House Bill No. 402, 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. The bill adds new legal language to R.S. 47:293(9)(a)(xxvii) and R.S. 47:297.26, allowing these veterans to claim a deduction equal to the standard deduction for single filers, which is currently set at $12,500. This deduction is in addition to the standard deduction already available to all taxpayers.

To ensure compliance, the bill requires veterans claiming this deduction to maintain necessary records to verify their eligibility and to provide these records to the Department of Revenue upon request when filing their tax returns. Furthermore, the Secretary of the Department of Revenue is authorized to create rules and regulations to implement this provision. The new tax deduction will be applicable to all taxable periods beginning on or after January 1, 2026, and the bill is set to take effect on that same date.