DEPARTMENT OF STATE REVENUE
Information Bulletin #33
Income Tax
August 2008
(Replaces Information Bulletin #33, Dated December 2000)
DISCLAIMER: Information bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules, and court decisions. Any information that is inconsistent with the law, regulations, or court decisions is not binding on either the Department or the taxpayer. Therefore, the information provided in this Bulletin should only serve as a foundation for further investigation and study of the current law and procedures related to its subject matter.
SUBJECT: Withholding Requirements for Nonresident Employees
EFFECTIVE DATE: Upon Publication
The withholding of income taxes is required for all nonresidents employed in Indiana, except for legal residents of states complying with Indiana's reciprocity statute,
IC 6-3-5-1.
Indiana has established reciprocity agreements with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin concerning the collection of income tax from nonresidents employed in Indiana. These agreements provide that Indiana will not impose adjusted gross income tax on the salaries, wages, tips, and commissions earned by the legal residents of states with reciprocity who work in Indiana.
Indiana residents who work in states with reciprocity will receive identical treatment from those states.
I. REQUIREMENTS OF EMPLOYERS
Because of reciprocity agreements, Indiana employers are not required to withhold Indiana adjusted gross income tax from qualified nonresidents but are encouraged to withhold local option income taxes at the nonresident rate if applicable. Employers are also encouraged to withhold the appropriate taxes on behalf of the state where the employee resides.
II. REQUIREMENTS OF NONRESIDENT EMPLOYEES
A qualified nonresident employee who works in Indiana is required to submit a properly completed form WH-47 to his or her employer. This form identifies the employee's state of legal residence.
Indiana reciprocity agreements do not affect withholding requirements concerning the Indiana County Adjusted Gross Income Tax (CAGIT), County Economic Development Income Tax (CEDIT), or County Option Income Tax (COIT).
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Posted: 08/27/2008 by Legislative Services Agency
DIN: 20080827-IR-045080660NRA
Composed: May 04,2024 10:48:04PM EDT
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