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IN: How to Compute Withholding for State and County Income Tax

September 05, 2023

The Indiana Department of Revenue released a notice to help compute withholdings for state and county income taxes.
Alert

At A Glance

  • The Indiana Department of Revenue provided guidance to help employers determine the correct amount of Indiana county income tax to withhold from employee wages effective September 15, 2023.
  • Indiana also released each county’s tax rate and new withholding for first-time additional dependent exemption.

Indiana County Tax Rates

Departmental Notice #1 provides guidance on county tax assignation, deduction tables, and a listing of the current county tax rates.

Withholding agents should withhold county tax based on the employee’s Indiana county of residence as of January 1 of the tax year. If the employee resides out-of-state on January 1 but has his or her principal place of work or business in an Indiana county as of January 1, then the withholding agency should withhold for the Indiana county of principal place of work or business.

Indiana County Tax Rates: Effective January 1, 2023:

County Name

County Code

County Tax Rate

Adams

01

0.01624

Allen

02

0.0148

Bartholomew

03

0.0175

Benton

04

0.0179

Blackford

05

0.015

Boone

06

0.017

Brown

07

0.025234

Carroll

08

0.022733

Cass

09

0.0295

Clark

10

0.02

Clay

11

0.0235

Clinton

12

0.0245

Crawford

13

0.01

Daviess

14

0.015

Dearborn

15

0.012

Decatur

16

0.025

DeKalb

17

0.0213

Delaware

18

0.015

Dubois

19

0.012

Elkhart

20

0.02

Fayette

21

0.0257

Floyd

22

0.0135

Fountain

23

0.021

Franklin

24

0.015

Fulton

25

0.0268

Gibson

26

0.009

Grant

27

0.0255

Greene

28

0.0215*

Hamilton

29

0.011

Hancock

30

0.0194

Harrison

31

0.01

Hendricks

32

0.017

Henry

33

0.017

Howard

34

0.0175

Huntington

35

0.0195

Jackson

36

0.021

Jasper

37

0.02864

Jay

38

0.0245

Jefferson

39

0.009

Jennings

40

0.025

Johnson

41

0.014

Knox

42

0.017

Kosciusko

43

0.01

LaGrange

44

0.0165

Lake

45

0.015

LaPorte

46

0.0145

County Name

County Code

County Tax Rate

Lawrence

47

0.0175

Madison

48

0.0225

Marion

49

0.0202

Marshall

50

0.0125

Martin

51

0.025

Miami

52

0.0254

Monroe

53

0.02035

Montgomery

54

0.0265*

Morgan

55

0.0272

Newton

56

0.01

Noble

57

0.0175

Ohio

58

0.015

Orange

59

0.0175

Owen

60

0.025

Parke

61

0.0265

Perry

62

0.014*

Pike

63

0.0075

Porter

64

0.005

Posey

65

0.0125

Pulaski

66

0.0285

Putnam

67

0.021

Randolph

68

0.03

Ripley

69

0.0138

Rush

70

0.021

St. Joseph

71

0.0175

Scott

72

0.0216

Shelby

73

0.016

Spencer

74

0.008

Starke

75

0.0171

Steuben

76

0.0179

Sullivan

77

0.017

Switzerland

78

0.0125

Tippecanoe

79

0.0128

Tipton

80

0.026

Union

81

0.02

Vanderburgh

82

0.012

Vermillion

83

0.015

Vigo

84

0.02

Wabash

85

0.029

Warren

86

0.0212

Warrick

87

0.01

Washington

88

0.02

Wayne

89

0.0125

Wells

90

0.021

White

91

0.0232

Whitley

92

0.016829

How to Calculate Indiana State and County Income Tax

Indiana provides deduction constant tables on the Departmental Notice #1 to help calculate state and county income tax. These tables divide the dollar amount of the exemption/dependent 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.

Calculating Personal Exemptions

Use Table A to figure out personal exemptions. Each employee is entitled to deduct $1,000 per year per exemption claimed on line 5 of his/her Form WH-4. Personal exemptions include additional exemptions if the employee and/or the employee’s spouse are age 65 or older and/or blind. See Form WH-4.

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

Calculating Additional Dependent Exemptions

New for withholding after September 14, 2023: Use Table B to figure out first-time additional dependent exemption. Most employees are entitled to deduct $1,500 per year per qualifying first-time dependent exemption claimed on line 7 of his/her Form WH-4.

Use Table B to figure out additional 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.

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

Calculating Adopted Child Dependent Expemptions

Use Table C to figure out adopted child dependent exemptions. Most employees are entitled to deduct $3,000 per year per qualifying adopted child claimed on line 8 of his/her Form WH-4.

Table C

Daily

Weekly

Bi-Weekly

Semi-Monthly

Monthly

1

8.22

57.69

115.38

125.00

250.00

2

16.44

115.38

230.77

250.00

500.00

3

24.66

173.08

346.15

375.00

750.00

4

32.88

230.77

461.54

500.00

1,000.00

5

41.10

288.46

576.92

625.00

1,250.00

More information on this change is available on the Indiana Department of Revenue website.

Download the Employee's Withholding Exemption & County Status Certificate WH-4.

Next Steps

We’ll post additional resources and any other information in our PEAK knowledge base when it’s available.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.

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