County Homestead/LIT 1% Credit

Porter County’s homestead credit has its roots in the 2005 legislation that established the Northwest Indiana Regional Development Authority. This legislation allowed Porter County to enact a county income tax that would be used for two specific purposes: To raise the revenue needed for the county’s membership in the RDA and to use the balance to fund a property tax cut for homeowners in the form of a homestead credit.

 As part of statewide changes in local income taxes in 2017, this credit is now known as the LIT 1% AV credit. The name refers to the fact that the credit is funded through LIT revenues and, in Porter County, it is applied only to homesteads, which are in the 1% tax cap category.

For tax bills payable in 2021, the credit rate is 11.1187%, an increase over the 10.7% rate in 2020.  Generally speaking, this means that homeowner tax bills will be reduced by 11 percent for the homestead portion of their tax (unless the Circuit Breaker tax credit cuts the bill further; see below).  

You can find out how much the homestead credit saved you on your tax bill by looking at line 4a on the statement that comes with your tax bill, the Treasurer’s Form TS to 1A. Below are some examples of the credit on homes assessed at $180,000 in select taxing districts in 2021. (These examples include the homestead and mortgage deductions).

Circuit Breaker Impact

The homestead credit is calculated on all homesteads. However, if a homestead’s tax exceeds the limit allowed by the Circuit Breaker, the tax bill is reduced to the maximum allowed. In the examples above, the tax bills for the Valparaiso and Portage homesteads were reduced further due to the tax caps.

Homestead Credit Rates

The homestead credit rate can change each year due in part to fluctuations in county income tax revenues. Below is a history of the homestead credit rates beginning in 2010.