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Withholding by Partnerships and Small

Employers have three registration options available to

However, if Form WH-4 shows an employee was a

Publication WH-13

Revised 9/03

Business Corporations

them. Options one and two involve filling out paper

resident of a county not listed in the bulletin, then the

Every partnership and small business corporation is

registration applications, while the third option allows

employer must look at the county of principal

Withholding Instructions for Indiana

required to withhold Indiana adjusted gross income tax

you to file using the Internet. There is no registration

employment. If the employee's Indiana county of

State and County Income Taxes

on amounts paid or credited to its nonresident partners

These instructions are to be used in conjunction with

fee for a withholding account. The first option is to

principal employment is listed in the bulletin, then the

or shareholders. This is true regardless of reciprocal

Indiana Departmental Notice #1 (DN #1). This and

fill out the Indiana Department of Revenue Business

employer has to withhold county tax on payments made

agreements between Indiana and the partner's or

other income tax bulletins are available free of charge.

Tax Application, Form BT-1 and mail it to the

to the employee using the nonresident tax rate from

shareholder's resident state. If their county of principal

See page 8 for details on obtaining documents. The

Department. (See Need a BT-1 Form on page 8 for more

Column B.

employment on January 1 is shown on DN #1, then

TaxFax retrieval code for Departmental Notice #1 is

information.) Processing of the BT-1 application takes

If both the county of residence and the county of

county income tax must also be withheld.

61322.; or, you may obtain DN #1 by visiting our web

approximately six weeks.

principal employment from Form WH-4 are not listed

site:

Withholding by Trusts and Estates

The second option is for a responsible officer of the

in the bulletin (i.e., Indiana counties that have not

Withholding of state income tax is required by trusts

corporation to visit any of the Department of Revenue's

adopted a county tax or counties located outside

Definition and Liability of Withholding Agent

and estates when Indiana income (except income from

offices located throughout the state to be registered

Indiana), then the employer will not withhold any

Employers making payments of salaries, wages, tips,

interest or dividends) is distributed to a nonresident

while they wait.

county tax for that employee.

fees, bonuses, and commissions that are subject to

beneficiary. State withholding is based on the income

Indiana state and/or county taxes, and who are required

amount at the rate of 3.4%.

The county of residence and the county of principal

The third option is to register online at:

by the Internal Revenue Code to withhold federal

employment are fixed on January 1st of each year.

https://secure.in.gov/apps/dor/bt1/

income tax on those types of payments, are considered

Therefore, if an employee moves to a different county

This method takes approximately two business days.

For more information regarding Indiana Withholding

to be withholding agents.

or changes the county of employment during the year,

Tax contact the Department at:

Use of State Form WH-4

the county withholding requirements will not change

All employees of Indiana employers are required to

To determine if you need to withhold Indiana state and/

until January 1st of the next year.

Indiana Department of Revenue

complete and file Form WH-4, Employee's Withholding

or county taxes from your employees’ earnings, you

Taxpayer Services Division

Employees Who Are Not Residents of Indiana

Exemption and County Status Certificate. The

must first contact the Internal Revenue Service (IRS).

Indiana Government Center North

Indiana employers must withhold Indiana state tax from

information included on this certificate tells the

If the IRS determines you are required to withhold

Indianapolis, IN 46204-2253

employees who work in Indiana but are not residents

employer the number of exemptions each employee is

federal taxes from the salaries, wages, tips, fees,

(317) 233-4016

of Indiana. The only exception would be when an

claiming and for which county (if any) county tax is to

bonuses, and/or commissions paid to your employees,

employee is a resident of a state that has entered into a

be withheld. The employer should keep this certificate

then you are also required to withhold Indiana state

reciprocal agreement with Indiana (see below). Also,

with his records for verification purposes. Employees

and/or county taxes.

county income tax at the nonresident rate must be

should update their WH-4 by January 1 of the following

As a withholding agent you are responsible for

withheld on a nonresident employee if his county of

year if their county of residence or county of principal

Need a BT-1 form?

withholding Indiana state and county income taxes from

principal employment is listed in DN #1.

employment changes. Employees should also update

You may obtain a BT-1 form by visiting our web site:

payments you make to your employees. This

their WH-4 at the time their exemption total changes.

Reciprocal Agreements

withholding tax must be paid to the Department by the

Residents of Kentucky, Michigan, Ohio, Pennsylvania,

How to Figure State and County Income Tax

due date. If you do not file a return and/or pay the proper

You can have it faxed by calling our TaxFax line at:

and Wisconsin who earn wages, salaries, tips, and

DN #1 shows how to figure the amount of state and

amount of tax withheld by the due date, penalty and

(317) 233-2329 and requesting #5000. Or you may call

commission income in Indiana are exempt from Indiana

county income tax to be withheld from your employees'

interest will be due. An employer, officer, or partner

the Form Order Line at: (317) 615-2581, and request

earnings every pay period. It also lists the Indiana

state income tax because Indiana has a reciprocal

may be personally subject to criminal prosecution if

the form be mailed to you.

agreement with these states. Form WH-47, Certificate

counties that have adopted a local income tax along

failure to pay and/or file a withholding return is due to

of Residence, should be completed by residents of these

with the resident and nonresident tax rates. This bulletin

fraud or tax evasion.

Need Tax Bulletins or Forms?

states working for Indiana employers. This certificate

is revised annually in June and will automatically be

You can obtain either Indiana income tax bulletins or

Registration of New Withholding Agents

is an affidavit showing the employee's state of legal

sent to all registered withholding agents.

tax forms by calling the forms order line at (317) 615-

New employers are required to register as Indiana

residence and provides proof that no withholding of

2581;or visit our web site at:

County income tax will be withheld at either the resident

withholding agents and to obtain an Indiana Taxpayer

Indiana state income tax is required. The employer

or nonresident tax rate (never both). If Form WH-4

Identification Number (TID). The TID number is an

should keep Form WH-47 for his records and not send

If you have a access to a fax machine, you may call the

shows that an employee was a resident of an Indiana

Indiana identification number exclusive to each

it to the Department. NOTE: Reciprocal agreements

Indiana TaxFax System at (317) 233-2FAX(2329) to

county that is listed in the bulletin, then the employer

taxpayer and their location(s).

do not affect county taxation. The employer must

have forms or bulletins faxed to you.

must withhold county tax on payments made to the

withhold county tax if the county of principal

employee using the resident tax rate from Column A.

employment of the nonresident employee is listed in

DN #1.

Form Wh-13 - Withholding Instructions For Indiana State And County Income Taxes - Indiana Department Of Revenue Page 2

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