Lawmakers want most COVID-19 benefits exempt from Louisiana income taxes

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(The Center Square) – Louisiana lawmakers have voted to exclude any COVID-19 relief from state income taxes outside of unemployment benefits.

Senate Bill 11 by River Ridge Republican Sen. Kirk Talbot applies to individuals and businesses.

The bill defines “COVID-19 relief benefit” as “any gratuitous grant, loan, rebate, tax credit, advance refund, or other qualified disaster relief benefit directly or indirectly provided to a taxpayer by the state or federal government,” and includes any potential relief legislation yet to be passed.

The bill names several examples, such as the state’s Main Street Recovery Program and Critical Infrastructure Worker’s Hazard Pay Rebate, but makes clear that it’s not necessarily an exhaustive list. Only unemployment benefits, which the federal government has enhanced during the pandemic, are excluded.

Since the bill is forward-looking and retroactive, taxpayers who already paid their state taxes may need to file an amended return to take advantage. Louisiana Department of Revenue Secretary Kimberly Robinson suggested lawmakers advise their constituents to be patient.

“I’m sure they’ll be happy to amend, but this is going to take a little while,” she said.

SB 11 passed unanimously at every step of the legislative process, including in the House on Thursday.

The House also approved Senate Bill 36, which calls for eliminating time limits for a business to carry forward operating loss deductions. The bill is awaiting potential Senate concurrence with the House’s amendments.

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