A local tax refund is money your city or county returns to you after you overpaid local income tax during the year

Local tax refunds work the same way federal refunds do: if your employer withheld more local tax from your paychecks than you actually owed, the local tax authority sends the difference back to you. Not every state and city has a local income tax, so whether you get one depends on where you live and work. If you live in a place with local tax—cities like Philadelphia, New York City, Columbus, and Louisville all collect it—and you overpaid, a refund is coming to you.

The refund arrives separately from your federal refund and on its own timeline. Some local tax authorities process refunds in weeks; others take months. The amount depends on how much was withheld versus what you actually owed based on your income, deductions, and local tax rate.

Key Takeaways

  • Local tax refunds are issued by your city or county tax department, not the IRS, and only exist in places with local income tax.
  • You receive a local refund when your employer withheld more local tax from your paychecks than your actual local tax liability for the year.
  • Local refunds arrive on a separate schedule from federal refunds and processing times vary widely by jurisdiction.
  • You can track your local refund status through your city or county tax department's website or by calling their refund hotline.
  • If you moved during the year or worked in multiple cities, you may owe local tax to more than one jurisdiction and need to file multiple local returns.

Which cities and states actually collect local income tax

Local income tax is not uniform across the country. Only certain states allow cities and counties to collect it, and only certain cities within those states actually do. The states where local income tax exists are Ohio, Pennsylvania, Kentucky, Indiana, New York, Maryland, New Jersey, and the District of Columbia. Within those states, not every city participates—it depends on local ordinance.

The most well-known local tax cities are Philadelphia (Pennsylvania), New York City (New York), Columbus (Ohio), Cincinnati (Ohio), Louisville (Kentucky), and Baltimore (Maryland). If you live or work in one of these places, you almost certainly pay local income tax and may be due a refund. If you live in a state or city not listed here, you do not have a local income tax and will not receive a local refund.

How local tax withholding and refunds work

When you start a job in a city with local income tax, you fill out a local tax withholding form (similar to a W-4 for federal tax). Your employer then withholds a percentage of your gross pay and sends it to the local tax authority. At the end of the year, you file a local tax return showing your actual income and deductions. If the amount withheld was more than what you owe, the difference is refunded to you.

The withholding rate varies by city. Philadelphia's local tax rate is 3.8712% for residents; New York City's is 3.876% for residents; Columbus's is 2.5%. Your employer should withhold based on the rate in the city where you work, not necessarily where you live, though some cities tax residents on income earned anywhere. If you changed jobs, moved, or worked part of the year, your withholding may not match your actual liability, which is why you end up with a refund or owe more.

Where to check the status of your local refund

Each city and county tax department maintains its own refund tracking system. There is no single national database. You will need to contact the tax authority in the specific city where you filed. Most have a website with a refund status tool where you enter your Social Security number and the amount you expect to receive. Some also have a phone hotline.

For Philadelphia, go to the Department of Revenue website and use their refund status tool. For New York City, the Department of Finance has a refund status page. For Columbus, check the city's tax division website. For Cincinnati, Louisville, and Baltimore, search "[city name] local tax refund status" to find the correct department and tool. Have your Social Security number, filing status, and the tax year ready when you check.

How long local refunds take to arrive

Processing time depends entirely on the city. Some local tax authorities process refunds within four to six weeks of receiving your return; others take three to four months. A few process them even more slowly if they are understaffed or if your return requires manual review. Unlike the IRS, which publishes estimated processing times, most local tax departments do not give specific timelines—they say "allow 6 to 8 weeks" or similar language that is often optimistic.

If you filed electronically and your return was accepted without errors, you will typically be on the faster end. If you filed by mail or if your return was flagged for review (for example, because your income or deductions changed significantly), expect longer. The refund status tool will usually show you whether your return has been received and processed, which gives you a better sense of where you are in the queue than a generic timeline.

What to do if you worked in multiple cities during the year

If you worked in more than one city with local income tax during the same year, you may owe local tax to both cities and need to file separate returns. For example, if you worked in Philadelphia for six months and then moved to New York City for six months, you file a Philadelphia return for the income earned there and a New York City return for the income earned there. Each city taxes only the income earned within its jurisdiction.

Some cities offer credits to prevent double taxation if you paid local tax to another city. Philadelphia, for instance, allows a credit for local taxes paid to other jurisdictions. When you file, you report the income earned in each city on the correct return and claim any credits you are due. This is where mistakes happen—people forget to file in the second city or claim the wrong credit. If you are unsure whether you owe tax to multiple cities, contact the tax department in each city where you worked and ask.

Refund delays and what to do about them

If the refund status tool shows your return was received and processed but you have not received the money after the stated processing time, contact the tax department directly. Have your return confirmation number, filing date, and expected refund amount ready. Ask whether the refund was issued and, if so, whether it was mailed or deposited directly. If it was mailed, ask for the date it was sent so you know when to expect it.

If the refund was issued but you never received it, the tax department can issue a replacement check or reissue a direct deposit. This process usually takes another two to four weeks. If the return was never processed, ask what is holding it up—sometimes returns are flagged for verification of income or deductions, and the tax department needs additional documents from you. Respond to any requests quickly so your refund is not delayed further.

Frequently Asked Questions

Do I have to file a local tax return if I only worked part of the year?

Yes, if you earned income in a city with local income tax, you must file a local return for that city, even if you worked there for only a few weeks. The return covers only the income you earned in that city during the time you lived or worked there. If you overpaid, you will receive a refund.

Can I get a local refund if I moved out of state?

Yes. You file a local return for the city where you earned the income, regardless of where you live now. The refund will be mailed to the address you provide on the return or deposited to the bank account you list. Moving does not stop you from receiving a refund you are owed.

What if my local refund and federal refund are different amounts?

Local and federal tax are calculated separately using different rules and rates, so the amounts will almost always be different. Your federal refund is based on federal withholding and federal tax liability; your local refund is based on local withholding and local tax liability. Both are correct even if one is much larger than the other.

How do I change my local tax withholding if I am getting too large a refund?

Contact your employer's payroll department and ask for a new local tax withholding form for your city. Adjust the number of exemptions or the additional withholding amount to match your actual liability more closely. This will reduce the refund you receive next year but will give you more money in each paycheck now.

Can I claim a local refund on my federal return?

No. Local refunds are separate from federal taxes. However, if you paid local income tax during the year, you may be able to deduct it on your federal return as a state and local tax (SALT) deduction, subject to the current $10,000 annual limit. The refund itself does not affect your federal return.