Credits and breaks for Louisiana families: the $25,000 line, the school expense deduction and START

Since 2025 a Louisiana family takes the same standard deduction as a childless couple, $25,676 on a joint or head-of-household return, and there is no dependent exemption, no dependent credit and no state child tax credit. What the state does for parents is targeted. The earned income credit is 5% of the federal one. The child care credit is 50% of the federal child and dependent care credit and refundable when federal AGI is $25,000 or less, then drops to 30%, 10% and finally $25, nonrefundable, as income rises. A child under six in a quality-rated center earns a second credit of up to twice the first. Private school tuition is deductible up to $6,000 per child, and half of public school and home-school costs are deductible to the same cap. Deposits to a START 529 account come off up to $2,400 per child, $4,800 on a joint return, and the state adds a match of up to 14% to the account itself. The deductions are worth 3 cents on the dollar. The credits, for families under $25,000, are worth real money.

The earned income credit: 5% of federal

Louisiana’s earned income credit is a straight percentage of the federal credit under section 32: 5% for tax years 2019 through 2030, falling back to 3.5% after that unless the legislature acts. It goes on Line 16 of Form IT-540, it is refundable, and it follows the federal credit in every respect, including the rules for which parent of a divorced couple claims the child. There is no Louisiana expansion to younger or older childless workers or to filers without a Social Security number. A family with the maximum federal credit for two children, around $7,300 for 2026, gets about $365 from Louisiana. The federal rules are in The earned income credit.

The child care credit and the $25,000 line

R.S. 47:297.4 gives a credit for child care expenses as a percentage of the federal child and dependent care credit for the same year, and the percentage turns on federal adjusted gross income.

The $25,000 tier uses the “unreduced” federal credit, the amount the federal formula produces before the federal tax liability limit. Low-income parents often owe too little federal tax to use the federal credit, and Louisiana pays them half of it anyway.

The school readiness credit sits on top. If the child is under six and attends a child care center in the state’s Quality Start rating program with at least two stars, the family gets a second credit equal to a percentage of the Louisiana child care credit: 50% for two stars, 100% for three, 150% for four and 200% for five. One star or an unrated center earns nothing. The center completes Form R-10614 for the parent each year, showing the rating. The same $25,000 line decides whether this credit is refundable on Line 15 or nonrefundable on Schedule J, and each child is figured separately; a child who attended two centers gets the higher rating. Act 454 of 2025 renamed the school readiness credits the Workforce Child Care Tax Credits, and the parent’s piece is now formally the child care expense credit under R.S. 47:6104; the 2025 form still called it the school readiness credit, and the figures did not change.

The two credits together produce a cliff that a family can fall off with a $2,000 raise. The worked example below shows one.

The school expense deduction

This is the break middle-income families actually use. Three deductions, each up to $6,000 per dependent, come off income on Schedule E:

The cap rose from $5,000 to $6,000 for 2024 and later. The 50% categories hit the cap at $12,000 of spending. The total deduction cannot exceed taxable income, and only the parent or guardian who claims the child as a dependent this year or last may take it. Keep every receipt; the Department asks for them.

At 3%, a full $6,000 deduction saves $180 per child. That is what private school tuition of $6,000 or more is worth on the Louisiana return. A public school family spending $900 on required uniforms and supplies deducts $450 and saves $13.50. Nobody will get rich, but it is money left on the table on most returns because the federal return never asks about it. Part-year residents deduct only expenses paid while living in Louisiana; nonresidents get nothing. The worksheet is Form R-62608 and goes with the return (verify).

START: the 529 deduction and the match

The START Saving Program is Louisiana’s 529 plan, run by the Office of Student Financial Assistance. Deposits are excluded from Louisiana income up to $2,400 per beneficiary per year on a single return and $4,800 on a joint return, at Schedule E code 09E, and anything above the limit carries forward to later years, so a $10,000 deposit for one child in a lean year keeps producing deductions. Out-of-state 529 plans earn no deduction. Earnings are free of Louisiana tax when spent on qualified higher-education expenses, as they are federally.

The deduction is the smaller half of the benefit. The state also pays an Earnings Enhancement into the account each year, a match of up to 14% of that year’s deposits, with the percentage set by the account category and the owner’s prior-year federal AGI. A family that deposits $4,800 and qualifies for the top match gets $672 added to the account and saves $144 of tax; a family at a lower match tier still comes out ahead of any deduction. START K12 accounts, for elementary and secondary tuition, have a separate exclusion at code 28E with its own limit (verify). Louisiana has no tuition credit for college and nothing that mirrors the federal education credits; the state’s college help is TOPS and START, not the tax return.

Head of household and filing status

Louisiana filing status follows the federal return, and the standard deduction has only two levels: $12,838 for single and married filing separately, $25,676 for everyone else. A head of household therefore gets exactly double the single deduction, the same as a married couple, which makes federal head-of-household status worth $385 of Louisiana tax on top of its federal value. The federal tests, in Head of household, decide it. A married couple filing separately in Louisiana splits community income down the middle unless they have a separation of property agreement, which usually makes separate returns pointless here.

What is not there

No child tax credit. No dependent exemption or credit since 2025. No deduction for the federal child tax credit, the adoption credit or the education credits, all of which live below the federal AGI line and never reach Form IT-540. No renter’s credit and no property tax credit on the income tax return; the homestead exemption on the first $75,000 of a home’s market value is at the parish assessor. A refundable credit for the adoption of an unrelated infant exists on Schedule F (verify), and donors to school tuition organizations have a credit of their own, but for the ordinary family the list above is the whole list.