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Indiana Payroll Instructions

For more about Goldenseal payroll accounting software, click here.
For US Federal payroll withholding instructions, click here.
For more info about importing the latest federal and state withholding tax tables from our free updates, click here.

Indiana charges both state and county income taxes. See State of Indiana Departmental Notice #1, available from the Indiana Department of Revenue, for a listing of local tax rates for each county. Payroll tax rates for some counties changed in 2005 (rates or withholding formulas have changed in 6 of the past 15 years).

Each county has separate tax rates for residents and non-residents. For construction companies doing work in different counties, this system makes payroll extremely complicated. You may need to use a large number of tax packages to track wages earned in each county.

HINT-- Turtle Creek Software provides free annual updates for US federal and Indiana tax withholding rates.

Indiana State Withholding Instructions

To enter withholding information for an employee, follow these steps:

  1. Choose Employees from the Accounts menu.
  2. Locate the employee record.
  3. 3. Enter the employee's marital status into the Marital Status field. You only need to use the Single or Married status, which is used only for federal taxes.
  4. Choose the correct Tax package for the county where the employee lives. State and County taxes are included in each package.
  5. Enter the number of federal dependents into the Federal Exemptions field.
  6. Enter the number of personal exemptions, claimed on Form WH-4, in the State Exemptions field.
  7. Enter the number of dependent exemptions, claimed on Form WH-4, in the Other Exemptions field.

Indiana County Taxes

There is a different withholding rate for each Indiana county. Goldenseal includes two Tax Items for each Indiana county-- one for the resident rate, and one for the non-resident rate.

NOTE-- We have changed the setup for county taxes starting with the 2005 tax year.

You'll need to set up a Tax Package for each combination of county tax rates for which you need to withhold. To do that, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Packages from the submenu.
  2. Click the New button (or click on an existing package and click the Duplicate button).
  3. Click next to each tax that is included in this package.
  4. Click OK. Then repeat steps 2 and 3 to create more packages, or click Close to leave the setup window.

If employees are withheld at more than one county rate, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Wage Schedules from the submenu.
  2. Click the New button (or click on an existing schedule and click the Duplicate button).
  3. Enter the appropriate tax package in the Tax Package field.
  4. Click OK. Then repeat steps 2 and 3 to create more wage schedules, or click Close to leave the setup window.
  5. Enter the appropriate Wage Schedule into each Labor Hours record when you enter employee hours into Goldenseal.

Indiana Unemployment Tax Instructions

In 2005, Indiana SUTA is charged on the first $7,000 of wages for each employee. The starting rate is 2.7%. After the first year the rate is different for each company, depending on past layoff history.

To enter your Indiana SUTA tax rate into the Goldenseal payroll software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items from the submenu.
  2. You'll see a list of Tax Items. Locate the Indiana SUTA tax in the list, and double-click on it. HINT: If you don't see SUTA in the list, you'll need to import the Indiana payroll info first.
  3. Enter the percentage rate that you pay into the percentage field to the right of Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment.

Marital Status

Use the following to determine the value for the Marital Status popup menu in each Employee account:

  • Single- single employee with one personal exemption
  • Married- married employee with two personal exemptions
  • Dual Income- married employee with one personal exemption
  • Head of House- employee claims Head of Family status
  • Other- not used

Contacts

Payroll Tax Office-- 317 233-4016
SUTA rate info-- 317 232-7436

Indiana Tax Form Control Section
Room 113 State Office Building
100 N Senate Ave
Indianapolis IN 46204 2253

Website-- www.ai.org/dor/forms/statetoc.html

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