City & Local Income Taxes (2026)

Understanding how city and local income taxes work and where they apply.

TL;DR

•Local income taxes are additional taxes levied by cities, counties, or municipalities on top of federal and state income taxes.
•Local taxes are typically a flat percentage of your income and are withheld automatically by your employer if you 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 tax rates vary widely by jurisdiction and can change annually. Always verify current rates with your employer or local tax authority.

What are local income taxes?

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 work in a jurisdiction that requires it.

Key Takeaway

Local taxes are typically based on where you work, not where you live. If you work in a city with local tax but live outside it, you still pay the local tax.

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.

Where local taxes apply

Local income taxes are most common in states that already have state income tax. Specific cities, counties, or school districts within these states may levy local income taxes.

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

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

How local taxes work

Local income taxes are typically flat rates that are withheld automatically by your employer. Tax is usually based on where you perform work, not where you live.

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 work in a jurisdiction that requires it
Based on work location: Tax is typically based on where you perform work, not where you live
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.

Common local tax rates

Local tax rates vary widely by jurisdiction. Rates can change annually, and some jurisdictions have different rates for residents vs. non-residents.

Rate Changes

Local tax rates can change each year. Your employer should automatically update withholding, but it's worth verifying if you notice changes in your paycheck.

Local tax rates vary widely by jurisdiction. Some examples:

Common local tax rates (rates may change annually)
City/Jurisdiction	Resident Rate	Non-Resident Rate
New York City	3.876%	0.414%
Philadelphia	3.8712%	3.4481%
San Francisco	No local tax	No local tax
Many Ohio cities	1-2.5%	Varies by city

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.

How this affects take-home pay

Local income taxes directly reduce your take-home pay. Combined with federal and state taxes, local taxes can significantly reduce your net pay, especially in high-tax metropolitan areas.

Local income taxes directly reduce your take-home pay. For example, if you earn $100,000 and work in a city with 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.

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