Wage Reporting: Need to Know

Wage Base Credits

What if an Employee Worked for an Out of State Employer During the Calendar Year?

Employers are entitled to a credit if they have paid wages to a state other than Indiana and the worker permanently relocates to Indiana during the calendar year.

Employers must apply for this credit as an adjustment to the amount assessed by DWD when filing their quarterly wage and employment report. However, the full assessment must still be paid—otherwise, the employer will be considered delinquent. Applying for a credit does not reduce the assessed amount or change the employer’s responsibility to pay in full by the due date.

How To Apply for A Credit

To successfully apply for a credit in E S S, go to the request menu and select the Penalty/ Interest / Waiver option.

For each worker who has permanently moved and is now based in Indiana, you’ll need to provide the following details: Permanent Status (indicate that the move is permanent) Social Security Number Name Prior State Name Prior State Reported Gross Wages Prior State Wage Base Reason for the request (enter this in the comments box)

Based on the nature and completeness of the information submitted in E S S, a DWD tax specialist may need to reach out to the employer by email or phone to clarify or confirm the information provided. Please return any calls or emails to expedite the approval process.

If the employer has previously self-calculated a wage base credit for an employee that performed services in more than one state or for a successorship, the credit may be lost per the changes in reporting requirements.

Successorship credits will be automatically applied to the extent that the transfer was reported to DWD with correct date information. As the successor gets credit for any wage base paid by the predecessor, credits for a quarter where a worker performs services for both employers are not awarded as the predecessor would not have paid the contribution at the time the concurrent employment occurs during the quarter.

Potential Determinations:

DWD will review the information provided, the requirements of the Act, and the UIPL on localization before making one of three determinations:

1. Approved Wage Base Credit – If the worker has permanently moved to Indiana, the employer will receive a wage base credit. This credit can either be refunded or applied to the employer’s next assessment.
2. Worker Not Localized to Indiana – If the worker is not actually based in Indiana, the employer must correct their reporting by amending their Indiana submission and filing in the correct state. The credit request will be denied, but the employer will receive a credit once the worker’s wages are removed from Indiana.
3. Worker Localized to Indiana – If the worker should be reported in Indiana instead, the employer must amend both their Indiana report and the report in the incorrect state. The credit request will be denied, but the employer may be eligible for a credit from the state where the wages were mistakenly reported.

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