Marion County (Indianapolis) Local Tax Guide (2026)
Understanding how local taxes work in Marion County (Indianapolis), Indiana, and how they affect your take-home pay.
In this guide
Last updated: October 1, 2026
- •Marion County (Indianapolis) has a local county tax on the people who live in the county, wherever they work.
- •Residents pay 2.02% on all income.
- •Local tax is separate from Indiana state tax and federal tax. Both are calculated independently and add to your total tax burden.
- •Local tax directly reduces your take-home pay. Combined with state and federal taxes, the total tax burden can be significant for high earners.
What Marion County (Indianapolis) local tax costs at three incomes
The 2.02% resident rate is charged on top of federal tax, Indiana state tax and FICA. Priced for 2026, a $75,000 salary loses $1,515 to Marion County (Indianapolis) alone and takes home $57,865: a combined 22.8% of gross across all four.
| Salary | Marion County (Indianapolis) tax | Indiana tax | Federal + FICA | Take-home | Total rate |
|---|---|---|---|---|---|
| $50,000 | $1,010 | $1,475 | $7,645 | $39,870 | 20.3% |
| $75,000 | $1,515 | $2,213 | $13,408 | $57,865 | 22.8% |
| $120,000 | $2,424 | $3,540 | $26,750 | $87,286 | 27.3% |
How Marion County (Indianapolis) compares
Of the 62 US jurisdictions that levy a local income tax, Marion County (Indianapolis) ranks 41st by resident rate. The median is 2.50%, the highest is New York City at 3.078%–3.876%, and the lowest is St. Louis at 1.00%. Immediately above Marion County (Indianapolis) sits Louisville (2.20%) and below it Bowling Green (2.00%).
Within Indiana, 5 jurisdictions charge a local income tax and Marion County (Indianapolis) is the 1st highest. Same salary, different address:
| Indiana jurisdiction | Resident rate | Cost on $75,000 |
|---|---|---|
| Marion County (Indianapolis) | 2.02% | $1,515 |
| St. Joseph County (South Bend) | 1.75% | $1,313 |
| Allen County (Fort Wayne) | 1.59% | $1,193 |
| Lake County | 1.50% | $1,125 |
| Vanderburgh County (Evansville) | 1.25% | $938 |
What local taxes apply in Marion County (Indianapolis)
Marion County (Indianapolis) has a local county tax on the people who live in the county, wherever they work.
Key Takeaway
| Residency Status | Rate | Applies To |
|---|---|---|
| Resident | 2.02% | All income |
Marion County (Indianapolis) has a local county tax on the people who live in the county, wherever they work.
Indiana county income tax follows where you live: Indiana residents pay the rate of the county they lived in on January 1, wherever they work. Only people who lived outside Indiana on January 1 pay the rate of the county where they mainly work.
Residents: If you live in Marion County (Indianapolis), you pay 2.02% on all your income.
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How they interact with state taxes
Marion County (Indianapolis) local tax is calculated separately from Indiana state income tax. Both taxes are calculated on your taxable income and are withheld by your employer.
Tax Deduction
Marion County (Indianapolis) local tax is calculated separately from Indiana state income tax. This means:
- Local tax is in addition to state tax, not instead of it
- Both taxes are calculated on your taxable income (or wages, depending on the tax type)
- Your employer withholds both local and state taxes from your paycheck
- You may be able to deduct local tax on your state tax return, depending on Indiana tax rules
For example, if you earn $100,000 in Marion County (Indianapolis), you pay Indiana state tax on that income, plus Marion County (Indianapolis) local tax. The local tax doesn't reduce your state taxable income.
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Who is affected
You're subject to Marion County (Indianapolis) local tax if you live in the county, wherever you work.
You're subject to Marion County (Indianapolis) local tax if:
- You live in Marion County (Indianapolis) (residents pay on all income)
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Common paycheck misconceptions
Common misunderstandings about Marion County (Indianapolis) local tax, including when it applies and how it's calculated.
Common misconceptions about Marion County (Indianapolis) local tax:
- "It's the same as state tax": False. Local tax is separate from Indiana state tax and is calculated independently.
- "I only pay if I live there": True for residents, but check if non-residents are subject to tax.
- "Remote work means no tax": If you're a Marion County (Indianapolis) resident, you typically pay on all income regardless of where you work.
Take-home pay impact
Marion County (Indianapolis) local tax directly reduces your take-home pay. The amount depends on your income level and whether you're a resident or non-resident.
Marion County (Indianapolis) local tax directly reduces your take-home pay. For example, if you earn $100,000 as a Marion County (Indianapolis) resident:
- Local tax: approximately $2020 annually
- This reduces your bi-weekly paycheck by about $78
- Combined with Indiana state tax and federal tax, the total tax burden can be significant
To see exactly how Marion County (Indianapolis) local tax affects your paycheck, use our calculator above. You can adjust your income, filing status, and deductions to see how different scenarios affect your net pay.
Want to see this with your numbers? Try the calculator with your numbers →
Does this apply to you?
Determine whether you're subject to Marion County (Indianapolis) local tax based on where you live and work.
Check Your Pay Stub
You're subject to Marion County (Indianapolis) local tax if:
- You live in Marion County (Indianapolis) (residents pay on all income)
You're not subject to Marion County (Indianapolis) local tax if you live and work outside the county, even if you're a Indiana resident.