Did the Tax Cuts and Jobs Act's zero federal personal-exemption amount eliminate Louisiana personal exemptions and dependent tax benefits?

Plain-English summary

Louisiana Revenue Ruling 18-001 said the Tax Cuts and Jobs Act did not eliminate Louisiana personal exemptions or state tax provisions tied to dependents.

For federal tax years 2018 through 2025, the Act set the dollar amount of each federal personal exemption to zero. But it did not repeal the statutory number of exemptions for the taxpayer, spouse, and dependents.

Louisiana followed the federal number of allowable exemptions but supplied its own state exemption amounts. As a result, the zero federal dollar value did not reduce Louisiana's state exemptions under the law described in the ruling.

Louisiana deductions and credits that referred to a dependent also remained available; federal law still recognized who counted as a dependent even though the federal personal-exemption amount was zero.

Federal change: amount versus count

IRC § 151(a), (b), and (c) identified the exemptions a taxpayer could claim for self, spouse, and dependents.

The Tax Cuts and Jobs Act amended § 151(d) so the "exemption amount" was zero for 2018 through 2025. It also clarified that the exemptions remained allowed despite that zero value.

The ruling's example used a married couple with two children. The family still had four federal exemptions during the period, but each federal exemption was valued at $0.

Louisiana's conformity approach

Louisiana used rolling conformity for federal adjusted gross income, meaning changes to the federal AGI calculation generally flowed into Louisiana law automatically.

Personal exemptions worked differently:

• Louisiana followed federal law for the number of exemptions and required the same filing status and exemptions used federally; but
• Louisiana applied state dollar amounts under La. R.S. 47:294 rather than the federal exemption amount.

The 2018 statute quoted in the ruling provided combined personal-exemption and standard-deduction amounts of $4,500 for single and married-separate filers and $9,000 for married-joint, qualifying-surviving-spouse, and head-of-household filers. It also allowed an additional $1,000 for each qualifying exemption beyond those built into the filing-status amount.

Those are historical amounts from the ruling and should not be assumed current.

Dependent deductions and credits

The ruling listed Louisiana provisions that continued to use dependent status, including:

• withholding allowances;
• START education-account contributions;
• disability-related credits;
• credits for accessible-home construction or renovation;
• credits for maintaining a household with disabled dependents;
• child-care and earned-income credits;
• military hunting and fishing license credits; and
• private-school, home-school, and public-school education deductions.

Because federal law preserved the dependent and exemption count, setting the federal exemption amount to zero did not eliminate those Louisiana provisions.

What this means for you

Tax years 2018 through 2025

Do not treat a zero federal exemption amount as zero Louisiana exemptions. The state calculation used the federal count and Louisiana amounts described in the ruling.

Families claiming dependent benefits

Federal dependent status continued to matter for Louisiana deductions and credits even when no federal personal-exemption deduction was available.

Current returns

The federal zero-exemption period addressed by this ruling ended after 2025. Verify current federal law, Louisiana amounts, and state forms for 2026 and later.

Common questions

Q: Did the TCJA repeal federal personal exemptions?

A: The ruling said it retained the exemptions but set their federal dollar amount to zero for 2018-2025.

Q: Did Louisiana use the zero federal dollar amount?

A: No. Louisiana used its own state amounts.

Q: Did dependent-related Louisiana credits disappear?

A: No under the ruling. Federal law still recognized dependent status and exemption counts.

Q: Are the dollar amounts quoted in RR 18-001 current?

A: Not necessarily. They are the amounts stated in the 2018 ruling.

Citations and references

• IRC § 151 — federal personal exemptions and the 2018-2025 zero amount
• Pub. L. 115-97 § 11041 — Tax Cuts and Jobs Act amendment discussed
• La. R.S. 47:293(1) — Louisiana adjusted-gross-income conformity
• La. R.S. 47:294 — Louisiana filing status, personal exemptions, and state amounts
• La. R.S. 47:112(F), 47:297, 47:297.2, 47:297.4, 47:297.8-.12, and 47:6104 — dependent provisions discussed
• LAC 61:III.101(C) — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 18-001

Original ruling text

Revenue Ruling No. 18-001
December 21, 2018
Individual Income Tax
Louisiana Personal Exemptions Unaffected by Federal Tax Reform
Purpose
The purpose of this ruling is to explain the impact of amended Internal Revenue Code (“IRC”)
Section 151 on Louisiana individual income tax provisions.
Facts
Federal Changes to Personal Exemptions
On December 22, 2017, Public Law 115‐97, more commonly referred to as the Tax Cuts and Jobs
Act (“Act”), was enacted into federal law, enacting the largest restructuring of the federal tax code
since the Tax Reform Act of 1986. The changes are effective for tax years beginning on or after
January 1, 2018.
Section 11041 of the Act amends IRC Section 151 regarding the allowance of deductions for
personal exemptions. IRC Section 151(a), (b), and (c) provide for the number of exemptions a
taxpayer may claim on a return (taxpayer, spouse, and dependent exemptions) and IRC Section
151(d) provides for the amount of each exemption.
IRC Section 151(d)(5) provides that the personal exemption amount is reduced to zero for the 2018
through 2025 tax years. Specifically, IRC Section 151(d)(5)(A) reduces the exemption amount to
zero and IRC Section 151(d)(5)(B) clarifies that the exemptions, although valued at zero, are still
allowed. Section 11041 amended IRC Section 151(d) to provide, that for the tax years 2018
through 2025, that “the term ‘exemption amount’ means zero”. The Act does not amend IRC
Section 151(a), (b), or (c).
Therefore, taxpayers retain their number of exemptions from 2018 through 2025; however, the
value of the exemptions is zero. For example, a married couple with two children is allowed four
exemptions. Prior to tax year 2018, the exemptions were valued at $8,000 before inflation
adjustments. For tax years 2018 through 2025, the family continues to have four exemptions
although the exemptions are valued at $0.00.

A Revenue Ruling is issued under the authority of LAC 61III.101 (C). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not
binding on the public. It is a statement of the department's position and is binding on the department until
superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

Revenue Ruling No. 18-001
December 21, 2018
Page 2 of 4

Analysis and Discussion
Adjusted Gross Income
For individual income tax purposes, Louisiana conforms to the federal adjusted gross income
calculation. Louisiana's conformity is referred to as rolling conformity, meaning as the IRC
changes, Louisiana's individual income tax laws automatically change to mirror the IRC. See LA
R.S. 47:293(1).
In contrast, static (or fixed-date) conformity uses federal laws as of a specific date defined in state
legislation. To conform to federal changes passed after that specific date, a static conformity state
must pass legislation to establish a new conformity date.
Personal Exemptions
Louisiana has rolling conformity with federal law regarding the number of allowable personal
exemptions. However, Louisiana does not conform to the amount allowed for personal
exemptions. LA R.S. 47:294 provides in part:
All personal exemptions and deductions for dependents allowed in determining
federal income tax liability, including the extra exemption for the blind and aged,
will be allowed in determining the tax liability in this Part.
Taxpayers are required to use the same filing status and claim the same
exemptions on their return required to be filed under this Part as they used on
their federal income tax return. The amounts to be taken into consideration shall
be as follows:
A. A combined personal exemption and standard deduction in the following
amounts:
a. Single Individual
$4500.00
b. Married-Joint Return and a Qualified Surviving Spouse $9000.00
c. Married-Separate
$4500.00
d. Head of Household
$9000.00
B. An additional deduction of one thousand dollars shall be allowed for each
allowable exemption in excess of those required to qualify for the exemption
allowable under R.S. 47:294(A).

A Revenue Ruling is issued under the authority of LAC 61III.101 (C). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not
binding on the public. It is a statement of the department's position and is binding on the department until
superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

Revenue Ruling No. 18-001
December 21, 2018
Page 3 of 4

Louisiana law adopts the number of personal exemptions allowed by federal law; however,
Louisiana applies its own state exemption amounts to the exemptions allowed.
Other Deductions and Credits which Reference “Dependents”
Numerous Louisiana individual income tax deductions and credits reference a taxpayer’s
“dependent”. These provisions are not affected by the federal tax law change which reduces the
personal exemption amount to zero for the 2018 through 2025 tax years. Unaffected Louisiana
provisions include but are not limited to:

1. LA R.S. 47:112(F) allows an individual income tax withholding exemption for a taxpayer
   and spouse and allows a credit for dependents.
2. LA R.S. 47:293(9)(a)(viii) allows an individual income tax deduction for contributions
   made to a START account by a qualified account owner. A qualified account owner
   includes a person who claims the beneficiary as a dependent on their federal income tax
   return.
3. LA R.S. 47:297(A) allows an individual income tax credit for a taxpayer, spouse, or
   dependent who is deaf, blind, mentally incapacitated, or has lost the use of one or more
   limbs.
4. LA R.S. 47:297(P) allows an individual income tax credit for the construction or renovation
   of a dwelling to accommodate a taxpayer, spouse, or dependent who has a physical
   disability.
5. LA R.S. 47:297.2 allows an individual income tax credit for a taxpayer who maintains a
   household that includes physically or mentally disabled dependents.
6. LA R.S. 47:297.4 allows an individual income tax credit for a percentage of the federal
   credit allowed for child care expenses paid for the care of the taxpayer’s dependent which
   enables the taxpayer to be gainfully employed.
7. LA R.S. 47:297.8 allows an individual income tax credit for a percentage of the federal
   earned income tax credit which is based in part on the number of the taxpayer’s
   dependents.
8. LA R.S. 47:297.9 allows an individual income tax credit for a percentage of the amount
   paid by a military service member for a Louisiana hunting or fishing license for the
   taxpayer, spouse, or dependent.

A Revenue Ruling is issued under the authority of LAC 61III.101 (C). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not
binding on the public. It is a statement of the department's position and is binding on the department until
superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

Revenue Ruling No. 18-001
December 21, 2018
Page 4 of 4

9. LA R.S. 47:297.10 allows an individual income tax deduction for tuition and fees paid to
   a private elementary or secondary school required for enrollment of the taxpayer’s
   dependent.
10. LA R.S. 47:297.11 allows an individual income tax deduction for educational expenses
    paid by a taxpayer for the home-schooling of the taxpayer’s dependent.
11. LA R.S. 47:297.12 allows an individual income tax deduction for educational expenses
    paid by a taxpayer which are associated with the enrollment of the taxpayer’s dependent
    in a public elementary or secondary school.
12. LA R.S. 47:6104 allows an individual income tax credit for child care expenses paid for
    the care of the taxpayer’s dependent which enables the taxpayer to be gainfully employed.
    Ruling
    The recent federal tax law changes enacted by the TCJA retain the personal exemptions for a
    taxpayer, spouse, and dependents but reduce the personal exemption amount to zero for the 2018
    through 2025 tax years.
    Louisiana law adopts the number of personal exemptions allowed by federal law; however,
    Louisiana applies its own state exemption amounts to the exemptions allowed. Therefore,
    although the federal personal exemption amounts have been reduced to zero for the 2018 through
    2025 tax years, the Louisiana individual income tax personal exemptions remain unchanged and
    are allowed in the amounts as provided by LA R.S. 47:294.
    Additionally, the numerous Louisiana individual income tax deductions and credits which
    reference a taxpayer’s “dependent” are not affected by the federal tax law changes which reduce
    the personal exemption amount to zero for the 2018 through 2025 tax years.
    Kimberly Lewis Robinson
    Secretary

A Revenue Ruling is issued under the authority of LAC 61III.101 (C). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not
binding on the public. It is a statement of the department's position and is binding on the department until
superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.