Indiana Local Payroll Tax Changes Take Effect

Author: Rena Pirsos, XpertHR Legal Editor

Implementation Date: January 1, 2017

The nonresident local income tax rate and the structure of the local income tax rates are reformed effective January 1, 2017. Under legislation enacted in 2015 and subsequent guidance from the Department of Revenue, the three county income taxes (CAGIT, COIT and CEDIT) are combined into a single Local Income Tax (LIT), so that only one LIT rate applies for both residents and nonresidents.