Local income tax rates change for a few Indiana counties
Oct. 7, 2013 – TaxTalk Blog
Local income tax rates are established or adjusted by county officials and annually reported to the department. Departmental Notice #1 has recently been updated with a few counties’ changes, which can affect individuals, businesses and tax professionals.
Allen, Hancock, Jasper, Madison, and Washington counties changed their withholding rates, which became effective Oct. 1, 2013. In addition, Lake County has adopted a county tax, making them the last county in the state to do so. (For specific questions about the impact of Lake County tax, see the FAQs at www.in.gov/dor/files/lake-county-loit-faqs.pdf. )
The rate changes are as follows:
- Allen – The resident rate has increased to .0135; the nonresident rate has increased to .006375.
- Hancock – The resident rate has increased to .0165. The nonresident rate has increased to .0045.
- Jasper – The resident rate has decreased to .02964; the nonresident rate remains unchanged at .005.
- Lake – The resident rate is .015; the nonresident rate is .005.
- Madison – The nonresident rate has decreased to .004375.
- Washington – The resident rate has increased to .02; the nonresident rate remains unchanged at .0075.
This year Indiana law was changed to allow counties’ local tax rates to change no more than twice throughout the year (previously, changes could occur up to three times a year). Rates adopted by the county:
- from Jan. 1 through Sept. 30 take effect Oct. 1, 2013.
- after Sept. 30 but before Nov. 1 take effect Jan. 1, 2014.
Keep an eye on the department’s website for more changes to take effect on Jan. 1, 2014.
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