisiana families are seeing the full impact of the new tax law.
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