Updated October 5, 2026. Quick answer: Yes. Louisiana taxes trust income, and the 2025 instructions say the tax is computed “at the rate of 3% on Louisiana taxable income.” The tax is imposed on resident and nonresident trusts alike.
How Louisiana treats trust income
| Item | What the documents say |
|---|---|
| Treatment | Louisiana imposes an income tax on every estate or trust that is resident or derives income from Louisiana sources, and the fiduciary files for it. The source says: “every resident estate or trust and every nonresident estate or trust deriving” income from Louisiana sources is liable for an income tax, under R.S. 47:162 as the instructions cite it. |
| Who counts as a resident trust | A resident trust includes one created by “the last will and testament of a decedent domiciled in Louisiana” at the time of death. A trust whose instrument names Louisiana law is also resident, and so is one with no governing law named that is administered in Louisiana. |
| Rate on trust income | Trusts pay a flat 3% on Louisiana taxable income for 2025, and the instructions tie the change to Act 11 of the 2024 Third Extraordinary Session. The source says: “Multiply Line 6 by 3% (.03). Round to the nearest dollar.” The 2025 return prints the same instruction on Line 7. |
| Distribution deduction | Line 5 of the return allows a Louisiana income distribution deduction, supported by Schedule C for each beneficiary, and the instructions say to enter the portion of “Louisiana income that was distributed or was required to be” distributed to the beneficiaries. |
| Nonresident trusts | A nonresident trust is taxed only on the part of its net income derived from Louisiana sources, using allocation and apportionment schedules. The source says: “derived from sources within Louisiana.” Nonresident trusts use Schedules A and B to compute Louisiana taxable income before the distribution deduction. |
| Return to file | Form IT-541, the Fiduciary Income Tax Return, is filed with the Louisiana Department of Revenue, and a 2025 calendar year return is due May 15, 2026. The source says: “A 2025 calendar year return is due on May 15, 2026.” Returns with one or more Schedules K-1 attached must be filed electronically. |
| Foreign trusts | A trust located outside the United States with Louisiana income may elect to be taxed on gross Louisiana income at 5%. The source says: “elect to be taxed on total gross income from Louisiana sources” at the rate of 5%. Otherwise the tax is imposed in the same manner as on any other nonresident trust. |
A $10,000 example
A trust with $10,000 of taxable income that it keeps, rather than distributes, is taxed at 3%, computed as $10,000 x 3% = $300, before any deduction or exemption the state allows. Federal tax on the trust’s income still applies.
Income the trust passes out to a beneficiary is handled as the distribution deduction row above describes.
What changes in 2026
The latest documents read print no 2026 change to how trust income is taxed.
Federal rules
The state’s treatment sits on top of the federal one. The federal brackets a trust faces are laid out in trust tax brackets versus individual brackets, and capital gains that a trust keeps are covered in capital gains stay in the trust. The IRS explains the federal return in the About Form 1041 page.
Related: how Louisiana taxes retirement income, whether Louisiana taxes pensions, what a living trust costs in Louisiana, and federal trust tax brackets.
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Answer againSources
- IT-541i (1/26) General Information and Instructions for Form IT-541 Fiduciary Income Tax Return, 2025 (Louisiana Department of Revenue): https://dam.ldr.la.gov/taxforms/IT-541i-1-26.pdf
- Form IT-541 Fiduciary Income Tax Return, 2025 (Louisiana Department of Revenue): https://dam.ldr.la.gov/taxforms/IT-541-BC-1-26-revised-8-6-26-F.pdf
Sources: the primary documents linked above, read on October 5, 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.