local income tax
An income tax charged by a city or county on top of the state's.
A municipal or county levy on income, additional to state and federal.
What that means in practice
Only a handful of states allow it, but where it exists it is real money — often one to three percent of what you earn. It is usually charged where you work as well as where you live, so a commuter can face two claims on the same wages.
Local income taxes operate in a minority of states and are commonly levied on the basis of both residence and place of employment, producing overlapping claims mitigated — imperfectly — by resident credits. ⚠️ They are frequently omitted from interstate comparisons built on state rates alone, which understates burden in the affected jurisdictions.
Questions people ask
Who decides this — the federal government or my state?
Two governments, independently. The federal rule and your state's rule share a name and nothing else. So local income tax can mean one thing on your federal return and another on the state one.
Do I need to understand other terms before this one makes sense?
This one does not stand alone. Several related terms are linked below. local income tax is easier to hold once they are in place.
I have seen this called something else. Is it the same thing?
Same thing, different label. local income tax has more than one common name, and the page lists them precisely because searching the wrong one leads nowhere.
At which level of government is this determined?
Income tax concepts are defined independently at federal and state level. States may conform to the federal definition, conform selectively, or define their own; conformity is legislated and can be static (tied to a fixed date) or rolling. ⚠️ A federal change therefore propagates to some states automatically and to others only by subsequent state action.
What conceptual dependencies does this term carry?
This term has multiple conceptual dependencies, enumerated in the related-terms list. Definitions in tax law are frequently mutually referential — a provision's meaning depends on defined terms elsewhere in the code — so isolated reading commonly produces error.
What alternative designations refer to this concept?
This concept is referred to by multiple designations across statutory text, agency guidance, payroll documentation and common usage. The alternatives are enumerated on this page. ⚠️ Terminology divergence is a frequent source of error where a statutory term and its colloquial equivalent are not exactly co-extensive.