Louisiana Form IT-540 - Individual Income Tax Return Instructions

General Information

WHO MUST FILE A RETURN

  1. 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 2010.
  2. You must file a return to obtain a refund or credit if you overpaid your tax through: withholding, declaration of estimated tax, credit carried forward, composite partnership payments made on your behalf, claiming a 2010 refundable child care credit or a Louisiana earned income credit.
  3. If you are not required to file a federal return but had Louisiana income tax withheld in 2010, you must file a return to claim a refund of the amount withheld. 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.
  4. 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 Louisiana, you should file a resident return (Form IT-540), reporting all of your income to Louisiana.

    Any military personnel whose domicile is NOT Louisiana must report any nonmilitary Louisiana sourced income on Form IT-540B. The federal Military Spouses Residency Relief Act has extended certain residency protections to spouses of military members. Under this Act, a spouse’s state of residence does not change when he or she moves to a new state to be with a service- member who is under military orders to be in the new state. A spouse who is NOT a resident of Louisiana but is in Louisiana solely to be with a Louisiana stationed servicemember who is NOT a resident of Louisiana must report all Louisiana sourced income other than wages, interest, or dividends, on Form IT-540B. Income earned within or derived from Louisiana sources such as rents, royalties, estates, trusts, or partnerships is taxable to Louisiana. See Revenue Information Bulletin 10-005 for more information.

    If you are married and one of you is not a resident of Louisiana, you may file as a resident (Form IT-540), or a nonresident (Form IT-540B), whichever is more beneficial to you and your spouse. Resident taxpayers are allowed a credit for income tax 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 who are members of the armed services and were stationed out-of-state for 120 or more consecutive days on active duty may be entitled to an exemption of up to $30,000 of military income. See the instructions for Schedule E, page 22, Code 10E.

  5. Nonresident professional athletes must use Form IT-540B-NRA.
  6. A temporary absence from 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 taken to establish a new domicile outside of Louisiana, and by actions 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 states.
  7. Surviving Spouses, Executors, Administrators, or Legal Representatives – A final return for a decedent must be filed if you are the surviving spouse, executor, administrator, or legal representative, and the decedent met the filing requirements at the date of death. If both conditions apply, mark the decedent box on the face of the return for the appropriate taxpayer and attach a copy of the death certificate. If a refund is due to the decedent’s estate, survivor, etc., you must also complete and attach Form R-6642 Statement of Claimant to Refund Due on Behalf of Deceased Taxpayer.

FORMS

Forms and instructions are on the LDR website, www.revenue.louisiana.gov/taxforms.

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 file an amended (corrected) Louisiana return. You must use the correct form for the tax year being amended, mark an “X” in the “Amended Return” box on the face of the return, include an explanation of the change and a copy of the federal amended return, Federal Form 1040X, if one was filed.

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

WHEN TO FILE

  1. A 2010 calendar year return is due on or before May 15, 2011.
  2. Returns for fiscal years are due on or before the 15th day of the fifth month after the close of the taxable year.
  3. If the due date falls on a weekend or legal holiday, the return is due the next business day.

WHERE TO FILE AND PAY TAX

Print your name and Social Security Number on your return and any correspondence. NOTE: On a joint return, print the 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 the last four digits of your Social Security Number on your check or money order. DO NOT SEND CASH. An electronic payment option is available on the LDR website at www.revenue.louisiana.gov/fileonline.

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 due date of the return. An extension can be requested on the LDR website at www.revenue.louisiana.gov/ fileonline.

By requesting an extension, you are only requesting additional time to file your tax return. An extension does not extend the time to pay the tax. Payments received after the due date will be charged interest and penalties.

INSTALLMENT REQUEST

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

INTEREST AND PENALTIES

See Interest and Penalty Calculation Worksheet on page 35.

KEEP YOUR RECORDS

You should keep copies of federal and state tax returns and W-2 statements for four years. In most cases, you do not have to submit a copy of your federal return with your state returns. 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 on 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, to report and pay the tax due on these products.

WHAT’S NEW FOR LOUISIANA 2010 INDIVIDUAL INCOME TAX?

CHANGES TO THE TAX RETURN

The Spec Code box has been moved to the bottom of the fourth page of the return. The Spec Code is only used when instructed by LDR.

Child Care Credit Carried Forward From 2006 Through 2009 – Line 12C – The child care tax credit for taxpayers whose federal adjusted gross income exceeds $25,000 may not be refunded and any unused credit amounts can be carried forward for up to five years. For the 2010 tax year, credits from 2006 through 2009 can be applied on Line 12C. Any remaining child care credit from 2005 can not be applied to the 2010 tax liability. (R.S. 47:297.4)

School Readiness Credit Carried Forward From 2008 Through 2009 – Line 12E – The school readiness credit for taxpayers whose federal adjusted gross income exceeds $25,000 may not be refunded and any unused credit amounts can be carried forward for up to five years. For the 2010 tax year, credits from 2008 through 2009 can be applied on Line 12E. (R.S. 47:297.7)

Donation to Louisiana Chapter of the National Multiple Sclerosis Society Fund – Line 41 – Taxpayers can donate all or part of their refund to the Louisiana Chapter of the National Multiple Sclerosis Society Fund to advance research for a cure and to address the challenges of those affected by MS. On Line 49, taxpayers can make an additional donation to the fund. (R.S. 47:120.85)

SCHEDULE E – ADJUSTMENTS TO INCOME

Capital Gain from Sale of Louisiana Business – Code 20E - Taxpayers are allowed a deduction for net capital gains resulting from the sale or exchange of an equity interest or from the sale or exchange of substantially all of the assets of a nonpublicly traded corporation, partnership, limited liability company, or other organization commercially domiciled in Louisiana. Attach a copy of your federal return and supporting forms and a schedule showing the calculation of the deduction. See Revenue Information Bulletin 10-017 for more information. (R.S. 47:293(9)(a)(xvii))

SCHEDULE F – REFUNDABLE CREDITS

Sugarcane Trailer Conversion Credit – Code 69F – The credit for 2010 is limited to $8,000 per trailer. See Revenue Information Bulletin 09-026 for more information. (R.S. 47:6029)

VISIT THESE LDR WEBSITES:

www.revenue.louisiana.gov/taxforms for forms and instructions. www.revenue.louisiana.gov/individuals for tax information www.revenue.louisiana.gov/fileonline for free filing and payment options

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. Print amounts only on those lines that are applicable.
  2. Use only a pen with black ink.
  3. Because this form is read by a machine, print your numbers inside the boxes
  4. All numbers should be rounded to the nearest dollar.
  5. Numbers should NOT be printed over the pre-printed zeros, in the boxes on the far right, which are used to designate cents (.00).
  6. To avoid any delay in processing, use this form for 2010 only.
  7. If you are filing an amended return, mark an “X” in the “Amended Return” box on the face of the 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, address, and Social Security Number – Print your name, address, daytime telephone number, and Social Security Number on your return. If there is a change in your name or address since last year’s return (for example, new spouse), mark the “Name Change” or “Address Change” box. In order to complete the address change, you must notify the Post Office and your account will reflect the change through automatic updates from the Post Office. Failure to notify the Post Office of your address change will result in your account not being updated. A direct address update can also be accomplished by filing your tax return electronically. If married, print Social Security Numbers for both you and your spouse. On a joint return, 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 2010, complete Lines 1 through 6D. In the appropriate boxes above Line 7, enter the total amount of wages and income and mark the box to the right. Skip to Line 16, print zero “0” and complete the remainder of the return. You must enter the total amount of 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 boxes. You must use the same number of exemptions on your Louisiana return as you did on your federal return, unless: you are listed as a dependent on someone else’s return, you are age 65 or over, you are blind, or your filing status is Qualifying Widow(er). You must claim an exemption for yourself on Line 6A, even if someone else claimed you on their federal tax return. This box has already been marked with an “X” for you.

Line 6C – Print the names 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 Federal Form 1040EZ, Line 4; OR from Federal Form 1040A, Line 21; OR 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 age 65 years or older with annual retirement income taxable to Louisiana.
  5. Residents who are active duty military and have served 120 or more consecutive days out-of-state during the calendar year.
  6. Residents who have paid school tuition, home-schooled educational expenses, or public school educational expenses for qualified dependents.

Mark the box on Line 7 if the amount from Schedule E, Line 5C is used. In order to complete Schedule E, you may need to first compute your modified federal income tax deduction for Louisiana purposes if you claimed federal disaster relief credits on your 2010 federal return.

Line 8A, 8B and 8C – If you did not itemize your deductions on your federal return, skip Lines 8A, 8B and 8C and go to Line 9.

Line 8A – If you itemized your deductions on your federal return, print the amount of your federal itemized deductions, shown on Federal Form 1040, Schedule A, Line 29.

Line 8B – If you itemized your deductions on your federal return and your filing status is 1 or 3, print $5,700; 2 or 5, print $11,400; 4, print $8,400.

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

Line 9 – If you claimed federal disaster relief credits on your federal return as a result of Hurricane Katrina or Hurricane Rita, you must complete Schedule H to determine your modified federal income tax deduction for Louisiana. The federal disaster relief credits claimed for this year and allowed by the IRS could be credits that are carried forward from previous years. However, the credits must be utilized on your federal return. Attach a copy of your federal return that indicates the amount of the credit, a copy of Federal Form 3800, and a copy of the appropriate IRS form 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, Line 11.
  • Federal Form 1040A, Line 35.
  • Federal Form 1040, Line 55, minus the amount from Form 4972, reported 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 8C 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 – If you have claimed a Federal Child Care Credit on either Federal Form 1040A, Line 29, or Federal Form 1040, Line 48, print the amount.

Line 12B – Print the amount of your 2010 Louisiana Nonrefundable Child Care Credit. This amount is determined from the Louisiana Nonrefundable Child Care Credit Worksheet on page 29. Your Federal Adjusted Gross Income must be greater than $25,000 to claim this credit. See instructions on page 28.

Line 12C – Print the amount of your Louisiana Nonrefundable Child Care Credit carried forward from 2006 through 2009. The amount of your 2005 Nonrefundable Child Care Credit Carryforward cannot be included in this amount. To determine the carry forward amount, use the Louisiana Nonrefundable Child Care Credit Worksheet on page 29.

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 30. In the boxes under Line 12D, print the number of your qualified dependents who attended the associated star rated facility or facilities.

Line 12E – Print the amount of your Louisiana Nonrefundable School Readiness Credit carried forward from 2008 through 2009. To determine the carry forward amount, use the Louisiana Nonrefundable School Readiness Credit Worksheet on page 30.

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 Other Nonrefundable Tax Credits from 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 less than zero or if you are not required to file a federal return, print zero “0,” and complete the remainder of the return.

Line 17 – During 2010, if you purchased goods for use in Louisiana from outside the state and were not charged Louisiana state sales tax, you are required to file and pay the tax directly to LDR. This includes 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 is posted on LDR’s website.

Line 18 – Add Lines 16 and 17 and print the result.

Line 19 – Print the amount of your 2010 Louisiana Refundable Child Care Credit from the 2010 Louisiana Refundable Child Care Credit Worksheet, page 31, Line 11. This worksheet must be attached to your return. Your Federal Adjusted Gross Income must be $25,000 or less to claim a credit on this line. See instructions on page 28.

Line 19A – Print the amount from the 2010 Louisiana Refundable Child Care Credit Worksheet, page 31, Line 3.

Line 19B – Print the amount from the 2010 Louisiana Refundable Child Care Credit Worksheet, page 31, Line 6.

Line 20 – Print the amount of your 2010 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 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 R.S. 47:297.8. The refundable credit is equal to 3.5 percent of your Federal EIC. See the Louisiana Earned Income Credit Worksheet, page 33.

Line 22 – Print the amount of the Louisiana Citizens Property Insurance assessment that was included in your homeowner’s insurance premium. A copy of the declaration page from your premium notice must be attached to your return. For additional information regarding this credit, see Revenue Information Bulletin 07-015 at www.revenue.louisiana.gov/citizens.

Line 23 – Print the amount of the Other Refundable Tax Credits from Form IT-540, Schedule F, Line 7.

Line 24 – Print the amount of Louisiana income tax withheld in 2010. You must attach copies of all W-2 and 1099 forms that indicate tax was withheld. If the withholding amount exceeds 10 percent of the income shown on Form IT-540, Line 7, you must attach a copy of your federal return.

Line 25 – Print the amount of any credit carried forward from 2009. This amount is shown on your 2009 Form IT-540, Line 43 or IT-540B, Line 43.

Line 26 – 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 labeled with your name and Social Security Number and list each partnership and payment made.

Line 27 – Print the total amount of estimated payments you made for the 2010 tax year.

Line 28 – Print the amount of the payment made with your 2010 extension request.

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

Line 29 – Add Lines 19, 20 through 28 and print the result. Do not include amounts on Line 19A and 19B.

Line 30 – If Line 29 is equal to Line 18, print zero “0” on Lines 30 through 46 and go to Line 47. If Line 29 is greater than Line 18, subtract Line 18 from Line 29 and print the result. Your overpayment may be reduced by the Underpayment of Estimated Tax Penalty. If Line 29 is less than Line 18, print zero “0” on Lines 30 through 45 and go to Line 46.

Line 31 – Although you may have an overpayment, if you failed to sufficiently pay income tax throughout the year, in accordance with R.S. 47:117.1, you may be subject to the underpayment penalty. Complete the 2010 Form R-210R available on LDR’s website and print the amount from Line 19 on this line. Attach the completed R-210R to your return. If you are a farmer, mark the box on Line 31.

Line 32 – If Line 30 is greater than Line 31, subtract Line 31 from Line 30 and print the result. If Line 31 is greater than Line 30, print zero “0”, subtract Line 30 from Line 31, and print the balance on Line 46.

Line 33 – You may donate all or part of your adjusted overpayment (Line 32) to The Military Family Assistance Fund. This fund provides assistance to family members of activated Louisiana military personnel.

Line 34 – You may donate all or a part of your adjusted overpayment (Line 32) to the Coastal Protection and Restoration Fund for the purposes of coastal restoration, conservation, and hurricane protection.

Line 35 – You may contribute an amount of your adjusted overpayment (Line 32) to the Louisiana Student Tuition Assistance and Revenue Trust (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 do not have an account, you may contact the Louisiana Office of Student Financial Assistance at 1-800-259-5626, or go to www.startsaving.la.gov to enroll. All contributions 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 32) 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 32) for the purpose of combating prostate cancer.

Line 38 – You may donate all or part of your adjusted overpayment (Line 32) 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 32) 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 – You may donate all or a part of your adjusted overpayment (Line 32) to the National Lung Cancer Partnership to combat lung cancer through research, awareness, and advocacy. For more information on the fund, visit www.nationallungcancerpartnership.org.

Line 41 – You may donate all or part of your adjusted overpayment (Line 32) to the Louisiana Chapter of the National Multiple Sclerosis Society Fund to advance research for a cure and to address the challenges of those affected by MS.

Line 42 – Add Lines 33 through 41 and print the result.

Line 43 – Subtract Line 42 from Line 32 and print the result. This amount of overpayment is available for credit or refund.

Line 44 – Print the amount of available overpayment shown on Line 43 that you wish to credit to 2011.

Line 45 – Subtract Line 44 from Line 43 and print the result. This amount is to be refunded.

Name Boxes – Print the first 4 characters of the primary taxpayer’s last name in the boxes at the bottom of the second, third and fourth page.

Line 46 – If Line 18 is greater than Line 29, subtract Line 29 from Line 18 and print the result. If you entered an amount from Line 32 as the result of underpayment penalty exceeding an overpayment, complete Lines 47, 48, and 49, print zero “0” on Lines 50 through 53, and go to Line 54.

Lines 47, 48, and 49 – You may make an additional donation to the funds listed on Lines 47 through 49. You must include payment for the amount being donated with your return. The donation will not be made unless you make payment.

Line 50 – Interest is charged on all tax amounts not paid by the due date. Print the amount from the Interest Calculation Worksheet, page 35, Line 5.

Line 51 – If you fail to file your tax return by the due date – on or before May 15, 2011, 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 52 – If you fail to pay 90 percent of the tax due by the due date – on or before May 15, 2011, 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 53 – If you have a tax deficiency, you may be charged an underpayment penalty. Complete the 2010 Form R-210R and print the amount from Line 19 on this line. Attach the completed R-210R to your return. If you are a farmer, mark the box on Line 53.

Line 54 – Add Lines 46 through 53 and print the result. You may make payment by credit card or electronic debit at www.revenue.louisiana. gov/fileonline. You may also make payment by check or money order. DO NOT SEND CASH. Make your check or money order payable to the Louisiana Department of Revenue. Print the last four digits of your Social Security Number 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 – Print your social security number in boxes provided on each page of your return.

Name Boxes – Print the first 4 characters of the primary taxpayer’s last name in the boxes under the signature line.

Filing – YOU MUST SIGN AND DATE YOUR RETURN. If married filing jointly, both spouses must sign. 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.

Instructions for Schedule E – Adjustments to Income

Line 1 – Print the amount of your Federal Adjusted Gross Income. This amount is shown either on your Federal Form 1040EZ, Line 4; OR your Federal Form 1040A, Line 21; OR your Federal Form 1040, Line 37. If the amount is less than zero, print zero “0.”

Line 2 – Tax-exempt interest and dividend income reported on your federal return are taxable to Louisiana if ALL of the following conditions are met:

  1. You are filing as a resident of Louisiana.
  2. The interest or dividend income is received from obligations of a state or political subdivision of a state other than Louisiana. Obligations of the State of Louisiana, its political subdivisions, or public corporations created by them and their constituted authorities are exempt from Louisiana taxes.
  3. The obligations were purchased on or after January 1, 1980.

Print the TOTAL taxable interest and dividends. Do not list interest and dividends separately.

Line 2A – Print any previously exempted Louisiana Student Tuition Assistance and Revenue Trust (START) contributions that were refunded to you during 2010 by the Louisiana Office of Student Financial Aid.

Line 3 – Add Lines 1, 2, and 2A and print the result.

EXEMPT INCOME LINES 4A THROUGH 4H

Below is a list of income items that are considered exempt by Louisiana law to arrive at Louisiana taxable income. These income exclusions are referenced individually by a three-digit code. Print the description, identifying code, and dollar amount in the appropriate spaces on Lines 4A through 4H.

NOTE: Use only the codes referenced in the table on Schedule E. The codes listed here are not interchangeable with other codes listed in this booklet.

CODE EXEMPTION DESCRIPTION
01E Interest and Dividends on US Government Obligations – Print the amount of interest and dividends received from U.S. government obligations that are included in the amount on Line 1 of Schedule E. Include amounts received from mutual funds, which are identified as income from investments in U.S. government obligations. If the amount is not identified specifically, it is taxable and cannot be excluded.
02E Louisiana State Employees’ Retirement Benefits – Print the amount of retirement benefits received from the Louisiana State Employees’ Retirement System. This amount should be included in the amount on Schedule E, Line 1.
03E Louisiana State Teachers’ Retirement Benefits – Print the amount of retirement benefits received from the Louisiana State Teachers’ Retirement System. This amount should be included in the amount on Schedule E, Line 1.
04E Federal Retirement Benefits – Print the amount of retirement benefits received from a Federal Retirement System. This amount should be included in the amount on Schedule E, Line 1.
05E Other Retirement Benefits – Print the amount of retirement benefits received from any retirement systems whose benefits are specifically exempted by law from Louisiana income tax. In the space provided, print the name of the retirement system or the statutory citation exempting these benefits from Louisiana income tax. A list of the eligible retirement systems and their statutory citations can be found in the LDR publication, R-40058, Credits, Exemptions, Exclusions, and Deductions for Individual and Corporation Income Tax, Corporation Franchise Tax, Inheritance Tax and Gift Tax, available on LDR’s website.
06E

Annual Retirement Income Exemption for Taxpayers 65 Years of Age or Older – Up to $6,000 of your annual retirement income may be exempted from state taxation if your filing status is single, head of household, married filing separately, or qualifying widow(er), and you are 65 years of age or older. If your filing status is married filing jointly, both you and your spouse are age 65 years or older, and each of you received annual retirement income, up to $6,000 of the annual retirement income that each taxpayer receives may be exempt from state taxation. “Annual retirement income” that is taxable to Louisiana is any distributions from a pension or an annuity that you receive and report on Federal Form 1040A, Lines 11b and 12b or Federal Form 1040, Lines 15b and 16b. Do not include retirement benefits that are coded as 02E, 03E, 04E, or 05E. Print the name of the pension or annuity on the line provided.

If your filing status is single, head of household, married filing separately, or qualifying widow(er), determine the exempt amount that should be entered for code 06E by completing the FIRST COLUMN of the worksheet provided .

If your filing status is married filing jointly, determine the exempt amount that should be entered for code 06E by completing BOTH COLUMNS of the worksheet provided.

07E Taxable Amount of Social Security – Social Security benefits that are taxed on your federal return are exempt from Louisiana tax. Print the amount shown on your Federal Form 1040A, Line 14b or Federal Form 1040, Line 20b.
08E Native American Income – Louisiana Administrative Code 61:I.1303 provides that income derived from sources on the reservation that have been earned or received by an enrolled member of a federally recognized Indian tribe who resides on that tribe’s reservation shall be exempted from Louisiana individual income tax. The income derived from sources outside of the reservation, including sources outside of Louisiana, that have been earned or received by an enrolled member of a federally recognized Indian tribe residing on that tribe’s reservation is taxable for Louisiana individual income tax purposes. Income earned by a member of a federally recognized tribe residing off of the tribe’s reservation in Louisiana is taxable regardless of the income source. Additionally, an enrolled member of a federally recognized Indian tribe who resides on the reservation for a portion of the year and resides off the reservation for a portion of the year is taxed based on where the enrolled member resided when the income was earned.
09E START Savings Program Contributions – R.S. 47:293(9)(a)(vi) provides that any Louisiana Student Tuition Assistance and Revenue Trust (START) account holders with a filing status of single, married filing separately, head of household, and qualifying widow(er) can exempt up to $2,400 per beneficiary from Louisiana taxable income. Account holders with a filing status of married filing jointly can each exempt up to $4,800 per beneficiary from Louisiana taxable income. In certain situations, the exemption amount can be doubled. See Revenue Information Bulletin 06-003 on LDR’s website.
10E Military Pay Exclusion – R.S. 47:293(9)(e) provides an exclusion to Louisiana residents who were on active duty in the U.S. armed forces for 120 or more consecutive days. The exempt portion is the compensation earned outside of Louisiana during and after 120 plus consecutive days of active duty, up to $30,000. Example: If on January 15, 2010, you went on active duty and continuously remained on active duty at least through May 14, 2010 (120 days) during which you served 40 days in Louisiana and the remainder outside of Louisiana, income from the 41st day forward is exempt, up to $30,000, once your have served more than 120 consecutive days. Retain a copy of your official orders, including endorsements that establish your 120 plus consecutive days of active duty with your 2010 return. If filing electronically, bring a copy of your orders including endorsements to your tax preparer.
11E Road Home – R.S. 47:293(9)(a)(i) provides that any grant, loan, or other benefit directly or indirectly provided to a taxpayer by a hurricane recovery entity shall be excluded if the income was included in the taxpayer’s Federal Adjusted Gross Income. Hurricane recovery entities that provided benefits are the Road Home Corporation, the Louisiana Recovery Authority, or the Louisiana Family Recovery Corps.
13E Recreation Volunteer – R.S. 47:293(9)(a)(xii) provides an exclusion of $500 per tax year for individuals who volunteer for recreation departments. To qualify for this exclusion, the taxpayer must serve as a volunteer for 30 or more hours during the taxable year and must be registered as a volunteer with a recreation department operated by the state of Louisiana or a political subdivision of the state. The recreation department must certify that the taxpayer served as a volunteer and was not compensated for their services.
14E Volunteer Firefighter – R.S. 47:293(9)(a)(xii) provides an exclusion of $500 per tax year for individuals who serve as volunteer firefighters. To qualify for this exclusion, the taxpayer must complete 24 hours of continuing education and be an active member of the Louisiana State Fireman’s Association or on the departmental personnel roster for the State Fire Marshal’s Volunteer Fireman’s Insurance Program. To substantiate the exclusion, a taxpayer should retain either a membership card with the taxpayer’s name and the applicable tax year, a lifetime membership card, or a copy of the departmental personnel roster for the State Fire Marshal’s Volunteer Fireman’s Insurance Program and a certificate or other document provided to the taxpayer noting the date of the training, the topic covered, the duration of the training, and name and contact information of the person providing the training to support the continuing education requirements.
16E Voluntary Retrofit Residential Structure – R.S. 47:293(9)(a)(xiii) provides an exclusion for a taxpayer who voluntarily retrofits an existing residential structure on which the homestead exemption is claimed for ad valorem tax purposes and the structure is not rental property. The exclusion is for 50 percent of the cost paid or incurred on or after January 1, 2007, less the value of any other state, municipal, or federally sponsored financial incentives and is limited to $5,000 per retrofitted residential structure. To qualify, the voluntary retrofitting must not be a construction, reconstruction, alteration, or repair of an existing residential structure and must comply with the State Uniform Construction Code. See Revenue Information Bulletin 09-007 for more information.
17E Elementary and Secondary School Tuition – R.S. 47:297.10 provides a deduction for expenses paid for your qualified dependent’s enrollment in a nonpublic elementary or secondary school or any public elementary or secondary laboratory school operated by a public college or university. The dependent must be claimed on your 2010 return, or must have been claimed on your 2009 return. To calculate the amount of the deduction, use the 2010 Louisiana School Expense Deduction Worksheet on the back of Schedule E.
18E Educational Expenses for Home - Schooled Children – R.S.47:297.11 provides a deduction for expenses paid for home- schooling your qualified dependent. The dependent must be claimed on your 2010 return, or must have been claimed on your 2009 return. To calculate the amount of the deduction, use the 2010 Louisiana School Expense Deduction Worksheet on the back of Schedule E.
19E Educational Expenses for a Quality Public Education – R.S.47:297.12 provides a deduction for expenses paid for a quality education for your qualified dependent’s enrolled in a public elementary or secondary school. The dependent must be claimed on your 2010 return, or must have been claimed on your 2009 return. To calculate the amount of the deduction, use the 2010 Louisiana School Expense Deduction Worksheet on the back of Schedule E.
20E Capital Gain from Sale of Louisiana Business – R.S. 47:293(9) (a)(xvii) provides a deduction for net capital gains resulting from the sale or exchange of an equity interest; or from the sale or exchange of substantially all of the assets of a nonpublicly traded corporation, partnership, limited liability company, or other organization commercially domiciled in Louisiana. Attach a copy of your federal return and supporting forms and a schedule showing the calculation of the deduction. See Revenue Information Bulletin 10-017 for more information.
49E

Other – On a separate schedule, list the source and amount of other income included in Schedule E, Line 1, which Louisiana cannot tax. You must attach copies of supporting documentation in order to verify the exemption claimed on this line. Do not list income earned in another state. Residents of Louisiana are taxed on all income, regardless of where the income was earned. Credit for taxes paid to other states may be deducted on Nonrefundable Tax Credits, Schedule G, Line 1. Nonresident and Part-Year Residents should use Form IT-540B to determine their Louisiana tax. Nonresident professional athletes must use Form IT-540B-NRA.

Disabled individuals claiming an exemption under R.S. 47:59.1 for making adaptations to their home should use this line to deduct the expenses from their gross income. Persons receiving disability income (R.S. 47:44.1(B)) for a permanent, total disability may exclude up to $6,000 of annual disability income from their taxable income. Persons claiming an S Bank shareholder exclusion should use this line to report the exclusion, which is equal to the S Bank shareholder’s nontaxable income from Louisiana taxable income. “S Bank nontaxable income” means the portion of the income reported by an S Bank on Federal Form 1120S, Schedule K-1, or the portion of the income reported by an S Bank on an equivalent document, which is attributable to the net earnings used to compute the S Bank’s shares tax as provided in R.S. 47:1967.

Note: Depletion deduction is limited to the amount of federal depletion. Louisiana does not have a provision that allows excess depletion on individual income tax.

Line 4I – Add Lines 4A through 4H and print the result.

Line 4J – Print the amount of federal tax applicable to the exempt income shown on Line 4I. If Line 9 on Form IT-540, is greater than zero, complete both options and use the option that results in the lower federal tax. You may need to first compute your modified federal income tax deduction for Louisiana purposes if you have taken certain federal credits as a result of Hurricanes Katrina or Rita. See instructions for Line 9, page 19.

Option 1:

If Line 4I is: Then print on Line 4J:
Less than $15,000 -0-
$ 15,000 - $50,000 25% of the amount over $15,000
More than $50,000 $8,750, plus 40% of the amount over $50,000

Option 2: Divide Line 4I by Line 1. Carry out two decimal places in the percentage. For example, for 48.32 percent. DO NOT ROUND UP. The percentage cannot exceed 100 percent.

Multiply your total federal tax from Form IT-540, Line 9, by the ratio obtained. If there is no applicable federal tax, print zero “0.”

Line 4K – Subtract Line 4J from Line 4I and print the result.

Line 5A – Subtract Line 4K from Line 3 and print the result.

Line 5B – Print the amount of your IRC 280(C) wage expense adjustment. See Revenue Information Bulletin 06–017 for further details. To substantiate the credit, provide LDR with a copy of Federal Form 3800 that indicates the credit plus the appropriate form for the credit. A shareholder of an S corporation or other pass-through entities should attach a copy of Schedule K-1 to substantiate the credit.

Line 5C – Subtract Line 5B from Line 5A. Print the result here and on Form IT-540, Line 7. Mark the box on Form IT-540, Line 7 indicating that Schedule E was used.

General Information Regarding Tax Credits

If a schedule is required in the instructions below, you must attach a separate schedule for each credit claimed. The schedule should clearly identify the credit, your name, and Social Security Number. For complete information regarding the credits, refer to the publication, R-40058, Credits, Exemptions, Exclusions, and Deductions for Individual and Corporation Income Tax, Corporation Franchise Tax, and Inheritance and Gift Tax, on the LDR website, www.revenue.louisiana.gov/publications under tax manuals. Revenue Information Bulletins are posted on the LDR website www.revenue.louisiana.gov/policies under policy documents.

Instructions for Refundable Tax Credits, Schedule F

Line 1 – R.S. 47:297.9 allows a refundable credit for 100 percent of the amount paid by an active or reserve military servicemember, or the spouse of an active or reserve military servicemember, or the dependent of such servicemember for obtaining a Louisiana noncommercial hunting or fishing license. A copy of the noncommercial hunting and/or fishing license must be submitted to LDR in order to claim the credit. Complete all information requested in Lines 1A through 1D. The credit for the license is valid only during the time the servicemember is on active duty and does not apply to purchases of lifetime licenses. Please contact LDR for more information concerning this credit.

Additional Refundable Tax Credits Lines 2 through 6

Below is a list of additional refundable tax credits available for the tax year ending December 31, 2010. Please print the credit description, identifying code, and the dollar amount claimed in the appropriate spaces on Lines 2 through 6.

NOTE: Use only the codes referenced in the table on Schedule F. The codes listed here are not interchangeable with other codes listed in this booklet.

Line 7 – Add Lines 1D, 2 through 6 and print the result on Schedule F, Line 7 and on Form IT-540, Line 23.

CODE EXEMPTION DESCRIPTION
50F Inventory Tax – R.S. 47:6006 allows a refundable credit for 100 percent of the ad valorem taxes paid to political subdivisions in Louisiana on inventory held by manufacturers, distributors, or retailers. Refer to Revenue Information Bulletin 06-036 on the LDR website.
51F Ad Valorem Natural Gas – R.S. 47:6006 allows a refundable credit for 100 percent of the ad valorem taxes paid to political subdivisions in Louisiana on natural gas held, used, or consumed in providing natural gas storage services or operating natural gas storage facilities. Both a copy of the tax assessment and a copy of the cancelled check in payment of the tax must be attached to the return.
52F Ad Valorem Offshore Vessels –R.S.47:6006.1 allows a refundable credit for 100 percent of the ad valorem taxes paid on vessels in Outer Continental Shelf Lands Act Waters. You must attach to the return a copy of the inventory tax assessment, a copy of the cancelled check in payment of the tax, and a copy of a completed Form LAT 11A from the Louisiana Tax Commission.
54F Telephone Company Property – R.S.47:6014 allows a refundable credit for up to 40 percent of the ad valorem taxes paid to Louisiana political subdivisions by a telephone company with respect to that company’s public service properties located in Louisiana. The credit may be passed through to individuals who are shareholders or members of certain legal entities. See Revenue Information Bulletin 01-004, on LDR’s website. A schedule must be attached stating which entity paid the tax and obtained the credit on the individual’s behalf.
55F Prison Industry Enhancement – R.S.47:6018 allows a refundable credit for the state sales and use tax paid by a taxpayer on purchases of specialty apparel items from a private sector Prison Industry Enhancement (PIE) contractor. Contact LDR for further information regarding this credit.
56F Urban Revitalization – R.S. 51:1801 et seq. allows a refundable credit for investing in certain economically depressed areas of the state. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.
57F Mentor-Protégé – R.S. 47:6027 allows a refundable credit for a mentor business that fulfills the terms of a Mentor-Protégé Agreement as approved by the Louisiana Department of Economic Development. A copy of the certification of the credit must be attached to the return.
58F Milk Producers – R.S. 47:6032 allows a refundable credit for a resident taxpayer engaged in the business of producing milk for sale. Those milk producers that have obtained permits under the Louisiana Administrative Code, Title 51, and have met the requirements of the Food and Drug Administration, shall be certified by the Louisiana Department of Health and Hospitals to receive the credit. Revenue Information Bulletin 08-014 provides information regarding the credit and the due date of an income tax return.
59F Technology Commercialization – R.S.51:2351 et seq. allows a refundable credit for a qualifying individual or business that invests in the commercialization of Louisiana technology. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.
60F Historic Residential – R.S. 47:297.6 allows a refundable credit for the amount of eligible costs and expenses incurred during the rehabilitation of an owner-occupied residential or owner- occupied mixed use structure located in a National Register Historic District, a cultural products district, a local historic district, a Main Street District, or a downtown development district. The tax credit is limited to one credit per rehabilitated structure and can not exceed $25,000 per structure. Taxpayers must apply to the Louisiana Department of Culture, Recreation and Tourism, Division of Historic Preservation for certification. A copy of the certification of the credit must be attached to the return.
61F

Angel Investor – R.S. 47:6020 et seq. allows a refundable credit for taxpayers who make third party investments in certified Louisiana entrepreneurial businesses between January 1, 2005 and December 31, 2009. To earn the Angel Investor Credit, taxpayers must file an application with the Louisiana Department of Economic Development. Refer to Revenue Information Bulletin 06-020 on LDR’s website.

62F Musical and Theatrical Productions – R.S. 47:6034 allows a refundable credit for the production expenses, transportation costs, employment of college and vocational-technical students, employment of residents, and for the construction, repair, or renovation of facilities related to the live performance industry. No credit shall be allowed under this provision if credit has been granted for the Motion Picture Investment credit (R.S. 47:6007) or the Sound Recording Investment credit (R.S. 47:6023). Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.
64F Wind and Solar Energy Systems – R.S.47:6030 allows a refundable credit for taxpayers who purchase and install a wind energy system, a solar energy system, or both in a residence located in this state, or for owners who purchase and install such energy systems in a residential rental apartment project. Taxpayers are also eligible for the credit when a resident purchases a newly constructed home with such systems already installed, or when such systems are installed in new apartment projects. The credit is equal to 50 percent of the first $25,000 of the cost of each wind energy system or solar energy system, including installation costs, purchased on or after January 1, 2008. Only one tax credit is available for each eligible system. When taking this credit, the taxpayer will not be eligible for any other state tax credit, exemption, exclusion, deduction, or any other tax benefit for that property. Refer to Louisiana Administrative Code 61:I.1907 on LDR’s website.
65F School Readiness Child Care Provider – R.S. 47:6105 allows a refundable credit for a child care provider who operates a facility or facilities where care is given to foster children in the custody of the Louisiana Department of Children and Family Services (DCFS) or to children who participate in the Child Care Assistance Program administered by the Office of Family Support in DCFS. The credit is based on the average monthly number of children who attended the facility multiplied by an amount based on the quality rating of the child care facility. For more information regarding this credit, contact DCFS.
66F School Readiness Child Care Directors and Staff – R.S. 47:6106 allows a refundable credit for eligible child care directors and eligible child care staff. The tax credit is based on certain attained qualifications for directors and staff members. For more information regarding this credit, contact the Louisiana Department of Children and Family Services.
67F School Readiness Business-Supported Child Care – R.S. 47:6107 allows a refundable credit for a taxpayer who incurs eligible business-supported child care expenses. The percentage of eligible expenses allowed for the credit depends on the quality rating of the child care facility to which the expenses are related or the quality rating of the child care facility that the child attends. Copies of cancelled checks and other documentation to support the amount of eligible expenses must be maintained and provided upon request. For more information regarding this credit, contact the Louisiana Department of Children and Family Services.
68F School Readiness Fees and Grants to Resource and Referral Agencies – R.S. 47:6107 allows a refundable credit for a taxpayer whose business pays fees and grants to child care resource and referral agencies. The credit can not exceed $5,000 per tax year. For more information regarding this credit, contact the Louisiana Department of Children and Family Services.
69F Sugarcane Trailer Conversion or Acquisition – R.S. 47:6029 allows a refundable credit for the cost paid this year to acquire or replace an eligible sugarcane trailer, or to convert an ineligible sugarcane trailer to an eligible sugarcane trailer. An eligible trailer hauls sugarcane and meets certain requirements which will authorize the owner or operator to obtain an annual special permit for sugarcane vehicles after August 1, 2012. The credit is limited to $8,000 per trailer.
70F Retention and Modernization – R.S. 51:2399.1 et seq. allows a refundable credit for an employer who incurs qualified expenditures to modernize existing operations in Louisiana to retain the business in the state. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.
71F Conversion of Vehicle to Alternative Fuel – R.S. 47:6035 allows a refundable credit for the conversion of a vehicle to a qualified clean-burning motor vehicle fuel property, or the purchase of a new qualified motor vehicle with a qualified clean-burning fuel property installed by the manufacturer. The purchased vehicle must be properly registered with the Louisiana Department of Public Safety. You must attach documentation verifying the conversion or purchase of the vehicle.
72F Research and Development – R.S. 47:6015 allows a refundable credit for any taxpayer who claims a federal income tax credit under 26 U.S.C. §41(a) for increasing research activities. The credit is obtained through the Louisiana Department of Economic Development and documentation from that agency must be attached to the return. See Revenue Information Bulletin 09-020 on LDR’s website.
80F Other Refundable Credit – Reserved for future credits.

General Information about Disaster Relief Credits

Federal Disaster Relief Credits

Louisiana provides a deduction for federal income taxes paid on Louisiana income. Generally, when the federal income tax liability is decreased by federal credits, the amount of the Louisiana income tax liability increases.

R.S. 47:293(4)(b) expands the relief granted to Louisiana taxpayers who claimed certain disaster credits granted for Hurricane Katrina or Hurricane Rita. To avoid paying additional income tax, Louisiana taxpayers who received these federal credits may increase the amount of their Louisiana federal income tax deduction by the amount of certain disaster relief credits claimed on the 2010 federal income tax form. Louisiana Administrative Code (LAC) 61:I.601 designated the following federal credits as disaster relief credits:

  1. Employee Retention Credit
  2. Work Opportunity Credit
  3. Rehabilitation Tax Credit
  4. Employer-Provided Housing Credit
  5. Low Income Housing Credit
  6. New Markets Tax Credit

For complete information about disaster relief credits, see LAC 61:I.601 on the LDR website, www.revenue.louisiana.gov/policies.

Consult your tax advisor or the IRS for information concerning the federal credits. If you claimed federal disaster relief credits on your federal return, complete Schedule H and attach a copy of the appropriate federal forms to your return to substantiate your modified Louisiana federal income tax deduction.

Instructions for Schedule H

Line 1 – Print the amount of your federal income tax liability from Federal Form 1040, Line 55.

Line 2 – Print the amount of federal disaster relief credits claimed on your federal return. The federal disaster relief credits claimed for this year and allowed by the IRS could be credits that are carried forward from previous years. Attach a copy of your federal return that indicates the amount of the credit, a copy of Form 3800, and a copy of the appropriate IRS form in order to substantiate the amount of the credit.

Line 3 – Add the amounts from Lines 1 and 2 and print the result on Line 3 and on Form IT-540, Line 9. Mark the box on Line 9 to indicate that your income tax deduction has been increased by the amount of federal disaster credits.

Instructions for Nonrefundable Tax Credits, Schedule G

Line 1 – If you are a resident of Louisiana, you are allowed a credit for income taxes paid to other states for income reported on your Louisiana return (R.S.47:33). Note that you may not claim the tax withheld, you must file a return with the other state and claim the tax actually paid. You may not claim credit for taxes paid to cities or foreign countries. See Revenue Ruling 02-013 for information on taxes paid to the District of Columbia. The credit allowed on your Louisiana return must be for the same taxable year for which the tax was paid to the other states. On Line 1, enter the amount of the income tax paid to the other states. Round to the nearest dollar. A copy of the returns filed with the other states must be attached to your Louisiana return.

Line 2 – A credit of $100 is allowed for the taxpayer, spouse, or dependent who is deaf, has lost the use of a limb, is mentally incapacitated, or is blind (R.S. 47:297(A)). Only one credit is allowed per person. The disability must exist at the end of the taxable year, or if death occurred during the taxable year, at the date of death. If you are claiming this credit for the first time, a physician’s statement is required certifying the disability. For purposes of this credit:

  • DEAF is defined as one who cannot understand speech through auditory means alone (even with the use of amplified sound) and must either use visual means or rely on other means of communication.
  • LOSS OF LIMB is defined as one who has lost one or both hands, at or above the wrist, or one or both feet, at or above the ankle. This credit also applies if use of the limb or limbs has been lost permanently.
  • MENTALLY INCAPACITATED is defined as one who is incapable of caring for himself, or of performing routine daily health requirements, due to a person’s condition.
  • BLIND is defined as one who is totally blind or whose central field of acuity does not exceed 20/200 in the better eye with correcting lenses or whose visual acuity is limited to a field no greater than 20 degrees. The names of the qualifying dependents must be entered on Line 2C. On Line 2D, print the total number of qualifying individuals. Multiply Line 2D by $100 and print the result on Line 2E.

Line 3 – Taxpayers who donate computer or other technological equipment to educational institutions in Louisiana are allowed a credit of 40 percent of the value of the property donated (R.S. 47:37). The recipient certifies the donation of property by using Form R-3400 the Certificate of Donation available on LDR’s website. You must attach the completed certification form to your return. On Line 3A, enter the value of the property donated to an educational institution in Louisiana. Multiply the amount on Line 3A by 40 percent and print the result on Line 3B. Round to the nearest dollar.

Line 4 – Taxpayers are allowed a credit of 10 percent of the following federal credits: a credit for the elderly computed on Federal Schedule R; a foreign tax credit found on, Federal Form 1040, Line 47; a residential energy credit found on Federal Form 1040, Line 52; plus 10 percent of any investment tax credit or jobs credit computed on Federal Form 3800 (R.S. 47:297(B)). If the credit was not used on the federal return because of the alternative minimum tax, you must reduce this amount by the portion of the credit that was not used. Print the total federal credit on Line 4A. Multiply Line 4A by 10 percent and print the result or $25, whichever is less on Line 4B.

Additional Nonrefundable Credits Lines 5 Through 10

Below is a list of additional nonrefundable tax credits available for the tax year ending December 31, 2010. Print the credit description, identifying code, and the dollar amount claimed in the appropriate spaces on Lines 5 through 10.

NOTE: Use only the codes referenced in the table on Schedule G. The codes listed here are not interchangeable with other codes listed in this booklet.

Line 11 – Add Lines 1, 2E, 3B, 4B, and 5 through 10. Print the result on Schedule G, Line 11 and on Form IT–540, Line 14.

CODE EXEMPTION DESCRIPTION
100

Premium Tax – R.S. 47:227 provides a credit for premium taxes paid during the preceding 12 months by an insurance company authorized to do business in Louisiana. The credit may be passed to individuals through certain legal entities such as partnerships. A schedule must be attached listing the entities that paid the premium tax and generated the credit on behalf of the individual.

105 Commercial Fishing – R.S. 47:297(C) provides a credit for gasoline and special fuels taxes paid for operating or propelling any commercial fishing boat. Attach a schedule listing all invoices and taxes paid. Do not claim the credit if you have already received a fuel tax refund.
110 Family Responsibility – R.S. 47:297(F) provides a credit for the amount contributed in a family responsibility program under the provisions of R.S. 46:449. The amount of this credit is equal to 33.3 percent of the contribution not to exceed $200.
115 Small Town Doctor/Dentist – R.S. 47:297(H) provides a credit for certified medical doctors and dentists licensed to practice in certain areas of Louisiana. The credit is limited to $5,000.
120 Bone Marrow – R.S. 47:297(I) provides a credit to employers authorized to do business in the state who incur bone marrow donor expense by developing a bone marrow donation program, educating employees related to bone marrow donations, making payments to a health care provider for determining tissue types of potential donors, and paying wages to an employee for time related to tissue typing and bone marrow donation. If the wage expense is used to obtain the credit, it cannot be deducted as an expense for income tax purposes. The amount of the credit is equal to 25 percent of the bone marrow donor expense paid or incurred by the employer during the tax year.
125 Law Enforcement Education – R.S. 47:297(J) provides a credit for certain law enforcement officers and specified employees of the Louisiana Departments of Public Safety or Corrections for specific post-secondary educational expenses incurred in the pursuit of an undergraduate degree related to law enforcement.
130 First Time Drug Offenders – R.S. 47:297(K) provides a credit for a taxpayer who provides full-time employment to an individual who has been convicted of a first time drug offense, and who is less than 25 years of age at the time of initial employment.
135 Bulletproof Vest – R.S. 47:297(L) provides a credit for the purchase of a bulletproof vest for certain law enforcement personnel. The credit is limited to $100.
140 Nonviolent Offenders – R.S. 47:297(O) provides a credit for a taxpayer who provides full-time employment to an individual who has been convicted of a first-time nonviolent offense, has completed a court-ordered program certified by the employee’s probation officer, and has worked 180 days. A statement signed by both the employer and employee certifying the employ ee’s full-time work status for the year must be attached to the return.
150 Qualified Playgrounds – R.S. 47:6008 provides a credit for donations to assist qualified playgrounds. The credit is for the lesser of $1,000 or one-half of the value of the cash, equipment, goods, or services donated. For more information on this credit, see Revenue Ruling No. 02-020 posted on LDR’s website.
155 Debt Issuance – R.S. 47:6017 provides a credit for the filing fee paid to the Louisiana State Bond Commission, which is incurred by an economic development corporation in the preparation and issuance of bonds.
175 Donations of Materials, Equipment, Advisors, Instructors R.S. 47:6012 provides a credit for employers within the state for donations of the newest technology available in materials, equipment, or instructors to public training providers, secondary and postsecondary vocational-technical schools, community colleges, or apprenticeship programs registered with the Louisiana Workforce Commission to assist in the development of training programs designed to meet industry needs. The credit is for 50 percent of the value of the donated materials, equipment, or services rendered by the instructor. When taken with other applicable credits, this credit cannot exceed 20 percent of the employer’s tax liability for any taxable year.
199 Other – Reserved for future credits.
200 Atchafalaya Trace – R.S. 25:1226.4 provides a credit to certain heritage-based cottage industries that have entered into a contract with the State Board of Commerce and Industry. A copy of the contract must be attached to the return.
202 Organ Donation – R.S. 47:297(N) provides a credit to offset certain expenses incurred by an individual or spouse for a living organ donation.
204 Household Expense for Physically and Mentally Incapable Persons – R.S. 47:297.2 provides a credit for a person who maintains a household that includes one or more dependents who are physically or mentally incapable of caring for themselves. The credit is for the applicable percentage of employment related expenses allowable pursuant to Section 21 of the Internal Revenue Code.
208 Previously Unemployed – R.S. 47:6004 provides a credit for hiring a previously unemployed person who participates in the Family Independence Work Program in a newly created full-time job.
210 Recycling Credit – R.S. 47:6005 provides a credit for the purchase of certain equipment or service contracts related to recycling. The credit must be certified by the Louisiana Department of Environmental Quality and a copy of the certification must be attached to the return.
212 Basic Skills Training – R.S. 47:6009 provides a credit for employers who pay for training to bring employees’ reading, writing, or mathematical skills to at least the 12th grade level. The credit is limited to $250 per participating employee, not to exceed $30,000 for the tax year.
220 Dedicated Research – R.S. 51:2203 provides a credit of 35 percent of a cash donation of $200,000 or more to the Dedicated Research Investment Fund, which is administered by the Louisiana Board of Regents. The Board of Regents must certify that the person is qualified for the credit, and a copy of the certification must be attached to the return.
224 New Jobs Credit – R.S. 47:34 and R.S. 47:287.749 provide a credit to employers who establish or expand a business in the state. A schedule that includes the calculation of the credit must be attached to the return and must include the name, address, and Social Security Number of each new employee; highest number of full-time and qualified part-time employees during the previous year; highest number of full-time and part-time employees during the current year; number of new employees hired for new jobs created during this taxable year; and amount of credit carried forward from the previous year.
226 Refund by Utilities – R.S. 47:287.664 provides a credit for certain court ordered refunds made by utilities to its customers.
228 Eligible Re-entrants – R.S. 47:287.748 provides a credit to a taxpayer who employs an eligible re-entrant in Louisiana. An eligible re-entrant is defined as a person who has been convicted of a felony and who has successfully completed the Intensive Incarceration Program, as provided in R.S. 15:574.4.
230 Neighborhood Assistance – R.S. 47:35 and R.S. 47:287.753 provide a credit for an entity engaged in the activities of providing neighborhood assistance, job training, education for individuals, community services, or crime prevention in Louisiana. The credit is for up to 70 percent of the amount contributed for investment in programs approved by the Commissioner of Administration and the credit shall not exceed $250,000 annually.
232 Cane River Heritage – R.S. 47:6026 provides a credit for a heritage-based cottage industry located or to be located in the Cane River Heritage Area Development Zone. The taxpayer must enter into a contract with the Louisiana Department of Culture, Recreation, and Tourism, and a copy of the contract must be attached to the return.
234 LA Community Economic Development – R.S. 47:6031 provides a credit for money donated, contributed, or represented by a sale below cost by the taxpayer to a certified community development corporation or a certified community development financial institution. The credit must be certified by the Louisiana Department of Economic Development, and a copy of the certification must be attached to the return.
236 Apprenticeship – R.S. 47:6033 provides a credit to employers for one dollar for each hour of employment of an eligible apprentice, limited to 1,000 hours for each eligible apprentice. An eligible apprentice is a person who has entered into a written apprentice agreement with an employer or an association of employers pursuant to a registered apprenticeship program or who is enrolled in a training program accredited by the National Center for Construction Education and Research. For more information regarding this credit, contact the Louisiana Workforce Commission.
238 Ports of Louisiana Investor – R.S. 47:6036(C) provides a credit to individuals to encourage investment in state port facilities in Louisiana. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.
240

Ports of Louisiana Import Export Cargo – R.S. 47:6036(I) provides a credit to individuals to encourage the use of state port facilities in Louisiana. The credit is based on the number of tons of qualified cargo imported and exported from or to manufacturing, fabrication, assembly, distribution, processing or warehousing facilities located in the state. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.

251

Motion Picture Investment – R.S. 47:6007(C)(1) provides a credit for an individual taxpayer residing in Louisiana who invests in a state-certified, motion picture production. Taxpayers taking this credit may attach Form R-10611, available on LDR’s website, as documentation for this credit.

252 Research and Development – R.S. 47:6015 provides a credit for any taxpayer who claims a federal income tax credit under 26 U.S.C. §41(a) for increasing research activities. Use this code for Research and Development credits earned for expenditures made in tax years beginning before January 1, 2009. See Revenue Information Bulletin 09-020 on LDR’s website.
253 Historic Structures – R.S. 47:6019 provides a credit if the taxpayer incurs certain expenses during the rehabilitation of a historic structure that is located in a Downtown Development District or cultural product district. Refer to Revenue Information Bulletin 06-002 on LDR’s website.
254 Digital Interactive Media – R.S. 47:6022 provides a credit to individuals for the investment in businesses specializing in digital interactive media. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return.
256

Motion Picture Employment of Resident – R.S. 47:1125.1 provides a credit for the employment of residents of Louisiana in connection with the production of a motion picture. The credit may flow to an individual via a partnership, limited liability company, Subchapter S Corporation, or other entities. Refer to Revenue Information Bulletin 05-005 on LDR’s website.

257

Capital Company – R.S. 51:1924 provides a credit for any person who invests in a certified Louisiana Capital Company. This credit must be approved by the Commissioner of the Louisiana Office of Financial Institutions. A copy of your certification must be attached to the return.

258 LA Community Development Financial Institution (LCDfi) – R.S. 51:3085 et seq. provides a credit for certain investments in an LCDfito encourage the expansion of businesses in economically distressed areas. The Louisiana Office of Financial Institutions administers this program.
259 New Markets – R.S. 47:6016 provides a credit if the taxpayer makes certain qualified low-income community investments, as defined in Section 45D of the Internal Revenue Code. The taxpayer must be certified by the Louisiana Department of Economic Development and approved by LDR. Information on the program investment limits are frequently posted as Revenue Information Bulletins on LDR’s website.
260 Brownfields Investor Credit – R.S. 47:6021 provides a credit to individuals to encourage the cleanup, redevelopment, and productive reuse of brownfields sites in the state. The credit is obtained through the Louisiana Department of Economic Development and the Louisiana Department of Environmental Quality.
261 Motion Picture Infrastructure – R.S. 47:6007(C)(2) provides a credit for an approved state-certified infrastructure project for a film, video, television, or digital production or postproduction facility. Taxpayers must apply to the Louisiana Department of Economic Development to receive certification. A copy of the certification of the credit must be attached to the return. Refer to Revenue Information Bulletin 06-004 on LDR’s website.
299 Other – Reserved for future credits.
300 Biomed/University Research – R.S. 17:3389 provides a credit to persons who establish research activities either in a Biomedical or a University Research and Development Park. The taxpayer must enter into a contract with the Louisiana Department of Economic Development and a copy of the contract showing the credit granted must be attached to the return.
305 Tax Equalization – R.S. 47:3201 et seq. provides a credit for tax equalization for certain businesses locating in Louisiana. The taxpayer must enter into a contract with the Louisiana Department of Economic Development and a copy of the contract showing the credit granted must be attached to the return.
310 Manufacturing Establishments – R.S. 47:4301 et seq. provides a credit to certain manufacturing establishments that have entered into a contract with the Louisiana Department of Economic Development. A copy of the contract showing the credit granted must be attached to the return.
315

Enterprise Zone – R.S. 51:1781 et seq. provides a credit for private sector investments in certain areas that are designated as “Enterprise Zones.” The taxpayer must enter into a contract with the Louisiana Department of Economic Development and a copy of the contract showing the credit granted must be attached to the return.

399 Other – Reserved for future credits.

2010 Louisiana Child Care Credit Instructions

R.S. 47:297.4 allows a state tax credit for child and dependent care expenses allowed by Internal Revenue Code Section 21. The credit is refundable for taxpayers whose Federal Adjusted Gross Income is $25,000 or less and is nonrefundable for taxpayers whose Federal Adjusted Gross Income is more than $25,000.

INCOME EQUAL TO OR LESS THAN $25,000

Taxpayers whose Federal Adjusted Gross Income is $25,000 or less are allowed a refundable credit whether or not a federal child care credit has been claimed. In order to claim the Louisiana Refundable Child Care Credit, the taxpayer must comply with the same law and rules of Internal Revenue Code Section 21 that governs the federal child care credit for the 2010 taxable year. Use Lines 1 through 11 of the Louisiana Refundable Child Care Credit Worksheet on page 31 to compute your refundable credit. See instructions for the worksheet below.

INCOME GREATER THAN $25,000

Taxpayers whose Federal Adjusted Gross Income is greater than $25,000, are allowed a credit against their Louisiana income tax liability for a certain percentage of their federal child care credit. If you are unable to claim the credit in the year in which it is earned, the unused portion of the credit can be used over the next four years. Use Lines 1 through 18 of the 2010 Louisiana Nonrefundable Child Care Credit Worksheet on page 29 to compute your 2010 nonrefundable credit, and to appropriately claim any carry forward you may have from previous years.

REFUNDABLE CHILD CARE CREDIT INSTRUCTIONS

  1. Your Federal Adjusted Gross Income must be $25,000 or less to claim a Louisiana refundable child care credit. If you did not file and claim a federal child care credit, you may still file for, and receive, a refundable Louisiana Child Care Credit, if you meet certain criteria. In order to qualify for the Louisiana credit, you must meet the same tests for earned income, qualifying dependents, and qualifying expenses as required by the IRS for the federal child care credit.
  2. In order to claim your Louisiana Child Care Credit, you must meet the following requirements:
    1. Your filing status must be single, head of household, qualifying widow(er) or married filing jointly. See Line 3 below for information on married filing separately.
    2. The care was provided to your dependent child to allow you, and your spouse if married filing jointly, to work or look for work. If you did not find a job and have no earned income for the year, you cannot claim the credit.
    3. The qualifying child must be under age 13.
    4. The person who provided the care cannot be your spouse, the parent of the qualifying child under age 13, or a person whom you can claim as a dependent. If your child provided the care, he can not be your dependent and must be age 19 or older by the end of 2010.
  3. If your filing status is married filing separately, you will be considered single for purposes of calculating the credit if all of the following apply:
    1. You lived apart from your spouse during the last 6 months of 2010.
    2. Your qualifying dependent child lived in your home for more than half of 2010.
    3. You provided over half the cost of keeping up your home.

If you meet all these requirements and meet the requirements of 2(B), 2(C), and 2(D), you are eligible for the credit.

DEFINITIONS

Qualifying Child – A child under age 13 who can be claimed as a dependent by the taxpayer. If the child turned 13 during the year, the child qualifies for the part of the year he was under age 13.

Qualified Expenses – Amounts paid for household services and care of the qualifying person while the taxpayer worked or looked for work. Child support payments are not qualified expenses. Also, expenses reimbursed by a state social service agency are not qualified expenses unless the reimbursement was included in the taxpayer’s income. Prepaid expenses are treated as paid in the year the care was provided. Do not include the following as qualified expenses for 2010:

A. Expenses incurred in 2010 but not paid until 2011.

B. Expenses incurred in 2009 but did not pay until 2010.

C.Expenses prepaid in 2010 for care to be provided in 2011.

Dependent Care Benefits – These include amounts your employer paid directly to either you or your care provider for the care of your qualifying child while you worked. Your salary may have been reduced to pay for these benefits. If you received dependent care benefits, they should be shown on your 2010 Forms W-2 in box 10.

Earned Income – Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self employment. A net loss from self employment reduces earned income. Earned income also includes strike benefits, any disability pay you report as wages, and other taxable compensation. You can elect to include nontaxable combat pay in earned income. Earned income does not include: pensions and annuities, social security payments, workers’ compensation, interest, dividends, or unemployment compensation, scholarship or fellowship grants, nontaxable workfare payment, or any amount received for work while an inmate in a penal institution.

For additional definitions, details, and information, see the Internal Revenue Service’s Publication 503.