WHAT’S NEW FOR LOUISIANA 2018 INDIVIDUAL INCOME TAX?
WHAT'S NEW FOR LOUISIANA 2018 INDIVIDUAL INCOME TAX?
Consumer Use Tax ? Lines 24A and 24B ? Under La. R.S. 47:302(K), LDR is required to collect 9 percent tax on out-of-state purchases. Act 1 of the 2018 Third Extraordinary Legislative Session reduced the use tax to 8.45 percent tax on out-ofstate purchases made on or after July 1, 2018.
Unidentified Preparer Penalty ? Act 525 of the 2018 Regular Legislative Session imposes a penalty on paid preparers who fail to sign or provide the identification number required by R.S. 47:1679 when completing this return. The penalty is $50 for each occurrence of failing to sign or failing to provide an identification number and cannot exceed $25,000 during any calendar year.
SCHEDULE F ? REFUNDABLE PRIORITY 2 CREDITS School Readiness Child Care Directors and Staff ? Code 66F ? The credit is for eligible child care directors and eligible child care staff based on certain attained qualifications. The amount of the credit is adjusted each year if there is an increase in the Consumer Price Index Urban (CPI-U). The credit amount for 2018 can be found at revenue.SchoolReadiness. For more information regarding this credit, contact the Louisiana Department of Education. (R.S. 47:6106)
SCHEDULE J ? NONREFUNDABLE PRIORITY 3 CREDITS
SCHEDULE C ? NONREFUNDABLE PRIORITY 1 CREDITS
Credit for Taxes Paid to Other States ? Line 1 ? Act 6 of the 2018 Second Extraordinary Legislative Session extended the limitations imposed by Act 109 of the 2015 Regular Legislative Session and limited the credit to the amount of taxes paid to the other state, or the amount determined by multiplying the taxpayer's Louisiana income tax liability by a fraction, the numerator of which is the taxpayer's Louisiana tax table income attributable to the other state to which net income taxes were paid, and the denominator of which is total Louisiana tax table income. See Revenue Information Bulletin 18-029. (R.S. 47:33)
Small Town Health Professionals ? Code 115 ? The Small Town Doctor/Dentist credit was renamed to Small Town Health Professionals credit per changes made in Act 342 of the 2017 Regular Legislative Session. The credit is for certified primary care physicians, dentists, or primary care nurse practitioners licensed to practice in certain areas of Louisiana. Taxpayers must apply to the Louisiana Department of Health (LDH) by November 30, 2018, for eligibility for 2018 and a copy of the certificate letter must be attached to the return. The credit amount is listed on the certificate letter and is limited to tax. For more information, see Revenue Information Bulletin 18-028 and Louisiana Administrative Code (LAC) 61:I.1915. (R.S. 47:297(H))
Conversion of Vehicle to Alternative Fuel ? Code 185 ? Act 325 of the 2017 Regular Legislative Session changed the credit to a nonrefundable credit. For purchases of new motor vehicles, the credit is equal to 10 percent of the cost of the qualified clean-burning motor vehicle or $2,500, whichever is less. For conversions and fueling stations, the credit is equal to 30 percent of the cost of the qualified cleanburning motor vehicle fuel property. See Revenue Information Bulletin 17-016. (R.S. 47:6035) Use credit code 71F on Schedule F to report the Act 125 recovery amount.
SCHEDULE D ? DONATION OF REFUND
Taxpayers can donate all or part of their refund to various organizations or funds. The following new organizations appear on Schedule D:
Line 19 ? Louisiana Horse Rescue Association
Line 20 ? Louisiana Coalition Against Domestic Violence
SCHEDULE E ? ADJUSTMENTS TO INCOME
Child Care Credit Carried Forward From 2013 through 2017 ? Line 3 ? The child care tax credit for taxpayers whose federal adjusted gross income exceeds $25,000 may not be refunded and any unused credit amounts can be used over the next five years. For the 2018 tax year, credits from 2013 through 2017 can be applied on Line 3. Any remaining child care credit from 2012 cannot be applied to the 2018 tax liability. (R.S. 47:297.4)
School Readiness Credit Carried Forward From 2013 through 2017 ? Line 5 ? The school readiness credit for taxpayers whose federal adjusted gross income exceeds $25,000 may not be refunded and any unused credit amounts can be used over the next five years. For the 2018 tax year, credits from 2013 through 2017 can be applied on Line 5. Any remaining credit from 2012 cannot be applied to the 2018 tax liability. (R.S. 47:6104)
Donation to School Tuition Organization ? Code 213 ? Act 377 of the 2017 Regular Legislative Session changed the School Tuition Organization (STO) rebate to a nonrefundable credit for donations made on or after January 1, 2018 to an STO that provides scholarships to qualified students to attend a qualified school. The credit is limited to tax and unused credits may be carried forward for a period not to exceed three years. The donor must be a taxpayer who is required to file a Louisiana income tax return and if the credit is claimed, no other Louisiana tax benefit is allowed for the same donation. See Revenue Information Bulletin 18-024. (R.S. 47:6301)
Owner of Accessible and Barrier-free Home ? Code 221 ? Act 270 of the 2017 Regular Legislative Session made changes to the credit for taxpayers who include accessible and barrier-free design elements in the construction of a new one or two family dwelling or the renovation of an existing dwelling of the taxpayer. The credit is for the lesser of $5,000 or the cost of the construction or renovation, and is taken in the taxable year that the construction or renovation is completed. The total amount of credits granted in any calendar year is limited to $500,000 and the credits will be granted on a first-come, first-serve basis. See Revenue Information Bulletin 18-027. (R.S. 47:297(P)) Use credit code 145 on Schedule C to report the Act 125 recovery amount.
Research and Development ? Code 252 ? Act 336 of the 2017 Regular Legislative Session provides that credits earned based on participation in the Small Business Technology Transfer Program or the Small Business Innovation Research Grant program may be sold or transferred to another taxpayer beginning with the 2018 tax year. (R.S. 47:6015)
Add Back of Donation to School Tuition Organization Credit ? Line 2B ? Act 377 of the 2017 Regular Legislative Session provides for a prohibition on double state benefits for a donation to a school tuition organization. If you claimed the credit for a donation to school tuition organization on Form IT-540, Schedule J, you must add back certain deductions taken at the federal level otherwise deductible for state income tax purposes if the following conditions are met:
a. Your federal itemized deductions allowed by Internal Revenue Code Section 170 included the donation made to the school tuition organization as a charitable contribution on Schedule A attached to Federal Form 1040; and
b. You claimed the excess federal itemized personal deduction on Form IT-540, Line 8C for the tax year in which the donation was made.
OTHER
R-6311, Tax Incentives with Job Creation Components Act 87 of the 2018 Regular Legislative Session requires additional annual reporting of tax credits that include a job creation component by LDR. These credits are: Employment of Certain First Time Drug Offenders, Employment of First Time Nonviolent Offenders, Employment of Previously Unemployed, Hiring Eligible Re-entrants, New Jobs, and Credit for Certain Federal Tax Credits - Federal Work Opportunity Credit. All taxpayers claiming these credits will need to report the number of employees hired qualifying for the credit and the number of those that had a Louisiana driver's license at the time that they were hired on Form R-6311. This form should be completed by the entity or person that earned the credit and must be attached to the return being filed by the taxpayer claiming the credit.
The amount required to be added back is the difference between the amount reported on Form IT-540, Line 8C and the recalculated excess federal itemized personal deduction after removing the donation from the individual's federal itemized personal deduction for the tax year in which the donation was made. The addition is limited to the amount of the credit claimed. See Revenue Information Bulletin 18-029. (R.S. 47:6301(A)(1)(a))
Entity Level Taxes Paid to Other States ? Code 23E ? Act 6 of the 2018 Second Extraordinary Legislative Session provides a deduction for an individual partner, member, or shareholder's proportionate share of an entity-level tax paid to other states that is based solely upon net income included in the entity's federal taxable income without any capital component. The deduction is for the taxpayer's share of the tax paid during 2018 and is limited to the extent that the proportionate share of the related income is or was taxed by Louisiana. See Revenue Information Bulletin 18-029. (R.S. 47:33)
VISIT THESE LDR WEBSITES: ? revenue.taxforms for forms and instructions. ? revenue.individuals for tax information. ? revenue.fileonline for free filing options. ? revenue.latap for free payment options.
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