Quick Answer
Over 4,900 U.S. jurisdictions impose local income taxes, with rates typically ranging from 0.5% to 4%. Major cities include New York City (3.876%), Philadelphia (3.8712%), Detroit (2.4%), Columbus (2.5%), and St. Louis (1%). These taxes are automatically withheld from W-2 paychecks if you work in the taxing jurisdiction.
Best Answer
Sarah Chen, Payroll Tax Analyst
W-2 employees who want to understand what local taxes might be taken from their paycheck
Which cities and counties impose local income taxes?
Over 4,900 jurisdictions across the United States impose local income taxes, with rates typically ranging from 0.5% to 4% of your income. These taxes are separate from federal and state income taxes and can significantly impact your take-home pay.
The highest concentration of local income taxes is found in:
Example: How local taxes affect your paycheck
Let's say you earn $60,000 annually and work in Columbus, Ohio (2.5% local income tax):
If you moved to Cincinnati (2.1%), your local tax would drop to $1,260 annually — saving you $240 per year.
Major cities with local income taxes
How local income tax withholding works
For W-2 employees, local income taxes are automatically withheld from your paycheck if:
Some jurisdictions tax based on where you work, others on where you live, and some tax both (with credits to avoid double taxation).
Key factors that determine your local tax liability
What you should do
Check your pay stub for local tax withholdings and verify the rates are correct. If you're considering a job change or move, factor local taxes into your total compensation analysis. Use our paycheck calculator to see exactly how local taxes will affect your take-home pay in different cities.
Key takeaway: Local income taxes can reduce your paycheck by $50-200+ per month depending on your income and location, with over 4,900 U.S. jurisdictions imposing these taxes.
*Sources: [IRS Publication 15](https://www.irs.gov/pub/irs-pdf/p15.pdf), Municipal tax records*
Key Takeaway: Over 4,900 U.S. jurisdictions impose local income taxes ranging from 0.5% to 4%, which can cost you $600-2,300+ annually on a $60,000 salary.
Local income tax rates in major U.S. cities
| City | Tax Rate | Annual Tax on $60K | Monthly Paycheck Impact |
|---|---|---|---|
| New York City, NY | 3.876% | $2,326 | $194 |
| Philadelphia, PA | 3.8712% | $2,323 | $194 |
| Detroit, MI | 2.4% | $1,440 | $120 |
| Columbus, OH | 2.5% | $1,500 | $125 |
| Cleveland, OH | 2.5% | $1,500 | $125 |
| St. Louis, MO | 1% | $600 | $50 |
| Kansas City, MO | 1% | $600 | $50 |
| Louisville, KY | 2.2% | $1,320 | $110 |
More Perspectives
Sarah Chen, Payroll Tax Analyst
People who moved to a new city or state and need to understand their new local tax obligations
What happens to local taxes when you move?
When you move to a new city or state, your local income tax obligations can change immediately — sometimes resulting in unexpected tax bills or refunds.
Key timing rules for movers
Work location changes: If you start working in a new city with local income tax, withholding typically begins with your first paycheck in that location. For example, if you move from Austin (no local income tax) to Columbus, OH (2.5%), your employer will start withholding Columbus tax immediately.
Residency changes: Some jurisdictions tax based on residency, with proration based on the number of days you lived there. If you moved to Baltimore on July 1st, you'd owe Baltimore local tax for the last 6 months of the year.
Common moving scenarios and tax implications
Scenario 1 - No local tax to local tax:
Moving from a no-tax area to Philadelphia means an immediate 3.8712% reduction in take-home pay. On a $70,000 salary, that's $2,710 annually or $208 less per month.
Scenario 2 - Local tax to no local tax:
Moving from Detroit (2.4%) to Nashville means more take-home pay. You'll need to file a part-year return in Michigan and may be due a refund if you overpaid.
Scenario 3 - City to city with different rates:
Moving from St. Louis (1%) to Louisville (2.2%) means your local tax burden increases by 1.2% of your income.
What you need to do after moving
1. Update your W-4 immediately if your work location changed
2. Notify payroll of your new work address
3. Research reciprocal agreements between your old and new locations
4. File part-year returns in both jurisdictions if required
5. Keep moving receipts — moving expenses may be deductible in some situations
Don't assume local taxes will automatically adjust — verify your pay stub shows the correct withholding for your new location.
Key takeaway: Moving can immediately change your local tax obligations, potentially affecting your paycheck by hundreds of dollars per month depending on the tax rates in your old versus new location.
Key Takeaway: Moving between cities with different local tax rates can immediately impact your paycheck by hundreds per month, requiring immediate W-4 updates and potential part-year tax filings.
Sources
- IRS Publication 15 — Employer's Tax Guide - Federal Income Tax Withholding
- Tax Foundation Local Income Tax Report — Comprehensive analysis of local income tax jurisdictions
Related Questions
Reviewed by Sarah Chen, Payroll Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.