§ 6-3-4-8 — Income withholding; wages; reports; penalties

Indiana § 6-3-4-8

• Jurisdiction: Indiana
• Art. 3: STATE INCOME TAXES
• Ch. 4: Returns and Remittances

Text

(a) Except as provided in IC 6-3-2-27.5 and
subsection (d), every employer making payments of wages subject to
tax under this article, regardless of the place where such payment is
made, who is required under the provisions of the Internal Revenue
Code to withhold, collect, and pay over income tax on wages paid by
such employer to such employee, shall, at the time of payment of such
wages, deduct and retain therefrom the amount prescribed in
withholding instructions issued by the department. The department
shall base its withholding instructions on the adjusted gross income tax
rate for persons, on the total local income tax rate that the taxpayer is
subject to under IC 6-3.6, and on the total amount of exclusions the
taxpayer is entitled to under IC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4).
However, the withholding instructions on the adjusted gross income of
a nonresident alien (as defined in Section 7701 of the Internal Revenue
Code) are to be based on applying not more than one (1) withholding
exclusion, regardless of the total number of exclusions that IC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4) permit the taxpayer to apply on
the taxpayer's final return for the taxable year. Such employer making
payments of any wages:
(1) shall be liable to the state of Indiana for the payment of the tax
required to be deducted and withheld under this section and shall
not be liable to any individual for the amount deducted from the
individual's wages and paid over in compliance or intended
compliance with this section; and
(2) shall make return of and payment to the department monthly
of the amount of tax which under this article and IC 6-3.6 the
employer is required to withhold.
(b) An employer shall pay taxes withheld under subsection (a)
during a particular month to the department no later than thirty (30)
days after the end of that month. However, in place of monthly
reporting periods, the department may permit an employer to report and
pay the tax for a calendar year reporting period, if the average monthly
amount of all tax required to be withheld by the employer in the
previous calendar year does not exceed one thousand dollars ($1,000).
An employer using a reporting period (other than a monthly reporting
period) must file the employer's return and pay the tax for a reporting
period no later than the last day of the month immediately following
the close of the reporting period.
(c) For purposes of determining whether an employee is subject to
taxation under IC 6-3.6, an employer is entitled to rely on the statement
of an employee as to the employee's county of residence as represented
by the statement of address in forms claiming exemptions for purposes
of withholding, regardless of when the employee supplied the forms.
Every employee shall notify the employee's employer within five (5)
days after any change in the employee's county of residence.
(d) A county that makes payments of wages subject to tax under this
article:
(1) to a precinct election officer (as defined in IC 3-5-2.1-82); and
(2) for the performance of the duties of the precinct election
officer imposed by IC 3 that are performed on election day;
is not required, at the time of payment of the wages, to deduct and
retain from the wages the amount prescribed in withholding
instructions issued by the department.
(e) Every employer shall, at the time of each payment made by the
employer to the department, deliver to the department a return upon the
form prescribed by the department showing, with regard to wages paid
to the employer's employees:
(1) the amount of adjusted gross income tax deducted therefrom
in accordance with the provisions of this section;
(2) the amount of income tax, if any, imposed under IC 6-3.6 and
deducted therefrom in accordance with this section; and
(3) any other information the department may require.
Every employer making a declaration of withholding as provided in this
section shall furnish the employer's employees annually, but not later
than thirty (30) days after the end of the calendar year, a record of the
total amount of adjusted gross income tax and the amount of each
income tax, if any, imposed under IC 6-3.6, withheld from the
employees, on the forms prescribed by the department. In addition, the
employer shall file Form WH-3 annual withholding tax reports with the
department not later than thirty-one (31) days after the end of the
calendar year.
(f) All money deducted and withheld by an employer shall
immediately upon such deduction be the money of the state, and every
employer who deducts and retains any amount of money under the
provisions of this article shall hold the same in trust for the state of
Indiana and for payment thereof to the department in the manner and
at the times provided in this article. Any employer may be required to
post a surety bond in the sum the department determines to be
appropriate to protect the state with respect to money withheld pursuant
to this section.
(g) The provisions of IC 6-8.1 relating to additions to tax in case of
delinquency and penalties shall apply to employers subject to the
provisions of this section, and for these purposes any amount deducted
or required to be deducted and remitted to the department under this
section shall be considered to be the tax of the employer, and with
respect to such amount the employer shall be considered the taxpayer.
In the case of a corporate or partnership employer, every officer,
employee, or member of such employer, who, as such officer,
employee, or member is under a duty to deduct and remit such taxes,
shall be personally liable for such taxes, penalties, and interest.
(h) Amounts deducted from wages of an employee during any
calendar year in accordance with the provisions of this section shall be
considered to be in part payment of the tax imposed on such employee
for the employee's taxable year which begins in such calendar year, and
a return made by the employer under subsection (b) shall be accepted
by the department as evidence in favor of the employee of the amount
so deducted from the employee's wages. Where the total amount so
deducted exceeds the amount of tax on the employee as computed
under this article and IC 6-3.6, the department shall, after examining
the return or returns filed by the employee in accordance with this
article and IC 6-3.6, refund the amount of the excess deduction.
However, under rules promulgated by the department, the excess or any
part thereof may be applied to any taxes or other claim due from the
taxpayer to the state of Indiana or any subdivision thereof. In the event
that the excess tax deducted is less than one dollar ($1), no refund shall
be made.
(i) This section shall in no way relieve any taxpayer from the
taxpayer's obligation of filing a return or returns at the time required
under this article and IC 6-3.6, and, should the amount withheld under
the provisions of this section be insufficient to pay the total tax of such
taxpayer, such unpaid tax shall be paid at the time prescribed by
section 5 of this chapter.
(j) Notwithstanding subsection (b), an employer of a domestic
service employee that enters into an agreement with the domestic
service employee to withhold federal income tax under Section 3402
of the Internal Revenue Code may withhold Indiana income tax on the
domestic service employee's wages on the employer's Indiana
individual income tax return in the same manner as allowed by Section
3510 of the Internal Revenue Code.
(k) To the extent allowed by Section 1137 of the Social Security
Act, an employer of a domestic service employee may report and remit
state unemployment insurance contributions on the employee's wages
on the employer's Indiana individual income tax return in the same
manner as allowed by Section 3510 of the Internal Revenue Code.
(l) A person who knowingly fails to remit trust fund money as set
forth in this section commits a Level 6 felony.
Formerly: Acts 1963(ss), c.32, s.408; Acts 1965, c.233, s.20;
Acts 1969, c.326, s.6; Acts 1971, P.L.65, SEC.1; Acts 1973, P.L.50,
SEC.3. As amended by Acts 1979, P.L.68, SEC.3; Acts 1980, P.L.61,
SEC.6; Acts 1982, P.L.49, SEC.2; P.L.2-1982(ss), SEC.9; P.L.26-1985,
SEC.10; P.L.70-1986, SEC.2; P.L.94-1995, SEC.1; P.L.8-1996, SEC.6;
P.L.192-2002(ss), SEC.81; P.L.131-2008, SEC.16; P.L.172-2011,
SEC.60; P.L.137-2012, SEC.55; P.L.293-2013(ts), SEC.12;
P.L.158-2013, SEC.86; P.L.242-2015, SEC.17; P.L.197-2016, SEC.25;
P.L.159-2021, SEC.14; P.L.194-2023, SEC.20; P.L.186-2025,
SEC.67.