Indiana Withholding: Lake County Implements New Payroll Tax


Payroll Mate® software is helping Indiana employers comply with the new Lake County local income tax withholding requirements.

What the new tax means for employers:

Beginning in October 2013, Indiana employers and withholding agents should begin withholding a 1.5 percent local income tax on Lake County resident’s wage income. If the Lake County resident works in a different Indiana county, their employer should stop withholding tax for the other county and begin withholding for Lake County on October 1st, 2013.

Very Important Note for Employees:

Because the local tax did not become effective until October, a prorated rate of .375% resident rate (.0625% nonresident rate) will be used for figuring Lake County tax on the 2013 Indiana income tax returns.

How to Configure the New Tax inside Payroll Mate:

Please refer to this question on how to create local payroll tax. You need to follow the same steps with 2 changes: Make the rate 1.5 (or whatever rate the state sent you) and name the new tax “Lake County Local Tax”.


If you do not already use Payroll Mate you can download a free trial here.