Indiana News

Lake County Residents Will See New Tax Later This Year

5/16/2013

Lake County residents who earn a paycheck or receive a pension or IRA check will begin seeing the new county option income tax deducted from their checks, beginning later this year.

Indiana Department of Revenue spokesman Bob Dittmer says the agency will soon begin work on a major education program in advance of the tax taking effect on October 1. Every other Indiana county except for Lake County has been dealing with a county income tax up until now, so most wage-earners' questions have already been answered.

Lake County officials enacted the maximum tax that can be levied, at 1.5%. Most of that is to go toward property tax relief, but Hammond and East Chicago tax rates are already at their maximum relief levels under current state "circuit breaker" rules. Dittmer says regular wages, pensions and IRA income will be affected by the new county income tax, but Social Security income will not.

Dittmer says Illinois residents who work in Lake County will pay a non-resident tax rate. The Indiana Department of Revenue has lots of information available online to answer questions about the county option income tax.

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