House Bill No. 402, also known as the "Tax Cut For Our Veterans Act," proposes to enact a new income tax deduction for Louisiana residents who are veterans with a service-connected disability rating of 50% or more, as determined by the U.S. Department of Veteran Affairs. This deduction will be equal to the standard deduction amount for single individuals, which is currently set at $12,500. The bill outlines that taxpayers claiming this deduction must maintain necessary records to verify their eligibility and provide these records to the Department of Revenue upon request. Additionally, the Secretary of the Department of Revenue is authorized to create rules and regulations to implement this provision.

The provisions of this bill will take effect on January 1, 2026, and will apply to all taxable periods beginning on or after that date. The bill also retains existing law regarding the standard deduction, which will be adjusted annually based on the Consumer Price Index starting in 2026. Notably, the bill removes a previously proposed individual income tax deduction for Louisiana taxpayers aged 65 and older.