Louisiana Tax Form IT-540 - Resident Substitute Return Instructions

General Instructions

WHO MUST FILE A RETURN

• If you are a Louisiana resident who is required to file a federal individual income tax return, you must file a Louisiana income tax return reporting all income earned in 2008.
• You must file a return to obtain a refund or credit if you overpaid your tax through: (A) withholding, (B) declaration of estimated tax, (C) credit carried forward, (D) composite partnership payments made on your behalf, (E) claiming a 2008 refundable child care credit, or (F) claiming a 2008 Louisiana property insurance credit.
• If you are not required to file a federal return but had Louisiana income tax withheld in 2008, you must file a return to claim a refund of the amount withheld. Please refer to the IRS requirements for filing in order to determine if you must file a federal return. For additional information, see the NOTE on page 19.
• If you are military personnel whose home of record is Louisiana, and you meet the filing requirements of 1 or 2 above, you must file a return and report all of your income, regardless of where you were stationed. If you are single, you should file a resident return (Form IT-540), reporting all of your income to Louisiana.

If you are married and both you and your spouse are residents of the State of Louisiana, you should file a resident return (Form IT-540), reporting all of your income to Louisiana. If you are married and one of you is not a resident of Louisiana, you have the option of filing as a resident (Form IT-540), or filing as a nonresident (Form IT-540B). You may choose the option that is more beneficial to you and your spouse. Any military personnel whose domicile is NOT in Louisiana must report any nonmilitary Louisiana sourced income on Form IT-540B.

As a resident taxpayer, you are allowed a credit for an income tax liability paid to another state on nonmilitary income or on income earned by your spouse if that income is included on the Louisiana return. Use Nonrefundable Tax Credits, Schedule G, Line 1 to report taxes paid to another state.

Louisiana residents that are members of the armed services and were stationed out-of-state for 120 or more consecutive days may be entitled to an exemption of up to $30,000 of military income. Please see the instructions for Schedule E, page 22, Code 10E.

• Nonresident professional athletes must use Form IT-540B-NRA.
• A temporary absence from the State of Louisiana does not automatically change your domicile for income tax purposes. You must confirm your intention to change your domicile to another state by actions you have taken to establish a new domicile outside of Louisiana, and by actions you have taken to abandon the Louisiana domicile and its privileges. Examples of establishing a domicile include: registering to vote, registering and titling vehicles, obtaining a driver’s license, changing children’s school of attendance, obtaining a homestead exemption, or any other actions that show intent to establish a new domicile outside of Louisiana. These are intended as examples and do not necessarily indicate a change in residency. You are considered to be a Louisiana resident if you continue to maintain a residence in Louisiana while working in another state. Use Nonrefundable Tax Credits, Schedule G, Line 1, to report taxes paid to the other state(s).
• Surviving Spouses, Executors, Administrators, or Legal Representatives– A final return for a decedent must be filed if both of the following are true: (1) you are the surviving spouse, executor, administrator, or legal representative; and (2) the decedent met the filing requirements at the date of death. If both conditions are applicable, (A) mark the decedent box on the face of the return for the appropriate taxpayer, (B) attach a copy of the death certificate, and (C) complete and attach Form R-6642 (Statement of Claimant to Refund Due on Behalf of Deceased Taxpayer) only if a refund is due to the decedent’s estate, survivor, etc. Form R-6642 is available on the Department’s website at www.revenue.louisiana.gov.

FORMS

Forms and instructions may be obtained from any office of the Department of Revenue and on the Department’s website at www.revenue.louisiana.gov. The statewide locations are listed on the back cover of this booklet.

AMENDED RETURNS

If you file your income tax return and later become aware of any changes you must make to income, deductions, exemptions, or credits, you must do the following: (1) file an amended (corrected) Louisiana return for the tax year being amended; (2) include an explanation of the change(s); (3) include a copy of the federal amended return, Federal Form 1040X, if one was filed; and (4) clearly mark an “X” in the “Amended Return” box on the face of Form IT-540. NOTE: Do not make any adjustments for refunds received or for payments made with the original return. This information is already on file.

FEDERAL TAX ADJUSTMENTS

Louisiana Revised Statute 47:103(C) requires taxpayers whose federal returns are adjusted to furnish a statement disclosing the nature and amounts of such adjustments within 60 days after the adjustments have been made and accepted. This statement should accompany your amended state return.

WHEN TO FILE

1. A 2008 calendar year return is due on or before May 15, 2009.
2. Returns for fiscal years are due on or before the 15th day of the fifth month, after the close of the taxable year.

WHERE TO FILE AND PAY TAX

For all returns: print your name(s) and Social Security Number(s) on any correspondence. NOTE: On a joint return, print names and the Social Security Numbers on Form IT-540 in the same order that you listed them on your federal return.

A return for which a payment is due should be mailed to P. O. Box 3550, Baton Rouge, LA 70821-3550. Print your Social Security Number(s) on your check or money order. Please do not send cash. An electronic payment option is available on the Department’s website at www.revenue.louisiana.gov.

You can also pay your taxes by credit card over the internet or by telephone. Visit www.officialpayments.com or call 1-888-2PAY-TAX (1-888-272-9829).

All other individual income tax returns should be mailed to P. O. Box 3440, Baton Rouge, LA 70821-3440.

EXTENSION OF TIME FOR FILING A RETURN

The Secretary of the Louisiana Department of Revenue may grant an extension of time for filing returns not to exceed six months from the date the Louisiana income tax return is due. Extensions must be filed before the tax return’s due date, May 15, 2009, for the 2008 return, and may be submitted either electronically via the Department of Revenue’s website, www.revenue.louisiana.gov, or by submitting Form R-2868 an Application for Extension of Time to File Louisiana Individual Income Tax. An Application is included in this booklet on page 45 and is also available on the Department’s website.

By requesting an extension, you are only requesting additional time to file your tax return. An extension does not extend the time to pay any tax that may be due. Payments received after the return due date will be charged interest and penalties. Please place the extension as the first page of your return.

INSTALLMENT REQUEST

If you are unable to pay the balance in full by the due date, you must submit an installment request, Form R-19026, which is available on the Department’s website at www.revenue.louisiana.gov.

INTEREST AND PENALTIES

See Interest and Penalty Calculation Worksheets, page 35.

KEEP YOUR RECORDS

You should keep copies of federal and state returns and W-2 statements for four years. In most cases, you should not submit a copy of your federal return. If you have completed Schedule H to claim federal disaster relief credits, submit the specified forms as indicated in the instructions.

CONSUMER EXCISE TAX RETURN

Louisiana imposes an excise tax on tobacco products and alcoholic beverages. If you purchased any of these products via the internet or through the mail, you are required to pay the excise tax on those products. You should use the Consumer Excise Tax Return, Form R-5629, available on the Department’s website at www.revenue.louisiana.gov to report and pay the tax due on these products.

ABOUT THIS FORM

The return has been designed for electronic scanning, which permits faster processing with fewer errors. In order to avoid unnecessary delays caused by manual processing, taxpayers should follow the guidelines listed below:

1. If it is provided, use the pre-addressed copy of the return imprinted with the taxpayer’s name(s) and address.
2. Print amounts only on those lines that are applicable.
3. Use only a pen with black ink.
4. Because this form is read by a machine, please print your numbers inside the boxes like this:

   0

   1

   2

   3

   4

   5

   6

   7

   8

   9

   X

5. All numbers should be rounded to the nearest dollar.
6. Numbers should NOT be printed over the pre-printed zeros, in the boxes on the far right, which are used to designate cents (.00).
7. To avoid any delay in processing, use this form for 2008 only.
8. If you are filing an amended return, mark an “X” in the “Amended Return” box on the face of the return.
9. If you are filing with an approved Louisiana extension, mark an “X” in the “extension attached” box on the face of the return. Please place the extension as page 1 of your return.

Nonresidents and part-year residents must use Form IT-540B to file their Louisiana return. Nonresident professional athletes must use Form IT-540B-NRA.

Name(s), address, and Social Security Number(s)

If you received a pre-addressed return, print your Social Security Number(s) in the space provided. Using the pre-addressed return helps identify your account, saves processing time, and speeds refunds. If you did not receive a booklet that was pre-addressed, print your name(s), address, and Social Security Number(s) on your return. If there is a change in your name or address since last year’s return (for example, new spouse), please mark the “Name Change” box and/or “Address Change” box on the face of the return. If married, please print Social Security Numbers for both you and your spouse.

On a joint return, print the Social Security Numbers in the same order that you show your first names. Your names and Social Security Numbers must be listed in the same order that you listed them on your federal return.

NOTE: If you are not required to file a federal return, but had Louisiana income tax withheld in 2008, do the following: (A) complete Lines 1 through 6D, (B) in the appropriate boxes above Line 7, enter all wages and income even though you may not be required to file a federal return and (C) mark the indicator block to the right. Skip to Line 16, and print zero “0” and complete the remainder of the return. IMPORTANT! You must enter all wages and income in the boxes above Line 7. Failure to do so will result in processing delays.

Lines 1-5 Filing status

You must use the same filing status on your Louisiana return as you did on your federal return. In the box on the left, print the number corresponding to your filing status: “1” for Single, “2” for Married Filing Jointly, “3” for Married Filing Separately, “4” for Head of Household, and “5” for qualifying Widow(er). Head of Household status is for unmarried people who paid over half the cost of keeping up a home for a qualifying person. If you file as Head of Household, you must show the name of the qualifying person in the space provided if the person is not a dependent.

Lines 6A and 6B Exemptions

Mark an “X” in the appropriate box(es). You must use the same number of exemptions on your Louisiana return as you did on your federal return, unless: (A) you are listed as a dependent on someone else’s return, (B) you are age 65 or over, or (C) you are blind. You must claim an exemption for yourself on Line 6A, even if someone else claimed you on his or her federal tax return. This box has already been marked with an “X” for you.

Line 6C

Print the name(s) of the dependents listed on your federal return. Complete the required information. If you have more than 6 dependents, attach a statement to your return with the required information. In the box on Line 6C, print the total number of dependents claimed.

Line 6D

Add Lines 6A, 6B, and 6C. Print the total number of exemptions in the boxes.

Line 7

Print the amount of your Federal Adjusted Gross Income. This amount is taken from: (A) Federal Form 1040EZ, Line 4, OR (B) from Federal Form 1040A, Line 21, OR (C) from Federal Form 1040, Line 37. If your Federal Adjusted Gross Income is less than zero, print “0.”

The following residents should use Schedule E to determine their Louisiana Adjusted Gross Income: (1) residents with exempt income, such as interest on U.S. government obligations and public employee retirement systems, (2) residents with recapture of START contributions, (3) residents with interest income from obligations of other states and their political subdivisions, (4) residents 65 years of age or over, with annual retirement income taxable to Louisiana, and (5) residents who are active duty military and have served 120 or more consecutive days out-of-state during the calendar year.

In order to complete Schedule E, you may need to first compute your modified federal income tax deduction for Louisiana purposes if you are claiming federal disaster relief credits on your 2008 federal return. Mark the box on the face of Form IT-540 if the amount from Schedule E, Line 5C is used.

Line 8A

If you did not itemize your deductions on your federal return, leave Lines 8A through 8D blank. If you did itemize your deductions, enter on Line 8A the amount of your federal itemized deductions, shown on Federal Form 1040, Schedule A, Line 29.

Line 8B

If you did not itemize your deductions on your federal return, leave this line blank. If you did itemize your deductions and your filing status is: 1 or 3, print $5,450; 2 or 5, print $10,900; 4, print $8,000.

Line 8C

Subtract Line 8B from Line 8A. If less than zero, print zero “0.”

Line 8D

Multiply Line 8C by 65% (.65). Print the result on Line 8D. If you did not itemize your deductions on your federal return, leave this line blank.

Line 9

If you HAVE claimed federal disaster relief credits on your federal return as a result of Hurricane Katrina or Hurricane Rita, you must complete Schedule H in order to determine your modified federal income tax deduction for Louisiana. The federal disaster relief credits utilized for this year and allowed by the Internal Revenue Service (IRS) could be credits that are carried forward from 2005 or 2006. However, the credits must appear on your federal return. Attach a copy of your federal return which indicates the amount of the credit, a copy of Federal Form 3800, and a copy of the appropriate IRS form in order to substantiate the amount of the credit.

If you HAVE NOT claimed federal disaster relief credits, print your federal income tax liability on Line 9. This amount is taken from your federal return. Below are the federal returns and line numbers that indicate your federal income tax liability.

• Federal Form 1040EZ filers: This amount is on Line 11.
• Federal Form 1040A filers: This amount is on Line 35.
• Federal Form 1040 filers: This amount is on Line 56, minus the amount from Form 4972, which is on Line 44.

Optional deduction – The federal tax deduction above may be increased by the amount of foreign tax credit claimed on Federal Form 1040, Line 47. If this additional deduction is claimed, no special allowable credit may be claimed on Louisiana Nonrefundable Tax Credits, Schedule G, Line 4.

Line 10

Subtract Line 8D and Line 9 from Line 7, and print the result. If less than zero, print zero “0.”

Line 11

Use the tax table that corresponds with your filing status. Locate the amount of your tax table income from Line 10 in the first two columns of the tax table. Read across to the column numbered the same as the total number of exemptions claimed on Line 6D. The amount shown in that column is your Louisiana tax liability. Print this amount on Line 11 of the return. If you have more than 8 exemptions, refer to the instructions at the top of the tax tables.

Line 12A

Federal Child Care Credit – If you have claimed a Federal Child Care Credit on either Federal Form 1040A, Line 29, or on Federal Form 1040, Line 48, print the amount.

Line 12B

Print the amount of your 2008 Louisiana Nonrefundable Child Care Credit. This amount is determined from the Louisiana Nonrefundable Child Care Credit Worksheet on page 28. Your Federal Adjusted Gross Income must be greater than $25,000 to claim this credit.

Line 12C

Print the amount of your Louisiana Nonrefundable Child Care Credit carried forward from 2004 through 2007. NOTE: The amount of your 2003 Nonrefundable Child Care Credit Carryforward cannot be included in this amount. To determine the carry forward amount, refer to the Louisiana Nonrefundable Child Care Credit Worksheet on page 28.

Line 12D

Print the amount of your Louisiana Nonrefundable School Readiness Credit. Your Federal Adjusted Gross Income must be greater than $25,000 to claim this credit. The amount is determined from your Nonrefundable School Readiness Credit Worksheet on page 29. In the boxes under Line 12D, print the number of your qualified dependents who attended the associated quality Star rated facility or facilities.

Line 13

A credit of $25 is allowed for each dependent child claimed on Line 6C who attended school from kindergarten through 12th grade for at least part of this year. Multiply the number of qualified dependents by $25 and print the result.

Line 14

Print the amount of the total Other Nonrefundable Tax Credits. This amount is from Louisiana Form IT-540, Schedule G, Line 11.

Line 15

Add Lines 12B through 14 and print the result.

Line 16

Subtract Line 15 from Line 11 and print the result. If you are not required to file a federal return, print zero “0,” and complete the remainder of the return.

Line 17

During 2008, if you purchased goods for use in Louisiana from outside the state and were not properly charged Louisiana state sales tax, you are required to file and pay the tax directly to the Louisiana Department of Revenue. This can include purchases from catalogs, television, internet, another state, or outside the U.S. See the Consumer Use Tax Worksheet below. If any of the items were alcoholic beverages or tobacco products, you are required to file a Consumer Excise Tax Return, R-5629, which can be found on the Department’s website at www.revenue. louisiana.gov.

Line 18

Add Lines 16 and 17 and print the result.

Line 19

Print the amount of your 2008 Louisiana Refundable Child Care Credit. This amount is from the 2008 Louisiana Refundable Child Care Credit Worksheet, page 31, Line 11. You must attach this worksheet to your return. Your Federal Adjusted Gross Income must be $25,000 or less to claim a credit on this line.

Line 19A

Print the amount from the 2008 Louisiana Refundable Child Care Credit Worksheet, page 31, Line 3.

Line 19B

Print the amount from the 2008 Louisiana Refundable Child Care Credit Worksheet, page 31, Line 6.

Line 20

Print the amount of your Louisiana Refundable School Readiness Credit. Your Federal Adjusted Gross Income must be less than or equal to $25,000 to claim this credit. The amount is determined from your Louisiana Refundable School Readiness Credit Worksheet on page 33. In the boxes under Line 20, print the number of your qualified dependents who attended the associated quality Star rated facility or facilities.

Line 21

Print the amount of your Louisiana Earned Income Credit (LA EIC). If you claimed a Federal Earned Income Credit (EIC), you are entitled to a LA EIC as provided under La. R.S. 47:297.8. The refundable credit is equal to 3.5% (.035) of your Federal EIC. See the Louisiana Earned Income Credit (LA EIC) Worksheet, page 34.

Line 22

Print the amount of the Louisiana Citizens Property Insurance assessment that was included in your homeowner’s insurance premium. You must attach a copy of the declaration page of your insurance policy in order to claim the credit. For additional information regarding this credit, see Revenue Information Bulletin (RIB) 07-015 on the Department’s website. See the Louisiana Property Insurance Credit Worksheet, page 34.

Line 23

Print the amount of your Louisiana Property Insurance Credit. For 2008 only, a refundable credit is allowed for a portion of the premiums paid on the primary residence for a homeowner’s insurance policy, a condominium owner’s insurance policy, or a tenant homeowner’s insurance policy. See the Louisiana Property Insurance Credit Worksheet, page 34.

Line 24

Print the amount of the total Other Refundable Tax Credits. This amount is from Louisiana Form IT-540, Schedule F, Line 7.

Line 25

Print the amount of Louisiana income tax withheld in 2008. In order for credit to be allowed, you must attach copies of all W-2 forms that indicate tax was withheld. If the withholding amount exceeds 10 percent (.10) of the income shown on Form IT-540, Line 7, you must attach a copy of your federal return.

Line 26

Print the amount of any credit carried forward from 2007. This amount is shown on your 2007 Louisiana Form IT-540, Line 40 or IT-540B, Line 41.

Line 27

Print the amount of any payment made on your behalf by a composite partnership filing. Print the name of the partnership on the line provided on the return. If more than one partnership made a payment on your behalf, attach a schedule [with your name(s) and Social Security Number(s)] listing each partnership and payment made.

Line 28

Print the total amount of estimated payments you made for the 2008 tax year.

Line 29

If you filed an extension request for the 2008 taxable year, print the amount of any payment you made with that extension request.

Line 30

Add Lines 19, 20 through 29 and print the result. Do not include amounts on Line 19A and 19B.

Line 31

If Line 30 is equal to Line 18, print zero “0” on Lines 31 through 44 and go to Line 45. If Line 30 is greater than Line 18, subtract Line 18 from Line 30 and print the result. Your overpayment may be reduced by the Underpayment of Estimated Tax Penalty. If Line 30 is less than Line 18, print zero “0” on Lines 31 through 43 and go to Line 44.

Name Boxes - Please print the first 4 characters of the primary taxpayer’s last name in the boxes at the bottom of the second and third page.

Line 32

Although you may have an overpayment, if you failed to sufficiently pay income tax throughout the year, in accordance with La. R.S. 47:117.1, you may be subject to the underpayment penalty. Complete the 2008 Form R-210R available on our website and print the amount from Line 19 of the form on this line. Attach the completed R-210R to your return. If you are a farmer, mark the box on Line 32.

Line 33

If Line 31 is greater than Line 32, subtract Line 32 from Line 31 and print the result. If Line 32 is greater than Line 31, print zero “0”, subtract Line 31 from Line 32, and print the balance on Line 44.

Line 34

You may donate all or part of your adjusted overpayment (Line 33) to The Military Family Assistance Fund. This fund provides assistance to family members of activated Louisiana military personnel.

Line 35

You may contribute an amount of your adjusted overpayment (Line 33) to the START Savings Program. IMPORTANT: If filing a joint return, you or your spouse must be a registered account owner in the START Savings Program in order to contribute all or part of your overpayment. If you are not an account holder and wish to enroll in this program, you may contact the Louisiana Office of Student Financial Assistance at 1-800-259-5626, or through their website at www.startsaving.la.gov. All contributions made by means of your overpayment will be equally distributed among the account holder’s beneficiaries.

Line 36

You may donate all or part of your adjusted overpayment (Line 33) to the Wildlife Habitat and Natural Heritage Trust Fund. This fund provides for the acquisition and management of lands used for state parks, state forests, and wildlife and fishery management areas.

Line 37

You may donate all or part of your adjusted overpayment (Line 33) for the purpose of combating prostate cancer.

Consumer Use Tax Worksheet
Under La. R.S. 47:302(K), the Department is required to collect an 8 percent tax on out-of-state purchases subject to use tax. This 8 percent rate (which includes 4 percent to be distributed by the Department to local governments) is in lieu of the actual rate in effect for your area, and is payable regardless of the actual combined state and local rate for your area. This law ensures that Louisiana businesses are not at a competitive disadvantage with out-of-state businesses who are not required to collect sales tax.
1. Taxable purchases. Tax rate (8%)	$ _____.00 x .08
2. Total use tax due	$ _____.00

Line 38

You may donate all or part of your adjusted overpayment (Line 33) to the Louisiana Animal Welfare Commission for the purpose of promoting the proper treatment and well-being of animals.

Line 39

You may donate all or part of your adjusted overpayment (Line 33) to the Community-Based Primary Health Care Fund. This fund provides for access to primary health care for the indigent and low-income citizens.

Line 40

Add Lines 34 through 39 and print the result.

Line 41

Subtract Line 40 from Line 33 and print the result. This amount of overpayment is available for credit or refund.

Line 42

Print the amount of available overpayment shown on Line 41 that you wish to credit to 2009.

Line 43

Subtract Line 42 from Line 41 and print the amount. This amount is to be refunded.

Line 44

If Line 30 is greater than or equal to Line 18, print zero “0.” If Line 18 is greater than Line 30, subtract Line 30 from Line 18 and print the result. If you entered an amount as the result of underpayment penalty exceeding an overpayment, go to Line 45. Print zero “0” on Lines 46 through 49.

Line 45

You may make an additional donation to the Military Family Assistance Fund. This fund provides assistance to family members of activated Louisiana military personnel.

Line 46

Interest is charged on all tax amounts that are not paid on time. Print the amount from the Interest Calculation Worksheet, page 35, Line 5.

Line 47

If you fail to file your tax return by the due date – on or before May 15, 2009, for calendar year filers, on or before your fiscal year due date, or on or before your approved extension date, you may be charged delinquent filing penalty. Print the amount from the Delinquent Filing Penalty Calculation Worksheet, page 35, Line 7.

Line 48

If you fail to pay 90 percent (.90) of the tax due by the due date – on or before May 15, 2009, for calendar year filers, you may be charged delinquent payment penalty. Print the amount from the Delinquent Payment Penalty Calculation Worksheet, page 35, Line 7.

Line 49

If you have a tax deficiency, you may be charged an underpayment penalty. Complete the 2008 Form R-210R and print the amount from Line 19 of the form on this line. Attach the completed R-210R to your return. If you are a farmer, mark the box on Line 49.

Line 50

Balance due Louisiana – Add Lines 44 through 49 and print the result. You may make payment by credit card or electronic debit through the Department’s website at www.revenue.louisiana.gov. You may also make payment by check or money order. PLEASE DO NOT SEND CASH. Make your check or money order payable to the Louisiana Department of Revenue. Write your Social Security Number(s) on your check or money order and attach it to your return.

You can also pay your taxes by credit card over the internet or by telephone. Visit www.officialpayments.com or call 1-888-2PAY-TAX (1-888-272-9829).

Social Security Numbers – Please print your social security number in boxes provided on each page of your return.

Name Boxes – Please print the first 4 characters of the primary taxpayer’s last name in the boxes next to the signature line.

Filing – YOU MUST SIGN AND DATE YOUR RETURN. If married filing jointly, both spouses must sign. In the appropriate space, please indicate a daytime telephone number. If you filed for an extension, please mark the extension box on Form IT-540, page 1 and place a copy of the extension as the first page of the return. If your return was prepared by a paid preparer, that person must also sign in the appropriate space, and enter his or her identification number. DO NOT SUBMIT A PHOTOCOPY OF THE RETURN. Only submit an original return.