Indiana state income tax withholding calculator also takes into account any tax that a county may impose.This is because the state of Indiana has a flat tax rate at 3.23% rate regardless of your income level or filing status. However, 92 counties of Indiana State also charge personal income taxes. Therefore , when tax withholding is done , both the state tax as well as county tax on personal income are taken into consideration.
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Indiana state income tax withholding calculator
The purpose this withholding calculator is to give a fair idea to withholding agents ( read employers) about the amount of Indiana state and the county income tax to withhold from an employee’s wages.
Formula used in Indiana state income tax withholding calculator
Formula is easy to understand.From the paycheck (wages ) you need to deduct three distinct type of deductions that Indiana state tax laws permit . For example ,
- An employee is entitled to deduct $1,000 per year and claim a maximum of six exemptions as claimed on line 5 of his/her Form WH-4.
- Similarly , he/she can claim additional dependent exemptions of $1500 per dependent (max five ) .
- From September 30, 2022: Table C is used to figure your adopted child dependent exemptions. Most employees are entitled to deduct $3,000 per year per qualifying adopted child claimed on line 7 of his/her Form WH-4.
You can read about it here.
1.Find net taxable income = Reduce the total deduction allowed from gross income
2. Find state tax -multiply with Indian state income tax rate
3.Find county tax =multiply with Indiana county tax rate applicable to him/her
Total tax to be withheld = 2+3
What is the cutoff date for deciding tax withholding in the state of Indiana?
First January of the concerned tax year is the cut-off date .If a person resides in any county in the state of Indiana as on 1st January of the year or carries on business or employment in any Indiana county, he or she is subject to county tax at the rate corresponding to that Indiana county.In that case , the county in which he/she is found resident of , tax rate of that county will be applicable apart from Indiana state tax rate.
Where can I get forms for withholding tax in Indiana?
You can see the list of forms for tax withholding on Indiana revenue department.
While the information on this site - Internal Revenue Code Simplified-is about legal issues, it is not legal advice or legal representation. Because of the rapidly changing nature of the law and our reliance upon outside sources, we make no warranty or guarantee of the accuracy or reliability of information contained herein.