If you figured a county tax on your Indiana return and have to pay local taxes outside of Indiana, you may be able to take this credit.
This credit only applies if the taxes you paid was 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
Where to enter credit within the program?
To take this credit within your account, follow the steps below:
- State Section
- Credit for Local Taxes Paid Outside of Indiana
For more information on this credit, please click here.