Pension

Question

I can start receiving my pension from my ex since I’m now 66 and he is 68.

If I take it as a lump sum, will I have to pay taxes in Louisiana? Are there any options available for financial hardships? Is it better to wait, or can I access it now without facing penalties? I’ve heard changes are coming next year, so I’m uncertain whether to take it now or hold off until then. What do you recommend? Thanks!

Pebbles

AlexO · Accepted Answer

Pebbles,

That is a great question!

If you are a resident of LA, you will generally pay taxes to LA on that retirement income. LA does allow certain exclusions for retirement income. All persons 65 and older pay exclude up to $6,000 of retirement income. There are additional exclusions for retirement benefits from certain retirement systems.

For more information, see below:

https://www.revenue.louisiana.gov/faq/Details/1216

If you are unable to pay the full amount of taxes due by the due date of the return, you can request a payment plan from LA:

https://revenue.louisiana.gov/Faq/Details/1285

I am unable to speak about any potential changes, but tax-law changes can certainly impact when you want to receive retirement income.

JohnW · Accepted Answer

There may be state taxes on the $1,500 or a part of it.   My recommendation would be, when it comes available, would be to go through the state section of our software and the appropriate forms will be prepared and the tax calculated.