What interest and dividends are eligible for exclusions from Louisiana income tax?

Louisiana exempts interest and dividends earned on federal obligations and obligations from the State of Louisiana and its political subdivisions and municipalities.

• Interest and dividends from all state and local government obligations are exempt from federal income tax. Louisiana only exempts interest and dividends from obligations from the State of Louisiana and its political subdivisions and municipalities. Since interest and dividends from obligations of the State of Louisiana and its political subdivisions and municipalities are exempt from both federal and Louisiana income tax, no adjustment is required on Schedule E because the interest and dividends are not included in federal adjusted gross income.
• Interest and dividends from obligations from other states or their political or municipal subdivisions are exempt from federal income tax but taxed by Louisiana. For residents, these amounts must be reported on IT-540, Schedule E, Line 2, and will be added to the taxpayer’s Louisiana adjusted gross income. On the IT-540B, it will be reported on the Nonresident and Part-Year Resident Worksheet. See Revenue Information Bulletin 08-019 for more information.
• Interest and dividends earned on U.S. Government obligations are subject to federal income tax but exempt from Louisiana income tax. For resident, these amounts are deducted on IT-540, Schedule E, Line 4, using the code 01E. On the IT-540B, it will be deducted on the Nonresident and Part-Year Resident Worksheet.