2022 Income & Franchise Tax Changes
Individual Income Tax
With the passage of Constitutional Amendment #2, the provisions of Act 395 of the 2021 Regular Session of the Louisiana Legislature became effective. Effective for income tax periods beginning on or after January 1, 2022, Act 395 repealed the federal income tax deduction and limits Louisiana’s Excess Federal Itemized Personal Deductions to medical expenses in exchange for reduced tax rates. The rates are available on our individual income tax page under the heading "Determination of Tax".
The calculation for Louisiana’s Excess Federal Itemized Personal Deductions remains the same, except that medical expenses must be deductible at the federal level and exceed the federal standard deduction for the taxpayer’s filing status.
Corporation Income and Franchise Tax
With the passage of Constitutional Amendment #2, the provisions of Act 396 of the 2021 Regular Session of the Louisiana Legislature became effective. Effective for income tax periods beginning on or after January 1, 2022, Act 396 repealed the federal income tax deduction in exchange for reduced tax rates. The new tax rates are 3.5% on the first $50,000 of net income, 5.5% on the next $100,000 of net income, and 7.5% on the excess over $150,000.
Also, some provisions of Act 389 of the 2021 Regular Session of the Louisiana Legislature became effective. Effective for franchise tax periods beginning on or after January 1, 2023, Act 389 reduced the tax rate to a single rate of $2.75 for each $1,000, or major fraction thereof in excess of $300,000 of capital employed in Louisiana. The Act also continued the suspension of the lower tier of the tax ($1.50) through corporation franchise tax periods ending on or before November 30, 2023.
What's New
- What’s New for Louisiana 2022 Corporation Income and 2023 Corporation Franchise Tax
- What’s New for Louisiana 2022 Individual Income Tax