City & Local Income Taxes (2026)

Local income taxes are additional taxes levied by cities, counties, or municipalities on top of federal and state income taxes. These taxes are typically a flat percentage of your income and are withheld by your employer if you live or work in a jurisdiction that requires it.

Local taxes are separate from state income tax and are calculated independently. They can significantly impact your take-home pay, especially in high-tax metropolitan areas.

Local income taxes are most common in states that already have state income tax. The following states have jurisdictions with local income taxes:

• Alabama
• Colorado
• Delaware
• District of Columbia
• Indiana
• Iowa
• Kentucky
• Maryland
• Michigan
• Missouri
• New Jersey
• New York
• Ohio
• Oregon
• Pennsylvania
• West Virginia

Within these states, specific cities, counties, or school districts may levy local income taxes. Rates vary by jurisdiction and can change annually.

Local income taxes are typically:

• Flat rate: Most local taxes are a flat percentage of your income, not progressive brackets
• Withheld automatically: Your employer withholds local tax if you live or work in a jurisdiction that requires it
• Based on where you live, work, or both: Maryland and Indiana residents pay their home county's tax, while Alabama and Kentucky occupational taxes follow your workplace
• Separate from state tax: Local tax is calculated independently from state income tax

Some jurisdictions have reciprocity agreements, meaning if you live in one city and work in another, you may only pay tax to your city of residence. Check with your employer or local tax authority for specific rules.

Local tax rates vary widely by jurisdiction. Some examples:

Rates can change annually, and some jurisdictions have different rates for residents vs. non-residents. Always verify current rates with your employer or local tax authority.

Local income taxes directly reduce your take-home pay. For example, if you earn $100,000 and owe a 2% local tax, you'll pay $2,000 annually in local tax, or approximately $77 per bi-weekly paycheck.

Combined with federal and state taxes, local taxes can significantly reduce your net pay, especially in high-tax metropolitan areas. Use our calculator to see exactly how local taxes affect your take-home pay.

We hold a guide for each of the 72 places below. For the 62 that levy a local income tax it covers the resident and non-resident rate, who has to pay it, and how much it takes out of a typical paycheck. For the other 10 it says what applies instead: no city tax, a tax the employer pays, a flat fee, or a tax that starts only at high incomes.