Updated October 29, 2026. Quick answer: No, not for federal retirement. The Department of Revenue says “Federal retirement benefits received by federal retirees, both military and nonmilitary,” may be excluded from Louisiana taxable income under code 04E, while other pension, annuity and IRA income without a code of its own gets only up to $12,000 at 65 or older.
What Louisiana does with a FERS or CSRS annuity
| Question | What the Louisiana documents say |
|---|---|
| What the source says | Louisiana lets a retiree exclude retirement benefits received from a federal retirement system, military and nonmilitary, using exemption code 04E on Schedule E, with no dollar cap printed. |
| Amount or limit | Federal retirement benefits received by federal retirees may be excluded from Louisiana taxable income (code 04E); no dollar cap is printed. Separately, a taxpayer 65 or older may exclude up to $12,000 of other annual retirement income (code 06E), which does not include benefits coded 04E. |
| State rate printed | The 2025 instructions state Louisiana uses a flat income tax rate of 3%. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Louisiana documents’ own words
- “benefits received from a Federal Retirement System, including” (What’s New for Louisiana 2025 Individual Income Tax (IT-540 instructions))
- “Up to $12,000 of your annual retirement” (What’s New for Louisiana 2025 Individual Income Tax (IT-540 instructions))
- “Persons 65 years or older may exclude up to $12,000” (Is there a list of retirement system benefits that may be excluded from Louisiana income tax? (FAQ))
- “that are coded as 02E, 03E, 04E, or 05E.” (What’s New for Louisiana 2025 Individual Income Tax (IT-540 instructions))
- “changed the income tax rate to a flat tax rate of 3%.” (What’s New for Louisiana 2025 Individual Income Tax (IT-540 instructions))
How this differs from other pensions in Louisiana
Federal retirement benefits are excluded in full under code 04E, while other pension, annuity and IRA income without a code of its own gets only the capped $12,000 exclusion for taxpayers 65 or older. The instructions say not to include benefits coded 02E, 03E, 04E or 05E in that capped exclusion. See also Does Louisiana tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The state documents cited here do not address TSP withdrawals, though the 06E exclusion covers distributions from a pension, an annuity, or an individual retirement arrangement (IRA) for taxpayers 65 or older. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the Louisiana return
Exclusion codes are entered on Louisiana Schedule E, with code 04E for federal retirement benefits. The Department’s FAQ lists the retirement systems whose benefits may be excluded.
Checks before you rely on this answer
- Confirm that your plan is on the Department’s list of retirement systems before using code 04E.
- Keep benefits coded 04E out of the capped exclusion for other retirement income.
- Check your age against the 65 test for the separate $12,000 exclusion.
What the Louisiana documents leave open
The documents cite R.S. 47:44.2, but the statute text was not read. No dollar cap or age test is printed for the federal exclusion, and TSP withdrawals are not addressed by name.
Common mistakes
- Counting federal benefits against the $12,000 exclusion. The instructions say benefits coded 02E, 03E, 04E or 05E are not included in that capped exclusion.
- Leaving the code off Schedule E. The federal exclusion is claimed with code 04E.
Related: Does Louisiana tax pensions?, Louisiana military retirement pay, Louisiana retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- What’s New for Louisiana 2025 Individual Income Tax (IT-540 instructions): https://dam.ldr.la.gov/taxforms/IT540i-WEB-2025.pdf
- 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/
Read from the state documents linked above on October 29, 2026. General information, not tax advice.