Moving to Louisiana

Louisiana defines a resident three ways, and meeting any one of them is enough: a person domiciled in Louisiana, a person who maintains a permanent place of abode in Louisiana, or a person who spends more than six months of the year in Louisiana in the aggregate. A resident reports all income on Form IT-540 and takes a credit for income tax paid to another state. Everyone else with Louisiana income, including a person who moved in or out during the year, files Form IT-540B, which taxes only Louisiana-source income at the same 3% after the same standard deduction. Louisiana has no reciprocal agreement with any state and no convenience-of-the-employer rule, so wages are taxed where the work is physically done. A nonresident who works in Louisiana 30 days or fewer in a year owes nothing on those wages; on day 31, all of them become taxable.

Who is a resident

R.S. 47:31 deems three kinds of people residents for income tax. The first is anyone domiciled in Louisiana, meaning the place a person treats as a permanent home and intends to return to. Domicile does not change because of a temporary absence; the Department of Revenue says so plainly, and a Louisianan who spends two years on an assignment elsewhere and keeps the house, the license and the intent to come back is still a resident, taxed on everything. The second is anyone who maintains a permanent place of abode in Louisiana, which can catch someone domiciled elsewhere who keeps a Louisiana home available year-round. The third is anyone who spends more than six months of the tax year in Louisiana, added up across the year, whether or not they ever meant to stay.

The overlap is the trap. A retiree who buys a second home in Louisiana and spends 190 days a year in it is a resident under the third test, however firmly the rest of life is rooted elsewhere, and owes Louisiana tax on all income for the year. Count days. Becoming a resident is easy; leaving means breaking all three tests.

Residents: Form IT-540 and the credit for other states’ tax

A resident reports all income regardless of where it was earned, and when another state also taxes some of it, Louisiana gives a credit on Schedule C of Form IT-540 for the net income tax paid to that state, computed on Form R-10606. The credit is capped at the Louisiana tax on the same income, which at 3% is often the smaller of the two numbers, so the credit tends to wipe out the Louisiana tax on cross-border wages and no more. The other state’s return must be finished first; the credit is for tax actually owed to that state, not withheld. A pass-through business that paid entity-level tax to another state passes a corresponding exclusion to its Louisiana owners at Schedule E code 23E.

Part-year residents and nonresidents: Form IT-540B

Form IT-540B is one form for two situations. A part-year resident reports income earned while a resident, from any source, plus Louisiana-source income from the rest of the year. A nonresident reports Louisiana-source income only: wages for work physically done in Louisiana, rent and gain from Louisiana real estate, income from a business operating in Louisiana, and Louisiana gambling winnings. The form works through the Nonresident and Part-Year Resident Worksheet, which lists every kind of income in two columns, federal and Louisiana, then removes exempt income to reach Louisiana adjusted gross income.

Line 9 of the form divides Louisiana AGI by federal AGI to get a ratio, carried to two decimal places and never above 100%. On the 2025 form the ratio is applied to the excess federal medical deduction on Line 11E, and the Department’s instructions apply it to certain credits (verify). The standard deduction itself is not prorated: Line 10 of the 2025 IT-540B allows the full $12,500 or $25,000 against Louisiana AGI, so a part-year resident who earned $30,000 in Louisiana and took the joint deduction owes Louisiana tax on $5,000. The 2026 form will carry the indexed $12,838 and $25,676. Louisiana tax is then 3% of Louisiana taxable income.

Two Louisiana deductions follow residence. The school expense deduction is allowed only for expenses paid while a Louisiana resident, and nonresidents cannot take it. The child care credit follows the same rule. Retirement income is allocated by the date each payment was received: a pension check that arrived while the recipient lived in Louisiana is Louisiana income, with the Schedule E exemptions available to it, and a check that arrived after the move is not. Social Security, federal and Louisiana public pensions are exempt anyway, so the allocation matters only for private pensions and IRAs.

No reciprocity, no convenience rule

Louisiana has no reciprocal wage agreement with any neighbor. A Louisiana resident who commutes to a job across the state line pays that state’s income tax, if it has one, files a nonresident return there, and claims the Schedule C credit at home. A resident of another state who commutes into Louisiana files an IT-540B here on the Louisiana wages, and sorts out any credit on the home-state return. The employer withholds for the state where the work is done.

Louisiana taxes wages where the work is physically performed, with no rule that assigns a remote employee’s wages to the employer’s location. That cuts both ways. A Louisiana resident who works from a home office in Shreveport for a company headquartered elsewhere owes Louisiana on every dollar, because the work was done in Louisiana, and owes the employer’s state nothing unless the employee actually goes there. A nonresident who works from home in another state for a New Orleans company owes Louisiana nothing on those days. The employer should withhold for the state where the employee sits; one that withholds Louisiana tax from an out-of-state remote worker has made a mistake the employee corrects by filing an IT-540B showing zero Louisiana wages and claiming the withholding back.

The 30-day rule for occasional work in Louisiana

Nonresidents who come into Louisiana for work now and then, a sales trip, a training week, a project, have a safe harbor. Under HB 567 of 2025, effective for 2026, a nonresident employee who performs duties in Louisiana on 30 or fewer days in the calendar year owes no Louisiana income tax on those wages, and the employer need not withhold. The threshold was 25 days through 2025. The rule is all or nothing: on the 31st day the exemption is lost for the whole year, the wages for every Louisiana day, including the first 30, become taxable, and the employer must withhold and remit for all of them. A day with any work in Louisiana counts. Employees who travel here regularly should keep a day log, and employers should watch the count in the fall, because catching up withholding for a year of days in December is unpleasant for everyone.

Military

A service member’s domicile is the home of record, and military pay follows it. Since 2023 a member and spouse may each elect the member’s domicile, the spouse’s domicile or the duty-station state; a couple stationed at Fort Johnson or Barksdale who elect a domicile elsewhere file nothing in Louisiana on military pay or the spouse’s wages. A Louisiana-domiciled member on active duty outside the state for 120 or more consecutive days deducts up to $30,000 of that pay at Schedule E code 10E. Military retired pay and survivor benefits are exempt in full.

Leaving Louisiana

To stop being a Louisiana resident, all three tests have to fail: move the domicile, give up any permanent place of abode here, and spend no more than six months here in the aggregate. Domicile is intent shown by action: a new driver’s license and voter registration, the homestead exemption at the new home and the Louisiana one cancelled, the doctors, the bank, the church, the safe deposit box. A person who keeps the Louisiana house as a vacation home should expect the Department to ask about it, and should keep a calendar. In the year of the move, the IT-540B reports income through the move date as a part-year resident.

Three things change after the move. Louisiana’s exemptions for retirement income stop; the new state’s rules take over, and federal law bars Louisiana from taxing the pension or IRA of someone who no longer lives here. A later sale of Louisiana real estate is Louisiana-source income, so a former resident who sells the old house after moving files an IT-540B for the year of sale; the federal home-sale exclusion flows into federal AGI and so into Louisiana AGI, and only the gain above it is taxed. And Louisiana rental property, a Louisiana business or Louisiana gambling winnings keep a nonresident filing here every year they produce income.

The year you move: a checklist

• Fix the move date and keep proof of it: the lease or closing, the moving company, the utility start dates.
• Give the new employer a Louisiana Form L-4 the first week; give the old one nothing, since wages earned before the move belong to the former state.
• Ask every pension and IRA payer to switch state withholding as of the move date, or stop it if the income is exempt here.
• Split every 1099 by date received. Interest, dividends, pension payments and gains are allocated by when they arrived, not by the year’s total.
• File the homestead exemption at the parish assessor; the deadline is the assessor’s, not the Department’s, and one homestead per person means the old one goes (verify).
• If you are 65 or disabled, apply for the Special Assessment Level freeze at the same visit if your federal AGI is under the limit.
• If you moved in with a large taxable event ahead, a Roth conversion, a stock sale, make a Louisiana estimated payment in that quarter; nobody withholds on it.
• First-time Louisiana filers receive refunds by paper check; use an address that will still be good in June.