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WSO
Level 3

Louisiana Non-resident Tax Rules for interest & dividends exempt from Federal Tax

I would appreciate validation that the instructions for Line 13 of the Louisiana non-resident/part time resident worksheet do NOT require me ( a non-LA resident who never even visited Louisiana) to include as income federally tax exempt interest/dividends earned in other states as part of my Louisiana income.     

 

The Louisiana worksheet instructions for line 13 are "Interest income and dividends not reported on your federal return are taxable to Louisiana, if ALL of the following conditions are met: a) the interest and dividends were earned while you were domiciled in Louisiana; b) the interest and dividends were received from obligations of a state or political subdivision of a state other than Louisiana; and c) the obligations were purchased on or after January 1, 1980. Obligations of the State of Louisiana, its political subdivisions, or public corporations created by them and their constituted authorities are exempt from Louisiana taxes. If you have nontaxable interest or dividend income on Federal Form 1040A, Lines 8b or 9b, or Federal Form 1040, Lines 8b or 9b, add the amounts together and print the result in the box on Line 13 under the Louisiana column:"

 

The wording of the first and last sentences above are confusing.  Is it correct to assume the last sentence above doesn't apply if I was never "domiciled" in Louisiana, that I don't have to add non-taxable interest listed on my federal 1040 into line 13 of the Louis?     I would think Louisiana would have no "legal right" to tax my federal non taxable interest shown on 1040 which was earned in other states if I am a NON-RESIDENT of Louisiana (and never was domiciled there) .  I am only filing a non-resident form in Louisiana because I had $26 of income on a K-1 from a LLC commercial property.  

 

Link to instructions is http://www.revenue.louisiana.gov/taxforms/IT540Bi(07).pdf

I  am a non-resident of Louisiana (with no domicile in Louisiana).  I received a K-1 from LLC with $50 in rental income

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Accepted Solutions
WSO
Level 3

Louisiana Non-resident Tax Rules for interest & dividends exempt from Federal Tax

Question resolved.  Louisiana updated their non-resident instructions.  Current Form IT-540B Instructions can be found at https://revenue.louisiana.gov/TaxForms/IT540Bi(2021).pdf    It clearly states that non-resident tax exempt int/div does NOT meet criteria to be included in block 13 as Louisiana income.

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1 Reply
WSO
Level 3

Louisiana Non-resident Tax Rules for interest & dividends exempt from Federal Tax

Question resolved.  Louisiana updated their non-resident instructions.  Current Form IT-540B Instructions can be found at https://revenue.louisiana.gov/TaxForms/IT540Bi(2021).pdf    It clearly states that non-resident tax exempt int/div does NOT meet criteria to be included in block 13 as Louisiana income.

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