(LOUISIANA) Louisiana will use a flat individual income tax rate of 3% for tax year 2026, and that change matters for immigrants and other newcomers whose paychecks, budgets, and immigration filings depend on predictable after-tax income. The state has also set new, larger base standard deductions and a bigger retirement income exemption starting in 2026.
For many foreign workers, international students on work authorization, and new permanent residents, Louisiana withholding is the first place this shift shows up. Employers have already moved withholding tables to reflect the 3% rate and the higher deductions, which can change take-home pay during the year and reduce surprises at filing time.
What Louisiana changed for 2026, in plain terms
Louisiana now applies one statewide rate to all taxable income instead of using multiple brackets. The new rule is a flat individual income tax rate of 3% on all taxable income for tax year 2026, with no brackets.
That flat rate comes from H.B. 10, signed by Governor Jeff Landry on December 4, 2024. The law applies to taxable years beginning on or after January 1, 2025, which includes 2026.
Before this change, Louisiana used graduated rates. For example, for single filers in 2024, the brackets were 1.85% on $0–$12,500, 3.5% on $12,501–$50,000, and 4.25% on income over $50,000.
“For taxable years beginning on or after January 1, 2025, income tax is computed at a flat rate of 3%,” and, “The individual income tax rate is a flat 3%. The graduated brackets and rates for income tax have been repealed.” — Louisiana Department of Revenue
Quick comparison (old vs new)
| Item | Prior (example 2024 single brackets) | New (taxable years beginning Jan 1, 2025 / 2026) |
|---|---|---|
| Tax rate structure | Graduated brackets (1.85%, 3.5%, 4.25%) | Flat 3% on all taxable income |
| Brackets | $0–$12,500, $12,501–$50,000, > $50,000 | No brackets — single rate applies |
Why immigrants feel tax changes faster than many long-time residents
Immigrants often plan around net pay because visa status can limit job changes, side work, or hours. A smaller swing in withholding can decide whether rent is paid on time, whether a family can afford child care, or whether someone can travel for a consular appointment.
Taxes also show up in immigration paperwork. Many applicants use tax returns as proof of address history, household size, and steady income. For family-based cases, a sponsor’s income links directly to the Affidavit of Support, and consistent filing helps credibility.
A flat rate does not remove complexity around who must file, what income is taxable, or how residency is defined for state purposes. It changes the rate structure — the rest of the compliance burden still sits on the taxpayer.
2026 deductions and exemptions that change real take-home pay
Alongside the 3% flat rate, Louisiana made several related changes that matter to households with children, older relatives, or retirement income.
Standard deduction indexing begins January 1, 2026. Starting then, Louisiana adjusts the standard deduction annually based on the Consumer Price Index (CPI) increase. The base amounts are:
- $12,500 for single or married filing separately
- $25,000 for married filing jointly, head of household, or qualifying surviving spouse
For immigrant families, this is not just a tax detail. Standard deduction levels influence withholding, refunds, and the cash buffer a household keeps for emergencies, legal fees, or travel.
Retirement income exemption changes for seniors. Louisiana also doubled the retirement income exemption to $12,000 for those 65+, and it will be adjusted annually by CPI starting in 2026. Multigenerational immigrant families supporting older parents often feel this immediately.
Some extra exemptions were repealed. Louisiana repealed additional exemptions for dependents, blind persons, and those over 65. Households that used those exemptions will want to compare old and new outcomes, even with the larger standard deduction.
Important: Because exemptions were repealed while the standard deduction and retirement exemption were increased, some households will see different net effects. Compare prior-year returns to projected 2026 results to avoid surprises.
Paycheck withholding and onboarding: what foreign workers should check
Withholding tables have been updated to reflect the flat individual income tax rate and the higher deductions. That can change how much your employer takes out per paycheck, even if your gross salary stays the same.
New hires, including foreign nationals starting a first job in Louisiana, should keep copies of onboarding tax documents and authorization records. For work authorization compliance, employers use Form I-9 to verify identity and authorization to work in the United States 🇺🇸. The official form and instructions are available from U.S. Citizenship and Immigration Services: Form I-9, Employment Eligibility Verification.
A practical checklist for employees:
- Compare the first paycheck after onboarding to the offer letter and expected withholding.
- Keep year-to-date pay stubs, especially if you will file or renew an immigration benefit later.
- If your household size changes, revisit withholding so you do not underpay.
Filing status and household structure: common immigrant scenarios
Immigrant households often have filing situations that do not fit “typical” templates. Louisiana’s move to 3% does not change federal rules, but it changes the state rate applied to taxable income after Louisiana calculations.
Common scenarios seen often:
- A married couple where one spouse is new to the United States 🇺🇸 and has limited Social Security history.
- A new permanent resident supporting children abroad while building U.S. credit and savings.
- International students moving into a first full-time job and switching from campus work to Optional Practical Training.
For these households, keeping clean records matters as much as the tax rate. A flat rate helps predict liability, but paperwork still drives compliance.
Tax identity numbers and compliance for newcomers
Not every immigrant has a Social Security number right away. Many taxpayers use an Individual Taxpayer Identification Number (ITIN) for tax filing. If you need an ITIN, the IRS uses Form W-7, which must be filed under strict documentation rules. The official IRS page is here: IRS Form W-7.
For immigrants, timely tax filing often supports life goals that sit far outside tax law, like qualifying for a mortgage, documenting shared residence, or showing stable income for immigration filings. VisaVerge.com reports that immigration lawyers regularly advise clients to treat tax compliance as part of their long-term case strategy, not a once-a-year chore.
What this means for budgeting, negotiations, and settlement planning
The biggest day-to-day effect of Louisiana’s flat individual income tax rate of 3% is predictability. Under the prior structure, some workers saw a higher marginal rate once income crossed a bracket line. With a single rate, the planning conversation becomes simpler.
That matters in common immigrant decisions:
- Whether to accept overtime or a second job, where allowed by status.
- How much to set aside for filing fees, credential evaluations, or English testing.
- Whether a spouse can pause work to care for a child or study.
It also matters for employers recruiting internationally. When HR explains compensation to a candidate relocating to Louisiana, clear state tax rules help the candidate estimate net pay and make a safer decision for their family.
Where to find the official rule and confirmation
Louisiana’s tax agency has publicly confirmed the shift to a 3% flat rate and the repeal of graduated brackets. For the most reliable updates, taxpayers and payroll teams can use the Louisiana Department of Revenue’s official guidance: Louisiana Department of Revenue.
For immigrants settling in Louisiana, the key is to treat this as part of a broader compliance calendar. Keep your address current across agencies, keep copies of returns and W-2s, and reconcile withholding early so filing season does not collide with immigration deadlines or travel plans.
Louisiana is transitioning to a flat 3% individual income tax rate for the 2026 tax year, eliminating graduated brackets. This move, signed into law by Governor Jeff Landry, aims to simplify the tax code. The reform includes higher standard deductions and a doubled retirement exemption for seniors. These changes are particularly significant for immigrant workers who rely on predictable net income for budgeting and immigration-related financial documentation.
