Tax & Accounting Blog

Indiana changes in state income tax withholding deposit and reporting

1099, Document and WorkFlow Management, Information Reporting for Wealth Management, ONESOURCE, Tax Information Reporting, TIN Compliance, Trust Tax, Withholding Management August 16, 2012

If you withhold Indiana personal income tax from retirement distributions, be alert for procedural changes in remitting and reporting to the Indiana Department of Revenue in 2013. 

Effective January 1, 2013, all entities that withhold Indiana income tax must remit the withheld taxes electronically and file the withholding report WH-1 electronically.  Electronic filing and reporting are through the INtax on-line system.  (Under existing rules through December 31, 2012, electronic deposit of withheld tax is required only for entities that registered later than December 31, 2010, as withholders of Indiana tax.)

Also effective January 1, 2013, if the average amount of all tax required to be withheld by the payer in the previous calendar year did not exceed $1,000, the payer may report and pay the tax for a calendar year reporting period instead of making monthly remittance of withheld Indiana income tax.  (Under existing rules through December 31, 2012, the monthly average maximum amount of withholding that qualifies for annual reporting and remittance is $10; a $75 monthly average requires quarterly remittance; and a $1,000 monthly average requires monthly remittance.)