Individual Income Tax Forms in Indiana – W4

It may feel a little overwhelming when it comes time to fill out tax forms, or every time you acquire a new employee. There is a lot of information out there, and sometimes it can be difficult to find what you need. Well, here’s what you need to know about individual income tax in the state of Indiana. Each person that earns a wage in the state of Indiana, regardless of where they live, or if residing in Indiana and earning a wage in another state, must pay state income taxes in addition to federal income taxes. But how much should be withheld each pay period for state income taxes? Fortunately, there is a simple form to help determine this.

In addition to the federal income tax withholding form, W4, each employee needs to fill out a WH-4 form for their Indiana State income tax withholding. This form has essentially the same information on it, but makes sure you have the proper withholding allowances for state-level withholdings. This form is available online here.

Also, to avoid double-taxation of income, the state of Indiana has Reciprocal Agreements in effect with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin – meaning that if the individual lives in one state and works in another, income tax will only be withheld for the state of residence. A form WH-47 should be used to establish the state of residence for any employee that wishes to alleviate themselves of the burden of double-taxation in these particular states.

And, please take note! If no income tax withholding form is filled out, taxes must be withheld at the highest level possible – single, no deduction allowances – even if the employee is known to be married. To prevent things like this from happening, I cannot stress enough the importance of having each employee file both their WH-4 as well as a W4 form for federal income taxes, so please make their completion a priority.