Short answer: Louisiana doesn't tax TRSL pensions, refunds or survivor benefits (R.S. 11:704). Federal income tax applies, except on the part that returns contributions you already paid tax on. DROP money stays free of Louisiana tax only if TRSL pays it to you directly. More on DROP payouts: DROP and ILSB; refunds: leaving teaching; the monthly amount: the calculator.
Louisiana: TRSL pensions, annuities, retirement allowances, refunds of contributions and optional benefits are 'exempt from any state or municipal tax, all state income tax' (R.S. 11:704). TRSL survivor/beneficiary benefits are exempt from Louisiana income tax. DROP withdrawals paid directly by TRSL are exempt from Louisiana income tax, but money rolled to an IRA or other plan is subject to state tax when later withdrawn. Federal: benefits are taxable except the part that returns after-tax contributions (Form 1099-R Box 5); refunds and DROP/ILSB withdrawals follow IRS rollover and withholding rules (20% mandatory withholding on eligible rollover distributions paid directly). For other state-tax questions TRSL refers members to the Louisiana Department of Revenue. R.S. 11:704; Death & Survivor Benefits p. 2, Income tax; DROP Handbook p. 20, State income tax; Guide for Retirees pp. 4-5; Special Tax Notice p. 4
For other state-tax questions, TRSL refers members to the Louisiana Department of Revenue. If you live in another state, that state's own rules apply.
From the sources
- Louisiana law exempts TRSL benefits, refunds and optional benefits from all state income tax. Survivor and beneficiary benefits are exempt from Louisiana tax too.R.S. 11:704; Death & Survivor Benefits p. 2
- DROP withdrawals paid straight to you by TRSL are exempt from Louisiana income tax. If you roll them into an IRA or other plan, later withdrawals from that account are taxed by the state.DROP Handbook p. 20, State income tax
- Federal income tax applies to TRSL benefits except the part that returns contributions you already paid tax on (Box 5 of Form 1099-R).Guide for Retirees pp. 4-5
- Each January TRSL mails a Form 1099-R; if it hasn't arrived by February 15, contact TRSL. It is also on myTRSL. Box 2a is the taxable amount, Box 4 the federal tax withheld, and Box 5 the tax-free part that returns contributions you already paid tax on.Guide for Retirees pp. 4-5, Income tax information
- DROP withdrawals paid to you get one Form 1099-R, separate from the 1099-R for your monthly benefit.DROP Handbook p. 20, State income tax
- DROP withdrawals set up to last your projected lifetime or 10 years or more have no mandatory 20% federal withholding and can't be rolled over. Withdrawals that empty the account in under 10 years have the 20% withholding but can be rolled over.DROP Handbook p. 18
- TRSL's example: on a $10,000 taxable eligible rollover distribution paid to you, TRSL withholds $2,000 and pays $8,000. Unless you roll it over within 60 days, you report the full $10,000 as taxable and the $2,000 as tax withheld.Special Tax Notice p. 3, Federal income tax withholding
- Retirees can change their tax withholding and view or print their 1099-R on myTRSL.Guide for Retirees p. 12
Questions
Does Louisiana tax TRSL pensions?
No. Louisiana law (R.S. 11:704) exempts TRSL benefits, refunds and optional benefits from state income tax. Survivor and beneficiary benefits are exempt too.
Are DROP withdrawals taxed in Louisiana?
Not if TRSL pays them straight to you. If you roll the money into an IRA or another plan, Louisiana taxes it when you take it out of that account.
Is my TRSL pension taxed federally?
Yes, except the part that returns contributions you already paid tax on. That amount is in Box 5 of your Form 1099-R.
Source: TRSL Member Handbook: Regular Plan & Plan B, Last revised April 2026. Also: Death & Survivor Benefits p. 2; DROP Handbook pp. 18, 20; Guide for Retirees pp. 4-5, 12; Special Tax Notice pp. 3, 4; La. R.S. 11:704. Last reviewed .