How do I take the Credit for Local Taxes Paid Outside of Indiana-Offset Credits?

If you have county tax on your Indiana return and must pay local taxes outside of Indiana, you may be able to take this credit. 

This credit only applies if the taxes you paid were paid to a city or locality outside of Indiana and you were not refunded the tax or given a credit.

The credit can be used to reduce your Indiana county tax if it is the County Adjusted Gross Income Tax or the County Option Income Tax. It cannot be used to reduce any County Economic Development Income Tax. 

Remember, you can use this credit only if you have both:

• A county tax amount on Form IT-40, line 9, and
• A local income tax that you had to pay outside Indiana

Program Entry 

To take this credit within your account, follow the steps below:

1. State
2. Edit Indiana state return
3. Credits
4. Credit for Local Taxes Paid Outside of Indiana

For more information on this credit, please click here.