What are local taxes?

Local taxes are simply taxes that come from a city, county, or other municipality. In some states, these taxes need to be processed along with other payroll taxes. The places most commonly associated with local taxes are Ohio and Pennsylvania, though many other states have them as well.

Generally, companies are only required to withhold local taxes for a county where a work site (like an office) is located. If an employee lives in a different county than where they work, you may choose to courtesy withhold local residential taxes for them. More often than not, you’ll need to register with your local agency to get your hands on the necessary information.

If you think you have an employee that has taxable wages for a local tax, be sure to confirm that person’s tax liability with your local agency based on their current work and home address. Local tax jurisdictions can get tricky, so it’s better safe than sorry.

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