Updated October 4, 2026. Quick answer: Yes, with an exclusion at 65 or older. Louisiana taxes retirement income at a flat 3%, and a resident 65 or older “may exclude up to $12,000 of annual retirement income”. The statute defines it as “pension and annuity income which is included in” tax table income, and neither the statute nor the FAQ names 401(k) or IRA accounts.
More state retirement-income schedules, line by line: Louisiana retirement income exemption.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Louisiana tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Louisiana tax 403(b) and 457(b) withdrawals.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Louisiana tax withholding on IRA and 401(k) withdrawals.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Louisiana have an inheritance tax?.
What Louisiana does with 401(k) and IRA withdrawals
The statute reads “Twelve thousand dollars of annual retirement income”, and the rate section says “computed at the rate of three percent on net income”. The department’s rate FAQ says “the individual income tax rate is a flat 3%”.
| Item | What the documents say |
|---|---|
| Treatment | Taxable at 3%; a resident 65 or older may exclude up to $12,000 of annual retirement income |
| Exclusion | $12,000 per person at 65 or older, indexed to CPI-U from January 1, 2026 |
| State rate | 3% flat for 2025 and after |
| Source | Louisiana Department of Revenue FAQs; La. R.S. 47:44.1 and 47:32 |
A $40,000 withdrawal
If the $40,000 withdrawal counts as pension and annuity income, a resident 65 or older excludes up to $12,000, leaving $28,000 (computed as $40,000 minus $12,000) as taxable income, which is $840 at 3%, before other deductions.
What changes in 2026
The statute adjusts the $12,000 annually from January 1, 2026 by the CPI-U increase. The documents read print no adjusted dollar amount, so none is stated here.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Louisiana taxes pensions, how Louisiana taxes retirement income, whether Louisiana taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
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Answer againSources
- Is there a list of retirement system benefits that may be excluded from Louisiana income tax? (FAQ): https://revenue.louisiana.gov/tax-education-and-faqs/faqs/individual-income-tax/is-there-a-list-of-retirement-system-benefits-that-may-be-excluded-from-louisiana-income-tax/
- La. R.S. 47:44.1 Annual retirement or disability income; exemption from taxation: https://legis.la.gov/legis/Law.aspx?d=102133
- What are the individual income tax rates and brackets? (FAQ): https://revenue.louisiana.gov/tax-education-and-faqs/faqs/income-tax-reform/what-are-the-individual-income-tax-rates-and-brackets/
- La. R.S. 47:32 Rates of tax: https://legis.la.gov/legis/Law.aspx?d=101946
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.