Five Indiana Counties Increasing Tax Rates on October 1

Effective October 1, 2022, the Indiana Department of Revenue has issued a new Departmental Notice No. 1, How to Compute Withholding for State and County Income Tax. Five counties—Boone, Johnson, Knox, LaPorte, and Monroe—are increasing their income tax rates:

• Boone County increased to 0.017 from 0.015
• Johnson County increased to 0.014 from 0.012
• Knox County increased to 0.017 from 0.012
• LaPorte County increased to 0.0145 from 0.0095
• Monroe County increased to 0.02035 from 0.01345

All 92 of Indiana’s counties impose a county income tax on residents of the county and on nonresidents—who do not reside in another Indiana county—with a principal place of business or employment in the county. Each county has one county income tax rate (i.e., tax rates are the same for residents and nonresidents). Employers withhold state and county income taxes from employees’ wages.

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Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.