Louisiana Citizens Insurance Tax Credit

What is the Louisiana Citizens Insurance Tax Credit?

In December 2006 the Louisiana Legislature enacted Revised Statute 47:6025, which authorized a refundable income tax credit for the LA Citizens assessments that resulted from Hurricanes Katrina and Rita. This credit is available to people who paid the LA Citizens assessments in addition to their homeowner’s or property’s insurance premium. Act 125 of the 2015 Regular Session of the Louisiana Legislature reduced the credit to 72% of the assessment paid for any return filed on or after July 1, 2015. Act 9 of the 2016 Second Extraordinary Session of the Louisiana Legislature reduced the credit to 25% of the assessment paid for any assessments paid starting January 1, 2016.

The LA Citizens assessments are a result of losses on insured property caused by Hurricanes Katrina and Rita. In years when there are no large catastrophic losses, LA Citizens collects enough premiums to cover their cost of operations. However, the massive losses of Hurricanes Katrina and Rita cost LA Citizens over $1.2 Billion, which created a deficit. LA Citizens assessments on home and property insurance policies in Louisiana were used to partially fund this deficit left by Hurricanes Katrina and Rita.

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