Learn how to set up local tax withholding for your company and employees.
Local taxes are payroll taxes employees and/or employers must pay in several states. These are in addition to required State Withholding tax. They can be city, county, municipality or school district taxes.
States with local taxes
These states have local tax withholding: Alabama, Colorado, Delaware, Indiana, Kentucky, Maryland, Michigan, Missouri, New York, Ohio, Oregon, Pennsylvania and West Virginia. Not all cities in these states collect local taxes.
To get started setting up your local taxes, see the steps below and select your payroll plan.
|Note: Not sure which payroll service you have? Here's how to find which payroll service you have.|
Step 1: Determine which local taxes you and your employees are required to pay
To make sure you get the most accurate local tax jurisdictions, get the physical address for your employees’ home and work locations. If you aren’t sure what city, municipal, or school district taxes your employee should pay:
- Contact your local tax agency
- Use the local tax resources below
Here are some local tax resources and info
|All states with local taxes: |
AL, CO, DE, IN, KY, MD, MI, MO, NY, OH, OR, PA, WV
|Use the USPS Address and ZIP code locator to determine the best city/ZIP code combo. We recommend Cities by ZIP code.|
|Indiana||Indiana requires local taxes based on where the employee lived and worked on January 1 of the current year. |
Employees should complete Form WH-4.
|Maryland||Maryland local taxes are included when you set up State Withholding, so there’s nothing extra you need to do.|
|Ohio||Ohio local tax finder. Use the ZIP code link and enter the 4-digit ZIP code extension for employee’s residence and work locations to find the specific applicable local taxes. |
If you don’t know the 4-digit extension, use the USPS Address and ZIP code locator.
Note: School district taxes with 0.00% rate will not appear on the employee local tax setup.
|Oregon||TriMet transit tax|
Lane Transit District (LTD) tax
|Pennsylvania||Local Income Tax requirements for employers and link to employee residency certification form|
Find your PSD Code by address
Set up PA Local Services Tax (LST)