Withholding Taxes: Indiana

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Stuart R. Buttrick and Tareen Zafrullah, Faegre Drinker Biddle & Reath LLP

Summary

• Generally, an employee is subject to income tax withholding in Indiana if they work in Indiana. Indiana has reciprocal withholding agreements in place with several states. Withholding exemptions apply to certain short-term-service and disaster response employees. See Withholding on Residents, Nonresidents and Expatriates.
• Indiana employers must maintain a Form WH-4, Employee's Withholding Exemption and County Status Certificate, for each employee working in Indiana. See Employee Withholding Form.
• Employers must withhold on supplemental wages, such as bonuses, at a flat rate. See Supplemental Wages.
• Indiana employers must provide federal Form W-2, Wage and Tax Statement, to each employee annually by January 31. See Form W-2 Requirements.
• Indiana employers must keep records of all documents needed to determine tax liability for a certain number of years. See Recordkeeping Requirements.
• Indiana has requirements pertaining to a Local Income Tax. See Local Requirements.