Form WH-4: Employee’s Withholding Exemption and County Status Certificate

Form WH-4: Employee’s Withholding Exemption and County Status Certificate: Key Takeaways

• Indiana Form WH-4 is used by employees to set state and county income tax withholding preferences.
• Form includes personal info, county residency/employment as of January 1, exemptions, and options for additional withholding.
• Updated in 2023 to include a $3,000 dependent child exemption and a checkbox for county changes.

Form WH-4 enables Indiana employees to communicate their tax withholding details accurately. It ensures employers withhold correct amounts for state and county taxes from paychecks.

This article explains the purpose, components, recent updates, filing requirements, and how to submit Form WH-4.

1. Understanding Form WH-4 for Indiana Employees

Form WH-4, titled "Employee’s Withholding Exemption and County Status Certificate," is essential for Indiana employees to specify their withholding exemptions and county status.

Employers rely on this form to calculate state and county tax withholdings correctly. It reflects individual tax situations such as exemptions claimed and county residency or employment.

Key Components of Form WH-4

• Personal Information: Employee’s full legal name, Social Security Number, and current home address.
• County Information: County of residence and principal employment as of January 1—these determine the applicable county tax rates.
• Exemptions: Employees can claim personal, spousal, dependent, and additional exemptions for age or blindness.
• Additional Withholding: Option to specify extra withholding amounts to cover anticipated tax liabilities.

2. Recent Updates to Form WH-4

The Indiana Department of Revenue updated Form WH-4 in August 2023 following legislative changes.

A notable addition is Line 7, which allows employees to claim a one-time $3,000 dependent child tax exemption for the first year they claim a dependent child, conforming with House Bill 1001 passed May 4, 2023.

Another important update includes a checkbox for county changes. This feature permits employees who changed their county of residence or principal employment after January 1 to notify employers to adjust the county tax withholding for the next calendar year.

3. Filing Requirements for Form WH-4 in Indiana

New Indiana employees are required to complete Form WH-4 upon hire to establish the correct withholding status from the start.

Employees must also file a new Form WH-4 if changes occur involving:

• Number of exemptions (due to marriage, divorce, or having children)
• County of residence or principal employment

According to Indiana Administrative Code, employees changing county residence or employment must file an updated Form WH-4 by January 1 of the following tax year.

If an employee's total exemptions decrease, a new form must be submitted within 10 days to adjust withholding promptly and avoid underpayment penalties.

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4. How To Submit Form WH-4

Once completed, Form WH-4 should be returned to the employee’s employer, typically to payroll or human resources.

The employer uses this information to withhold proper amounts for Indiana state and county income taxes and to remit them to tax authorities accordingly.

Employers retain this form on file and do not send it directly to the Indiana Department of Revenue.

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5. Best Practices for Employees and Employers Regarding Form WH-4

Employees should update Form WH-4 anytime significant life changes occur to prevent tax withholding mismatches and unexpected tax bills.

Employers should remind staff periodically about the importance of keeping their withholding certificates current and verified.

Additionally, payroll staff should stay informed about legislative updates, such as the 2023 changes, to apply new exemptions and county status rules effectively.

Hospitality employers interested in improving their hiring and retention strategies may benefit from reading about strategies to reduce restaurant employee turnover.

6. Additional Resources on Form WH-4 and Withholding in Indiana

For further details and official guidance, refer to these trusted resources:

• Indiana Department of Revenue: Withholding Tax Forms
• Indiana Department of Revenue: Withholding Income Tax
• Indiana Administrative Code, Rule 1, Section 1-102 - Changes in Form WH-4
• Departmental Notice #1: How to Compute Withholding for State and County Income Tax
• Indiana Department of Revenue: INTIME e-services portal

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Form WH-4: Employee’s Withholding Exemption and County Status Certificate: Conclusion

Indiana Form WH-4 is a critical document for managing accurate state and county income tax withholding for employees.

By completing the form correctly and updating it with any changes in exemptions or county status, employees help avoid surprises at tax time and keep withholding aligned with their obligations.

Employers must collect and apply this information properly, keeping abreast of updates like the 2023 dependent exemption to maintain compliance with Indiana tax rules.

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