What Is the Monroe County, Indiana Income Tax Rate?

The Monroe County, Indiana income tax rate is 1.623% for 2026. It sits on top of Indiana’s 2.95% state individual income tax, bringing the combined rate for Monroe County residents to 4.573%.¹ Every Indiana county sets its own local rate under Indiana Code Article 6-3.6, and Monroe County’s funds local services including roads, public safety, and community programs.²

How the Rate Applies to Your Income

The 1.623% applies to your Indiana adjusted gross income after state-authorized exemptions. You don’t file a separate county return. The state and county taxes are collected together through employer withholding or estimated payments and reported on the same Indiana income tax return.

Indiana’s state rate has been declining on a scheduled basis. It is 2.95% for 2026 and drops to 2.90% in 2027.¹ The Monroe County rate is set locally and is not tied to that schedule.

Who Owes the Monroe County Rate

Indiana locks your county tax to where you lived on January 1 of the tax year. If you were a Monroe County resident on that date, you owe 1.623% for the full year, even if you move elsewhere in February or July. The reverse also holds: someone who moves into Monroe County on January 2 keeps paying their old county’s rate until the next January 1 snapshot.³

There is no proration. A move planned around the turn of the year can meaningfully change your local tax bill if the two county rates differ.

If You Live in Monroe County and Work Elsewhere in Indiana

You still pay Monroe County’s 1.623%. Indiana ties local tax to residence, not workplace, which prevents double taxation when you commute across county lines.³

If You Live Out of State and Work in Monroe County

If your principal place of business or employment is in Monroe County on January 1 and you live outside Indiana, the 1.623% applies to the income you earn at that Monroe County workplace, not to your entire adjusted gross income.⁴ Reciprocal tax agreements between Indiana and neighboring states do not eliminate this local obligation.

Filing: Forms and the County Code

During the year, your employer handles county withholding based on Form WH-4, Indiana’s Employee’s Withholding Exemption and County Status Certificate. You complete it when you start a job or change your situation, and it tells your employer which county rate to withhold.⁵ Listing the wrong county means the wrong rate is withheld all year.

At tax time, full-year Indiana residents file Form IT-40. Part-year residents and nonresidents with Indiana income file Form IT-40PNR and attach Schedule CT-40PNR, which calculates county tax on the income tied to Indiana work or residency.⁶

Enter Monroe County’s code of 84 on your return. Calculate the county tax by multiplying your Indiana adjusted gross income by 1.623%. An incorrect code sends your money to the wrong county and takes time to unwind.

Estimated Payments If You Have Untaxed Income

If you’re self-employed or have significant income without withholding, you probably owe quarterly estimated payments covering both state and county tax. The threshold is expecting to owe $1,000 or more in combined state and county tax after any withholding and credits.⁷

For 2026, calendar-year quarterly due dates are:

April 15, 2026
June 15, 2026
September 15, 2026
January 15, 2027

Each installment should cover roughly a quarter of your expected annual liability. Underpaying any single installment triggers a 10% penalty on that period’s underpayment, and the penalty applies per installment.¹

Deadline, Extensions, and Penalties

Your Indiana return for 2025, including the Monroe County portion, is due April 15, 2026. County tax is not filed or paid separately.

If you need more time, Indiana piggybacks on the federal extension. Filing a valid federal extension (Form 4868) and paying at least 90% of your combined state and county tax by April 15 automatically extends your Indiana filing deadline, with no separate state form required. Indiana gives you one month beyond the federal extension period, so a federal October 15 deadline becomes a November 15 Indiana deadline.⁸

An extension buys time to file, not time to pay. Interest accrues on any unpaid balance from April 15 regardless. If your remaining balance when you file is 10% or less of your total tax liability and you pay it in full at that point, you avoid the late filing penalty.⁸

Indiana’s penalties on combined state and county tax:

Late payment: 10% of the unpaid tax, or $5, whichever is greater.
Failure to file: 20% of the tax owed if the Department of Revenue has to prepare your return.
Estimated tax underpayment: 10% of the underpayment for each quarterly period you fell short.
Fraud: 100% of the tax owed for a fraudulent return or deliberate failure to file.

The Monroe County portion of your bill is not exempt from any of these.¹

How to File and Pay

The simplest route is INTIME, Indiana’s online taxpayer portal. You can file your return, pay state and county tax in one transaction, and check your account.⁹

Paper filing is still available. Mail your return with a check or money order payable to the Indiana Department of Revenue to the address in the form instructions, and write your Social Security number on the payment. Electronic returns generally process within about three weeks; paper returns can take up to 12 weeks.¹⁰

1
Indiana Department of Revenue. Rates, Fees and Penalties
2
Indiana General Assembly. Indiana Code Title 6 Article 3.6 Chapter 6 Section 6-3.6-6-2-b – Rate of Tax
3
Indiana General Assembly. Indiana Code Title 6 Article 3.6 Chapter 8 Section 6-3.6-8-3 – County Residency and Place of Business
4
Legal Information Institute. 45 IAC 3.1-4-8 – Determination of County of Principal Place of Business or Employment
5
Indiana Department of Revenue. Withholding Tax Forms
6
Indiana Department of Revenue. Current Year Individual Tax Forms
7
Indiana Department of Revenue. Estimated Payments
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Indiana Department of Revenue. Instructions for Obtaining Extensions of Time to File Indiana Individual Income Tax Returns
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Indiana Department of Revenue. Indiana Department of Revenue – INTIME
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Indiana Department of Revenue. Check the Status of Your Refund