August 13, 2015
2015 Louisiana Legislative Changes for Individual Returns
Update as of 8/12/2015
The 2015 Louisiana Legislative Session enacted new laws affecting the filing of 2014 income tax returns and years going forward. Many of these new laws are effective July 1, 2015 for 2014 covered by a valid extension of time to file. This will address individual provisions affected by the new legislation. A future alert will address the business provisions and tax credit issues.
LDR's website is the best resource for practitioners to find information on these new laws and the forms and guidance which has been released to assist in filing taxpayers’ returns.
LDR is continually updating information relating to the changes enacted in the 2015 Legislative Session and these will appear on the Department's website as released. This applies to guidance such as Revenue Information Bulletins and changes to the forms that are to be filed.
The following is a list of resources available to assist practitioners:
To enable compliance with the Individual provisions under the new laws, specifically, Acts 109, 125, and 133, LDR issued worksheets to facilitate calculations required.
- R540CRW Refundable Credits Reduction Worksheet for use when filing Forms IT-540, IT-540B or IT-540B-NRA
- R540CNR Nonrefundable Credits Reduction Worksheet for use when filing Forms IT-540, IT-540B or IT-540B-NRA
- R-540-G1 Credit for Taxes paid to other states worksheetfor use when filing Form IT-540 and IT-541
LDR has indicated the figures from the worksheets reflecting the reduced amount of allowed credits should be placed in the appropriate line of the return, and the worksheet with any documentation should be included as a pdf attachment in the e-filing process.
The following are not limited on 2014 returns by the new legislation:
- Child care credit – Line 12B
- School readiness credit – Line 12D
- School readiness credit – Line 20
This worksheet has been created to reflect the reduction in certain income tax credits according to Act 125 and Act 133 of the 2015 Regular Session of the Louisiana Legislature. The reductions are applicable when claimed on any return filed on or after July 1, 2015, but before June 30, 2018 regardless of the taxable year the return relates. Please refer to Revenue Information Bulletin 015-021 for information regarding amended returns and 2014 returns filed which are covered by a valid extension of time to file. This worksheet should be used in completing your individual income tax return. Round all amounts to the nearest dollar.
All references to Schedule F also include Schedule F-NR for those filing IT-540-B and Schedule F-NRA for those filing IT-540BNRA unless otherwise stated.
Please note Part II only applies if the ad valorem taxes paid on inventory or natural gas inventory tax is $10,000 or more.
This worksheet has been created to reflect the reduction in certain income tax credits according to Act 125 of the 2015 Regular Session of the Louisiana Legislature. The reductions are applicable when claimed on any return filed on or after July 1, 2015, but before June 30, 2018 regardless of the taxable year the return relates. Please refer to Revenue Information Bulletin 015-021 for information regarding amended returns and 2014 returns filed on extension. This worksheet should be used in completing your individual income tax return. Round all amounts to the nearest dollar.
All references to Schedule G also include Schedule G-NR for those filing IT-540-B and Schedule G-NRA for those filing IT-540BNRA unless otherwise stated.
This worksheet has been created to reflect the restrictions for the credit for taxes paid to other states according to Act 109 of the 2015 Regular Session of the Louisiana Legislature. The restrictions are applicable when the credit is claimed on any return filed on or after July 1, 2015 regardless of the taxable year to which the return relates. Please refer to Revenue Information Bulletin 015-018 for information regarding amended returns and returns on extension.
Pursuant to Revised Statute 47:33 a credit for taxes paid to other states shall be allowed ONLY if the other state provides a similar credit for Louisiana income taxes paid on income derived from property located in, or from services rendered in, or from business transacted in Louisiana and the other state does not allow a nonresident a credit against the income taxes imposed by that state for taxes paid or payable to the state of residence. The credit is limited to the amount of Louisiana income tax calculated on the income earned in other states.
Most software vendors are aware of these changes and are in the process of revising their software. Each practitioner should consult their vendor to determine if any updates are available, and when updates to reflect the changes will be available.
Some software packages allow manual override of figures on Louisiana returns and some do not allow manual override.
The Education Credit on line of Form IT-540 and the Federal credits on Schedule G Lines 4a and 4b are two examples where some vendors do not allow a manual override.
Act 128 revised RS 47:1602 on penalty calculations for returns filed after July 1, 2015. Practitioners should be familiar with these changes before filing returns with balances due. Particular attention should be paid to the repeal of the 90 percent safe harbor that was in the previous version of the statute.
Other Penalty Issues
The limit on state credits that can be claimed and revision to RS 47:1602 could present challenges to some returns and result in penalty assessment. There has been no formal procedure introduced to deal with these circumstances. LDR is aware of this and has indicated it will be addressed.
These changes should affect most extended 2014 returns and returns going forward. It is imperative for practitioners to be familiar with them to effectively service client needs and facilitate processing with LDR. In addition, continual monitoring of LDR's website is necessary to be up to date on future guidance and forms on the new legislation.
LCPA thanks Jerry Schreiber for providing the content for this Tax Alert.
Tax Relief to Individuals and Businesses Affected by North Louisiana
The Louisiana Department of Revenue is granting filing and payment extensions to taxpayers whose homes, principal place of business or critical tax records are located in any of the "disaster areas” declared by the Federal Emergency Management Agency (FEMA) as a result of the recent severe storms and flooding in North Louisiana. The declared "disaster areas” include the following parishes: Bossier, Caddo, Grant, Natchitoches, and Red River.
The Department will waive any late filing penalties, late payment penalties and interest that would otherwise apply. Any return or amount on which penalty or interest began accruing before May 18, 2015 will not be eligible for this relief.
Affected taxpayers whose home, principal place of business or critical tax records are located in one of the declared "disaster areas” should write "North La. Flooding” in BLACK ink on the top of their returns.
The text above is an excerpt of RIB 15-031. Click here to read the full text of this Revenue Information Bulletin.
Questions about the content of this Alert or about our legislative outreach can be directed to Linda Babin.