If you have employees working at your business, you’ll need to collect withholding taxes. These are state and county taxes that are withheld from your employees’ wages.
Registration for withholding tax is necessary if the business has:
- Non-resident shareholders
- Non-resident partners
- Beneficiaries for distributions of income.
If you previously registered to file withholding tax, you must still file Forms WH-1 and WH-3 for each period even if no tax is due or to report no employees for that time period. Late filed returns are subject to a penalty of up to 20%, and a minimum penalty of $5. Late filed WH-3’s are subject to a penalty of $10 per withholding document (W-2, 1099, K-1).
Beginning in 2023, if you file your Form WH-3 by paper, you must also complete the new Schedule IN-WH3. Schedule IN-WH3 will also be required for prior year returns.
How to Register
To register for withholding for Indiana, the business must have an Employer Identification Number (EIN) from the federal government. In addition, the employer should look at Departmental Notice #1 that details the withholding rates for each of Indiana’s 92 counties.
Below you’ll find more information about withholding tax and additional resources including the business tax application, frequently asked questions and county tax rates.
If you have questions about withholding tax, visit INBIZ.
- Frequently Asked Questions
- FAQs for nonresident withholding tax
- Filing your withholding taxes electronically
- County Withholding Tax Rates
- Withholding Information for Part-Time Employees
- Indiana Secretary of State
- Internal Revenue Service: Employer Identification Numbers
- IRS Small Business and Self-Employed Tax Center
- Department of Workforce Development
- Indiana Current Year Tax Forms
- Income Tax to Residents With Out-of-State Income (Reciprocal Agreement States)