The Johnson County, Indiana income tax rate is 1.4% for 2026. It applies to your Indiana adjusted gross income and sits on top of the state’s 2.95% income tax, for a combined state and county rate of 4.35%. Both are withheld from your paychecks if your employer has the correct county on file.1Indiana Department of Revenue. How to Compute Withholding for State and County Income Tax
The rate is flat. Every dollar of taxable income is taxed at the same 0.014, no brackets. Johnson County’s code on Indiana tax forms is 41. Indiana authorizes counties to adopt local income taxes under IC 6-3.6, and most counties are capped at a combined 2.5% across all local tax categories.2Indiana Department of Revenue. Income Tax Information Bulletin 32
On $60,000 of Indiana adjusted gross income, the combined 4.35% works out to roughly $2,610 in state and county tax before credits. The Department of Revenue republishes the withholding tables each January, so checking that document is the reliable way to catch any rate change for the new year.1Indiana Department of Revenue. How to Compute Withholding for State and County Income Tax
Who Owes the Johnson County Rate
Your county for local income tax purposes is wherever you lived on January 1 of the tax year. If you were a Johnson County resident on January 1, you owe the 1.4% for the entire year, even if you move in February. The same January 1 snapshot applies to your county of principal employment.1Indiana Department of Revenue. How to Compute Withholding for State and County Income Tax
Indiana taxes based on where you live, not where your employer is located. Live in Johnson County and commute to work in Marion County? You pay the Johnson County rate. Two counties never claim the same income.
Working in Another State
Indiana extends reciprocity to any state that provides similar treatment to Indiana residents. If your work state has a reciprocity arrangement with Indiana, that state’s employer should not withhold its income tax from your pay, and you pay only Indiana state tax and the Johnson County local tax. If the work state does not have reciprocity, you may owe tax to both states, though Indiana generally allows a credit for taxes paid to the other state.2Indiana Department of Revenue. Income Tax Information Bulletin 32
How to Calculate What You Owe
The county tax base is your Indiana adjusted gross income, not your federal figure. Indiana starts with federal adjusted gross income and applies state modifications, including a subtraction of $1,000 for you, $1,000 for a spouse, and $1,500 for each qualifying dependent. A first-year adoption allows $3,000 per child instead of $1,500.3Indiana General Assembly. Indiana Code 6-3-1-3.5 Adjusted Gross Income
Once you have that number, multiply by 0.014. That is your Johnson County tax for the year. If your Indiana adjusted gross income is $55,000, your county tax is $770. Compare that to what your employer withheld. If $800 was withheld, you get $30 back. If only $700 was withheld, you owe another $70 at filing.
Withholding: Form WH-4
When you start a job or move to a different county, file a new Form WH-4 with your employer. This form tells payroll which county rate to withhold and how many exemptions to apply. If you change your county of residence, you must file an updated WH-4 by January 1 of the following year so withholding adjusts for the new tax year.4Legal Information Institute. 45 IAC 3.1-1-102 Changes in Form WH-4
This is where most withholding errors begin. Someone moves mid-year, forgets to update the WH-4, and payroll keeps withholding for the old county until the mismatch surfaces at filing time.
Reporting It on Your Indiana Return
Johnson County income tax is reported as part of your annual Indiana return. Full-year residents file Form IT-40 with Schedule CT-40 attached. On the schedule, enter county code 41 and apply the 1.4% rate. If both you and your spouse lived in Johnson County on January 1, enter your combined Indiana adjusted gross income in a single column. If each spouse lived in a different county on January 1, the schedule splits the income between two columns so each county’s rate applies to the correct portion.5Indiana Department of Revenue. Schedule CT-40
You can pay any remaining balance through the Department of Revenue’s online portal (INtax) or by mailing a check with your return. Overpayments reduce your total state liability or generate a refund.
Quarterly Payments if You’re Self-Employed
If you are self-employed, freelance, or receive significant income without withholding, Indiana requires quarterly estimated tax payments when you expect to owe $1,000 or more in combined state and county tax for the year. Those payments cover both the 2.95% state tax and the 1.4% Johnson County tax together.6Indiana Department of Revenue. Estimated Payments
The quarterly due dates are April 15, June 15, September 15, and January 15 of the following year. To avoid an underpayment penalty, your total payments and credits must equal at least 90% of your current-year liability, or 100% of last year’s total tax (110% if your federal adjusted gross income exceeds $150,000). Indiana assesses a 10% penalty on any underpaid installment.6Indiana Department of Revenue. Estimated Payments
Penalties and Extensions
Indiana charges a penalty of 10% of unpaid tax (or $5, whichever is greater) for failure to pay by the filing deadline, and interest accrues on the unpaid balance.7Indiana Department of Revenue. Rates Fees and Penalties
An extension gives you until October 15 to submit the completed return, but it does not extend the deadline to pay. If you expect to owe, estimate the amount and send it in by April 15. The extension buys time for paperwork, not for the check.