Instructions For Form Es-40 - Estimated Tax Payment Form - 2016 Page 4
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5Departmental Notice #1
Effective Jan. 1, 2016
(R26 / 12-15)
IMPORTANT NOTICE: The rates in this notice are effective for withholding purposes for periods beginning on or after Jan. 1, 2016.
How to Compute Withholding for State and County Income Tax
This document does not meet the definition of a “statement” required to be published in the Indiana Register under IC 4-22-7-7. The purpose of this document
is to assist withholding agents in determining the correct amount of Indiana county income tax to withhold from an employee’s wages by providing the tax rate
for each county. A county name that is in bold and underlined has adopted a new county income tax. An asterisk (*) beside a county name indicates that there has
been a change to the rate(s) during 2016. The rates given in this document apply to wages paid after Dec. 31, 2015, and the tax is withheld and paid at the same
time and in the same manner as the state income tax is paid.
Both the county of residence and the county of principal employment of an individual are determined on January 1 of the calendar year in which the individual’s
taxable year commences. An individual cannot be subject to both a resident rate and a nonresident rate at the same time. If a person resides in an adopting county
on January 1, he or she is subject to that county’s resident rate. If a person resides out-of-state on January 1, but works in an Indiana county as of January 1, he or
she is subject to the nonresident rate corresponding to his or her Indiana county of principal employment.
The deduction constant tables have been developed to help calculate state and county income tax. These tables divide the dollar amount of the exemption/de-
pendent exemption by the number of pay periods. This will determine the deduction constant or the dollar amount of the exemption you should deduct each pay
period from the employee’s gross income.
Table A is used to figure personal exemptions. Each employee is entitled to deduct $1,000 per year per exemption claimed on line 5 of his/her Form WH-4 (Revised
8-08). Personal exemptions include additional exemptions if you or your spouse are age 65 or older and/or blind. The WH-4 is available at
Table B is used to figure dependent exemptions. Most employees are entitled to deduct $1,500 per year per qualifying dependent exemption claimed on line 6 of
his/her Form WH-4 (Revised 8-08).
Deduction Constant Tables
Table A
Daily
Weekly
Bi-Weekly
Semi-Monthly
Monthly
1
2.74
19.23
38.46
41.67
83.33
2
5.48
38.46
76.92
83.33
166.67
3
8.22
57.69
115.38
125.00
250.00
4
10.96
76.92
153.85
166.67
333.33
5
13.70
96.15
192.31
208.33
416.67
6
16.44
115.38
230.77
250.00
500.00
Table B
Daily
Weekly
Bi-Weekly
Semi-Monthly
Monthly
1
4.11
28.85
57.69
62.50
125.00
2
8.22
57.69
115.38
125.00
250.00
3
12.33
86.54
173.08
187.50
375.00
4
16.44
115.38
230.77
250.00
500.00
5
20.55
144.23
288.46
312.50
625.00
Locate the deduction constant for the personal exemptions in Table A. Add to
Deduction Constant Amount from Table A
$96.15
that the deduction constant for the dependent exemptions in Table B. This is
Deduction Constant Amount from Table B
+86.54
the net amount that should be deducted each pay period from the employee’s
Total Deduction Constant
$182.69
gross income.
Gross Income
$800.00
Example: An employee is paid a weekly salary of $800, he/she claims 5 personal
Total Deduction Constant
-182.69
exemptions and is subject to county tax at the rate of .0125. He/she claims 3
Taxable Income
$617.31
dependent exemptions. The taxable income of $617.31 is the amount on which
state and county tax should be calculated.
State Tax to Withhold
$617.31 x .033 = $20.37
County Tax to Withhold
$617.31 x .0125=$7.72
If you have any questions about the withholding of state or county taxes, please
contact the department at (317) 233-4016.
Note: Income Tax Information Bulletins which may be of assistance with
___________________________
withholding tax questions are numbers 16, 32, 33 and 52. You may find them
at
Andrew Kossack
Commissioner
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