TAXES 22-32, Indiana State Income Tax Withholding

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


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

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

Tax Formula

State Abbreviation:


State Tax Withholding State Code:


Acceptable Exemption Form:


Basis for Withholding:

State Exemptions

Acceptable Exemption Data:

0/Number of Exemptions/Number of Additional Exemptions

TSP Deferred:


Special Coding:

Determine the Total Number Of Allowances field as follows:
First Position − Enter 0 (zero). Second and Third Positions − Enter the number of exemptions claimed.

Determine the Additional Exemptions Claimed field as follows:
First and Second Positions − Enter the number of additional exemptions claimed on Line 5 of the WH-4. Valid values are 00 through 99. If no allowances are claimed, enter 00.

Withholding Formula (Effective Pay Period 25, 2022)

NOTE: The State does not allow employees to claim exemption from withholding. If the employee has claimed exemption, calculate tax using the steps below.

  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 gross annual wages.
  5. Determine the exemption allowance by applying the following guideline and subtract each 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 step 5 to compute the taxable income:
    1. Additional Allowance = $1,500 x Number of Additional Exemptions2
      2 Number of 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. Multiply the taxable income computed in steps 5, 6a, and/or 6b, by 3.23 percent to obtain the annual Indiana tax withholding.
  8. Divide the annual Indiana tax withholding calculated in step 7 by the number of pay dates in the tax year to obtain the biweekly Indiana tax withholding.


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.

Previous Tax Bulletin


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.