Which Local Income Taxes Reach Retirement Income? Every Locality, Computed (2026)

Published 2026-10-07. Tax year 2026.

Do local income taxes apply to retirement income?

Mostly not. Of 4,398 local income-tax jurisdictions, a retired couple with $105,000 of Social Security, IRA, pension and interest income owes local tax in 287, all in systems whose base is broader than wages: Indiana county local income tax (LIT); Maryland county / Baltimore City income tax; Michigan city income tax (Uniform City Income Tax Ordinance); New York City resident income tax; Yonkers resident income tax surcharge and nonresident earnings tax; Ohio school district income tax. The earned-income taxes (in Delaware, Kentucky, Missouri, Ohio, Pennsylvania) tax wages, not retirement income. The highest local tax on that couple was $1,830 (Randolph, IN).

4,398 local income-tax jurisdictions in 11 states — every county, city, school district and municipality in the engine's local-tax registry — priced for three households. The question is which local taxes reach retirement income (Social Security, IRA withdrawals, pensions, interest), not wages. Most do not: the majority of local income taxes are earned-income taxes.

L1: Retired couple, 67: $40,000 Social Security, $30,000 IRA, $30,000 pension, $5,000 interest.

L2: Couple, 63, one still working: $40,000 wages, $20,000 IRA, $6,000 interest.

L3: Higher-income retired couple, 67: $50,000 Social Security, $150,000 IRA, $80,000 pension, $20,000 interest.

Which local taxes reach retirement income

The retired couple (L1) owes local tax in 287 of 4,396 jurisdictions, all of them in systems whose base is broader than earned income: Indiana county local income tax (LIT); Maryland county / Baltimore City income tax; Michigan city income tax (Uniform City Income Tax Ordinance); New York City resident income tax; Yonkers resident income tax surcharge and nonresident earnings tax; Ohio school district income tax. The earned-income systems — City of Wilmington earned income tax; Kentucky local occupational license tax; Kansas City and St. Louis earnings tax; Ohio municipal income tax; Pennsylvania local earned income tax (Act 32); Philadelphia Wage/Earnings and Net Profits Tax and School Income Tax — tax wages and self-employment earnings and none of the retired couple's income; the working couple owes local tax in 4,245 jurisdictions. Iowa school district income surtax reaches none of the retired households' income here, because the state's own retirement exclusions leave nothing for it to tax. Metro Supportive Housing Services personal income tax; Multnomah County Preschool for All personal income tax reach only the higher-income couple (L3): they start above an income threshold. In Michigan cities the retired couple's tax comes from the interest alone: the city tax exempts pensions and Social Security.

The highest local tax on the retired couple

2 jurisdictions are not computed (a rule the engine has no settled source for, such as Ohio municipalities that kept a grandfathered base); the data file gives the reason for each. Credits for local tax paid to another locality, and Philadelphia's School Income Tax on investment income, are not included.

How each local system reaches income

• Maryland county / Baltimore City income tax (Maryland): levied on the state's taxable income, so retirement income is taxed as far as the state itself taxes it. Source: Tax Guidance - Maryland Income Tax Rates and Brackets
• Indiana county local income tax (LIT) (Indiana): levied on the state's taxable income, so retirement income is taxed as far as the state itself taxes it. Source: Departmental Notice #1, Effective Oct. 1, 2026 (R47 / 10-26)
• New York City resident income tax (New York): the city's own rates on New York taxable income, after the state's retirement exclusions. Source: NY Tax Law § 1303. City taxable income
• Yonkers resident income tax surcharge and nonresident earnings tax (New York): a percentage of the state income tax. Source: Instructions for Form IT-2105, Estimated Income Tax Payment Voucher for Individuals (IT-2105-I, 2026)
• Iowa school district income surtax (Iowa): a percentage of the state income tax. Source: IA 1040 Expanded Instructions - Line 19: School District Surtax / Emergency Medical Services Tax (Instruction Year 2025)
• Ohio school district income tax (Ohio): by district: Ohio income less exemptions (the traditional base) or earned income only (the earned-income base). Source: Ohio Revised Code Section 5748.01 (page shows Effective: January 1, 2026)
• Ohio municipal income tax (Ohio): earned income only: wages and net self-employment earnings. Source: Ohio Revised Code Section 718.01 (page shows Effective: September 30, 2025)
• Pennsylvania local earned income tax (Act 32) (Pennsylvania): earned income only: wages and net self-employment earnings. Source: Local Tax Enabling Act, Act of Dec. 31, 1965, P.L. 1257, No. 511, Cl. 53 (as amended incl. Act 32 of 2008)
• Philadelphia Wage/Earnings and Net Profits Tax and School Income Tax (Pennsylvania): earned income only: wages and net self-employment earnings. Source: Wage Tax (employers)
• Michigan city income tax (Uniform City Income Tax Ordinance) (Michigan): income less pensions, annuities and Social Security, less personal exemptions. Source: City Income Tax Act, 1964 PA 284 (MCL 141.501 et seq., incl. Uniform City Income Tax Ordinance, MCL 141.601-141.699)
• Kentucky local occupational license tax (Kentucky): earned income only: wages and net self-employment earnings. Source: KRS 67.750
• Kansas City and St. Louis earnings tax (Missouri): earned income only: wages and net self-employment earnings. Source: RSMo 92.111
• Metro Supportive Housing Services personal income tax (Oregon): Oregon taxable income less public pensions, above a high income threshold. Source: Personal Income Tax Filing and Payment Information (Metro SHS and Multnomah County PFA)
• Multnomah County Preschool for All personal income tax (Oregon): Oregon taxable income less public pensions, above a high income threshold. Source: Preschool For All Personal Income Tax Code (Multnomah County Code ch. 11, §§11.500 et seq.; S-1 2023 supplement)
• City of Wilmington earned income tax (Delaware): earned income only: wages and net self-employment earnings. Source: Earned Income Tax Regulations of the City of Wilmington (Department of Finance, July 2020, revised 5/25/2023)

Price your state and local tax on your own income
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Related: Ten retiree households, 51 state tax bills · The states with no income tax

Download the data

Every row on this page, with its inputs: local-income-tax-on-retirement-income-2026.csv · local-income-tax-on-retirement-income-2026.json (CC0).

Questions

Does Pennsylvania local earned income tax apply to retirement income?

No. The Act 32 local earned income tax reaches wages and net profits; pensions, IRA withdrawals, Social Security and interest are not earned income.

Do Ohio school district income taxes apply to retirees?

Districts on the traditional base tax Ohio income less exemptions, which includes pension and IRA income; districts on the earned-income base do not reach it. Ohio municipal income taxes reach earned income only.

Is retirement income taxed by Maryland counties and Indiana counties?

Yes, to the extent the state taxes it: both county taxes are levied on the state taxable income, after the state's own retirement exclusions.

Do the Portland Metro and Multnomah County taxes apply to retirement income?

They apply to Oregon taxable income (less public pensions) above high thresholds, so they reach only higher-income retirees.

Sources and method

Every figure was computed by QuantCalc's open tax engines — federal 2.2.0 and state 1.14.1, the engines behind the federal and state tax APIs — for the 2026 tax year, and every row can be re-run through those APIs with the inputs in the data files. The engine documentation lists the official source of every rule; the rules this study leans on:

• Tax Guidance - Maryland Income Tax Rates and Brackets
• Departmental Notice #1, Effective Oct. 1, 2026 (R47 / 10-26)
• NY Tax Law § 1303. City taxable income
• Instructions for Form IT-2105, Estimated Income Tax Payment Voucher for Individuals (IT-2105-I, 2026)
• IA 1040 Expanded Instructions - Line 19: School District Surtax / Emergency Medical Services Tax (Instruction Year 2025)
• Ohio Revised Code Section 5748.01 (page shows Effective: January 1, 2026)
• Ohio Revised Code Section 718.01 (page shows Effective: September 30, 2025)
• Local Tax Enabling Act, Act of Dec. 31, 1965, P.L. 1257, No. 511, Cl. 53 (as amended incl. Act 32 of 2008)
• Wage Tax (employers)
• City Income Tax Act, 1964 PA 284 (MCL 141.501 et seq., incl. Uniform City Income Tax Ordinance, MCL 141.601-141.699)
• KRS 67.750
• RSMo 92.111
• Personal Income Tax Filing and Payment Information (Metro SHS and Multnomah County PFA)
• Preschool For All Personal Income Tax Code (Multnomah County Code ch. 11, §§11.500 et seq.; S-1 2023 supplement)
• Earned Income Tax Regulations of the City of Wilmington (Department of Finance, July 2020, revised 5/25/2023)

Federal tax uses the tax rate schedule (the IRS Tax Table, used on returns below $100,000 of taxable income, differs by a few dollars). Households are illustrations, not averages; each takes the standard deduction.

An estimate, not tax advice. These are computed examples for the 2026 tax year from QuantCalc's open tax engines. Your own return depends on facts these examples do not include. Check any decision with your tax preparer before acting.

@misc{quantcalc2026localincometaxonretirementincomeeverycou,
  title  = {Local Income Tax on Retirement Income: Every County, City and School District, 2026},
  author = {{QuantCalc Research}},
  year   = {2026},
  url    = {https://quantcalc.app/research/local-income-tax-on-retirement-income-2026/},
  note   = {Accessed <date>}
}