Louisiana Update: Tax Exemption for COVID-19 Relief Benefits

Allison Civello, CPA, discusses the new Louisiana law that provides an individual and corporate income tax exemption for COVID-19 relief benefits:

Louisiana has enacted an exemption from individual and corporation income tax for state and federal COVID-19 relief benefits received. The law exempts from income any gratuitous grant, loan, rebate, tax credit, advance refund, or other qualified disaster relief benefit provided directly or indirectly by the state or federal government as a COVID-19 relief benefit, if included in federal gross income. This provision is not applicable to any unemployment compensation benefits provided to a taxpayer that are included in taxable income. The exemption applies both retroactively and prospectively.

Signed by the Governor, Act 54 (S.B. 11) is effective June 4, 2021. This week Governor John Bel Edwards signed the bill to exempt from income taxes most COVID-19 Benefits. Included in the new law is a list of exempt income items, which specifically does include the LA Main Street Grant now. (The Louisiana Department of Revenue had deemed the Main Street program taxable earlier in 2021.) The new law does not expand the exemption for unemployment compensation past the $10,200 that had previously been allowed. Additionally, some of these benefits may still be taxable for Federal tax purposes.


If you have already filed your 2020 corporate or individual tax return and received the now exempt benefits, please discuss filing an amended tax return with your advisor. If you have any questions about the new Louisiana Law providing the Tax Exemption for COVID-19 Relief Benefits, please contact Wegmann Dazet!