Lafayette local tax guide
Who pays Lafayette's local tax
Tippecanoe County residents pay 1.28% on their full Indiana income whether they work at Purdue, the Subaru plant, or a remote job for a company in another state. Commuters who live in Carroll, White, Clinton, or Montgomery County pay their own county's rate. Someone who lived outside Indiana on January 1 but already had their main job in Tippecanoe County that day owes the 1.28% rate on wages earned here. If you neither lived nor worked in Indiana on January 1, no county tax applies until the following year.
Tippecanoe County's 1.28% tax
Lafayette, a city of about 70,000, and West Lafayette across the Wabash River have no municipal income taxes. Both sit in Tippecanoe County, whose flat 1.28% Local Income Tax applies to the same Indiana adjusted gross income the state taxes.
That rate is near the bottom of the Indiana cities on this site. Only Evansville's Vanderburgh County, at 1.25%, is lower, and the two differ by about $22 a year at $75,000.
Worked example: $75,000 in Lafayette
A single filer earning $75,000 pays $7,670 in federal income tax, $4,650 in Social Security, $1,088 in Medicare, and $2,183 in Indiana tax. Tippecanoe County adds $947, and annual take-home is $58,462, about $4,872 a month.
That is $947 less than the $59,409 the same worker would keep with no county tax. Raise the salary to $100,000 and Tippecanoe's cut becomes $1,267, with $74,992 left.
Commuters and the surrounding counties
Because Indiana residents pay where they live, the Tippecanoe rate matters most to people deciding where to settle. Neighboring counties set their own rates, and Carroll County raised its rate for 2026, so a commute from Delphi can carry a higher local tax than living in Lafayette.
A Lafayette resident pays $637 less at $75,000 than a Bloomington resident and $548 less than one in Indianapolis. See the Bloomington calculator and the Indianapolis calculator for those cities.
Withholding and filing
List your county of residence and county of principal employment as of January 1 on Form WH-4. Graduate students and new faculty who move in from another state should mark those lines not applicable for the first year, then submit a new WH-4 so Tippecanoe tax starts the next January. County tax is calculated on the IT-40 along with your state tax.
Tips for Lafayette paychecks
Check the rate of the county you live in
Working at Purdue or Subaru does not set your rate. Your home county on January 1 does, so compare before choosing between Lafayette and a rural neighbor.
New arrivals: refresh WH-4 in January
If you moved here after January 1 from out of state, your first year has no county tax. A new WH-4 makes sure Tippecanoe withholding begins on time the following year.
Use the 403(b)
Pre-tax contributions to university retirement plans lower Indiana adjusted gross income and therefore the 1.28% county tax.