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What is Local Income Tax?

Local taxes are levied by a government body for the proper functioning of public services including education, garbage collection, and sewer maintenance. 

Property taxes, payroll taxes, sales taxes, and license fees are just a few examples of the various forms that local taxes can take.

Some municipal governments charge residents and employees in a certain area with local income taxes. 

There is a local income tax in addition to federal, state, and local income taxes. Only in states with a state income tax do municipalities have the authority to impose local income taxes.

What is the Amount of Local Tax Deducted from the Paycheck?

On salaries that you receive inside the boundaries of a city, county, or school district, local income tax may be a  part of deductions.

Your combined, total deduction for state and local income, sales, and property taxes is only $10,000 ($5,000 if you’re married and filing separately).

Local Income Tax Rate by ZIP Code

Six zip codes in Manhattan account for $12.3 billion in income tax receipts, with the Upper East Side’s 10021 ZIP code accounting for the biggest sum ($2.85 billion).

The remaining ZIP codes, their localities, and the total amount of income tax collected are listed below:

  1. 10023 (UWS from 60th street to 75th street)  $2.14 billion.
  2. 10128 (UES from 86th Street to 96th Street) $1.88 billion.
  3. 10022 (East 50s) $1.85 billion.
  4. 10024 (UWS from 76th street to 91st street) $1.81 billion.
  5. 10028 (UES from 81st street to 86th street) $1.81 billion.

Also, See: Medicare Tax

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