Indiana Updates Withholding Guidelines, Revises Form WH-4

The Indiana Department of Revenue (DOR) has revised Departmental Notice No. 1 to reflect a new tax exemption for first-time qualifying children. Also, Form WH-4, Employee's Withholding Exemption and County Status Certificate, has been revised.

Guidelines to Calculate New Tax Exemption Updated

Table B, included in Departmental Notice No. 1, is used to calculate additional dependent exemptions. Effective September 15, 2023, Table B has been adjusted to reflect legislation that doubled the dependent exemption in the first year it is allowed to be taken (i.e., for parents of a newborn or a recently adopted child). The calculation example on page 3 of the Notice now includes a second deduction for Table B, for a first-time additional dependent.

Form WH-4 Revised

The revised Form WH-4 has a new checkbox for an employee to declare if the employee moves or works in another Indiana county after January 1 and wants to request a change to a county of work or residence for the next calendar year. Also, Line 7 has been added to claim a dependent child for the first time to be eligible for a one-time exemption.

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Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for PayrollOrg.