Partly taxed
How Louisiana taxes retirement income
Louisiana exempts Social Security, federal civil service and military retirement, and pensions from its own state retirement systems, including the Teachers’ Retirement System of Louisiana and LASERS. Money paid out of DROP accounts in those systems is exempt too.
Beyond that, each person 65 or older can exclude up to $12,000 a year of other retirement income, such as a company pension, a pension from another state, or 401(k) and IRA withdrawals. A married couple who are both 65 and both have retirement income can each exclude $12,000. Starting in 2026, the amount rises with inflation each year.
Everything above that is taxed at Louisiana’s flat rate of 3%. A 66-year-old with a $30,000 Texas TRS pension who moves to Louisiana would exclude $12,000 and pay about 3% on the rest after the standard deduction.
Questions
Does Louisiana tax TRSL and LASERS pensions?
No. Pensions from Louisiana state retirement systems, including DROP distributions, are exempt.
Does Louisiana tax pensions from other states?
Yes, above the $12,000 exclusion for people 65 and older.
Does Louisiana tax Social Security?
No.