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For a resident of a county that has an income tax the county of residence is used in section 1. That is, you will use code 71 for st. joseph resident rate .008 (from http://www.in.gov/dor/reference/files/08-county-rates.pdf )
If you did not live in a county with an income tax you would use the county that you worked that was your principal place of employment. From the instructions: If you had more than one job on Jan. 1, your principal place of employment is the job where you worked the most hours and earned the most income. In section 2 of the CT-40 you would use whichever job that was your principal place of employment.
Residents use the tax rate for their county of residence regardless of where they worked unless their county of residence has no income tax.
I hope this helps. Please ask if you need more information.