Louisiana 2026 Tax Changes — What the One Big Beautiful Bill Act (OBBBA ) Means for Residents
Federal Changes Bring Relief to Louisiana Taxpayers
Lower Federal Tax Brackets are PERMANENT
👉 Louisiana Impact: This is a crucial win for Louisiana’s working families. For oil and gas workers with high overtime, hospitality professionals in New Orleans, and dual-income households in Baton Rouge and Lafayette, having lower, predictable federal tax rates provides much-needed financial stability.
The Federal Standard Deduction is PERMANENT
The higher federal standard deduction, which simplifies tax filing for millions, is also here to stay.
👉 Louisiana Impact: A permanent, higher federal standard deduction is a direct benefit for the majority of Louisiana residents. It provides a substantial, straightforward deduction on your federal return, lowering your taxable income without the need for complex itemization.
The QBI Deduction is PERMANENT and ENHANCED (Federal Level)
This is the most critical update for Louisiana’s business community. The 20% Qualified Business Income (QBI) Deduction is not expiring. OBBBA has made it a permanent part of
the federal tax code and even improved it.
Important Note for Louisiana: Louisiana is a non-conforming state, meaning it does not offer a state-level QBI deduction. However, this powerful 20% deduction remains fully available on your federal tax return.
This is a major federal benefit for Louisiana’s:
- LLCs, S-Corps, and Sole Proprietors
- Skilled trades and construction contractors
- Real estate investors and landlords
- Independent contractors and gig economy workers
Key OBBBA Enhancements to QBI:
- Permanence: The 20% federal deduction is locked in for 2026 and beyond.
- Minimum Deduction: A new $400 minimum federal deduction is available for any business with at least $1,000 of qualified income.
👉 Louisiana Impact: For the thousands of small businesses that are the backbone of Louisiana’s economy, the permanent federal QBI deduction provides certainty and significant federal tax savings. Strategic planning to maximize this federal benefit is more important than ever.
New Federal Tax Breaks for Louisiana Residents
- Tip Income Deduction: Deduct up to $25,000 in tip income—a massive benefit for workers in Louisiana’s world-class tourism and hospitality industry in New Orleans, Baton Rouge, and beyond.
- Overtime Deduction: Deduct up to $12,500 ($25,000 for joint filers) of qualified overtime pay, a significant benefit for Louisiana’s oil and gas workers, offshore crews, and industrial workforce.
- Senior Deduction: An additional $6,000 deduction for individuals 65 and older, providing federal tax relief for Louisiana’s retirees (subject to phase-out).
Louisiana-Specific Tax Considerations for 2026
Louisiana’s State Tax and Federal AGI
Louisiana has its own income tax brackets and rules. Because the state uses federal Adjusted Gross Income (AGI) as the starting point for its calculations, the permanent federal deductions under OBBBA help keep your AGI lower. This provides a positive starting point for calculating your Louisiana state tax, even though state rates are applied differently.
A Major Win for Oil, Gas, and Hospitality Workers
The new deductions for overtime and tip income are game-changers for two of Louisiana’s most important industries. For the first time, a significant portion of the extra income earned through hard work in the energy sector or from providing excellent service in the tourism industry can be deducted on your federal return, lowering your overall tax burden.
Real Estate in a Diverse Market
What Louisiana Taxpayers Should Do Now
- Update Your Tax Plan: Your old strategy, based on the fear of expiring tax cuts, is obsolete. It’s time to build a new plan based on permanence and new federal opportunities.
- Integrate Federal and State Planning: Work with a professional who understands how to maximize permanent federal benefits while navigating Louisiana’s specific state tax laws.
- Maximize New Deductions: If you work in the energy or hospitality sectors, start planning now to document your overtime and tip income to take full advantage of these new federal deductions.
- Leverage Real Estate Benefits: Plan your real estate investments to take full advantage of permanent 100% bonus depreciation on your federal return.
Louisiana 2026 Tax FAQ
Does Louisiana conform to QBI?
No — QBI is federal-only.
Will state taxes increase?
Rates stay the same, but taxable income rises due to federal changes.
Are families affected?
Yes — child credit reductions and deductible changes impact many.
Are STR owners impacted?
Yes — depreciation and documentation rules tighten.
Are retirees affected?
Yes — federal bracket changes increase taxes on withdrawals.
Get Your Personalized 2026 Louisiana Tax Plan
The tax landscape has permanently shifted in your favor. Don’t operate on outdated assumptions. A personalized strategy session will ensure you are structured to maximize every new and permanent benefit under OBBBA, fully integrated with Louisiana’s unique economic and tax environment.
Because tax situations vary by individual and business, many Louisiana residents choose to work with a qualified tax professional. You can explore available Louisiana tax services here: