This bill enacts new provisions in Louisiana law regarding individual income tax, specifically allowing a deduction for hardship distributions from retirement accounts. The new section, R.S. 47:297.26, establishes that qualifying resident taxpayers can deduct amounts received through hardship distributions in a taxable year. A "hardship distribution" is defined as a withdrawal made due to an immediate and serious financial need, while a "qualifying taxpayer" is one who has been diagnosed with a terminal illness by a licensed physician, which can also include their spouse in the case of joint filers.

The bill also modifies the definition of "tax table income" in R.S. 47:293 to include this new deduction for hardship distributions. The provisions of the act will apply to taxable periods beginning on or after January 1, 2026, and the act itself will become effective on that same date.