Income Exemption and Carryforward Provisions of the START K12 Program

START K12 account owners filing a single or married filing separately tax return may exempt up to a maximum of $1,200 per beneficiary for Louisiana individual income tax purposes. An account owner filing a joint return may exempt up to a maximum of $2,400 per beneficiary for Louisiana individual income tax purposes. With respect to a carryforward, the Department of Revenue will review the specific START K12 account when determining the amount of the carryforward.

Since the statute states that the deposited amounts shall be exempt, an individual is not allowed to select the amount of the exemption. The amount of the exemption is the amount that is deposited in the START K12 account with a maximum of $1,200 for single filers and $2,400 for joint filers. The statute also indicates that a carryforward only exists if an individual deposits less than the maximum allowable exemption amount into the START K12 account.

If an individual deposits less than the maximum allowable exemption into a beneficiary's account, the difference between the total deposits and the maximum exemption shall carried forward to subsequent years. However, if an individual claims an exemption less than the amount contributed to the START K12 account, then the difference between the amount claimed and what was deposited cannot be carried forward to subsequent years.

If a taxpayer has an active START K12 account but fails to contribute in a tax year, the full amount that could have been contributed and exempted for that year will be carried forward to the following year.

Limitations for Income Exemption Provision:

A taxpayer’s tax table income will not be reduced to zero due to contributions made to a START K12 account. Additionally, a taxpayer is prohibited from claiming other deductions for costs associated with the same dollars deposited into a START K12 account. For example, if an individual contributes $1,200 to a START K12 account to be claimed on their 2022 return, the taxpayer cannot then claim the same $1,200 on their return under the Elementary and Secondary School Tuition Deduction, Educational Expenses for Home-schooled Children Deduction or the Educational Expenses for a Quality Public Education Deduction when the funds are withdrawn to pay school expenses. Furthermore, taxpayers cannot claim the income exemption for amounts withdrawn from their START K12 account in the same tax year.