TAXES 22-31, Indiana Counties (Local) Income Tax Withholding

Published: December 14, 2022
Effective: Pay Period 25, 2022

Summary

A new exemption equal to $3,000 for each adopted child has been added to the local income tax withholding formulas for Indiana.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:

IN

State Tax Withholding State Code:

18

Acceptable Exemption Form:

WH-4

Acceptable Exemption Data:

A-Z, 0/Number of Dependents

Special Coding:

Determine the Total Number of Exemptions field as follows:
First Digit - Enter the alpha (A-Z) to represent the number of additional exemptions claimed (A=1, B=2, C=3, etc.; up to Z=26). Otherwise, enter zero (0).

Second and Third Digits - Enter the number of exemptions claimed. (If less than 10, precede with a zero (0).)

Additional Information:

None

Withholding Formula (Effective Pay Period 25, 2022)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Employees Health Benefits Plan payment(s) (includes dental and vision insurance program, and Flexible Spending Account - health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the annual wages.
  5. Determine the exemption allowance by applying the following guideline and subtract this amount from the result of step 4:

    Exemption Allowance = $1,000 x Number of Exemptions1
    1 Number of exemptions claimed for self, spouse, over age 65, blindness, and dependents

  6. Determine the additional allowance/exemptions by applying the following guidelines and subtract each amount from the result of step 5 to compute the taxable income:
    1. Additional Allowance = $1,500 x Number of Additional Exemptions2
      2 Number of additional exemptions claimed for certain qualifying dependents
    2. Additional Exemptions = $1,500 x (2 x Number of Qualifying Adopted Children3)
      3 Number of additional exemptions claimed for qualifying adopted children
  7. Apply the taxable income, computed in steps 5, 6a, and/or 6b, to the guideline in the table below to determine the annual Indiana county income tax withholding:

    Compute the County Income Tax Withholding For

    Tax Rate Percentage

    State/County Code

    Allen

    1.48

    18/003

    Clay

    2.35

    18/021

    Grant

    2.55

    18/053

    Greene3

    1.95

    18/055

    Marion

    2.02

    18/097

    Martin

    2.50

    18/101

    Miami

    2.54

    18/103

    Tippecanoe

    1.28

    18/157

    Vanderburgh

    1.20

    18/163

    3 Voluntary county tax status

  8. Divide the annual Indiana county income tax withholding calculated in step 7 by the number of pay dates in the tax year to obtain the biweekly Indiana county income tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Inquiries

For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at 1-855-NFC-4GOV (1-855-632-4468) or via the customer service portal at ServiceNow Portal for Federated Users and at ServiceNow Portal for Non-Federated Users.