Withholding Taxes: Louisiana

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Louisiana residents are subject to state income tax withholding. Residents who perform services in another state are only taxed in Louisiana if the wages paid are not subject to income tax withholding in the other state. Nonresidents are subject to Louisiana income tax withholding for services performed in Louisiana, unless a short-term service exemption applies. See Withholding on Residents, Nonresidents and Expatriates.
• Employees who are subject to Louisiana income tax withholding must file Form L-4, Louisiana Employee Withholding Exemption Certificate, on or before the first day of work. Federal Form W-4 is not an acceptable substitute. To claim exemption from withholding, an employee must complete Form L-4E, Exemption from Withholding Louisiana Income Tax. See Employee Withholding Forms.
• Louisiana employers must use the aggregate method to determine the amount of taxes to withhold from supplemental wage payments (e.g., bonuses). See Supplemental Wages.
• Employers must provide to each current and terminated employee the state copy of federal Form W-2, Wage and Tax Statement, by a certain date. Employers of 20 or more full-time or part-time employees must give a written notice to employees of their eligibility to claim the earned income tax credit when they are hired. The notice must also be posted with other notices that required to be posted by state or federal law. See Form W-2 Requirements; Earned Income Tax Credit Notices.
• For income tax withholding purposes, employers must keep records that would assist the revenue department during an audit. See Recordkeeping Requirements.