Indiana Counties (Local) Income Tax Withholding

Reference Number: NFC-23-1699455927
Published: December 11, 2023
Effective: Pay Period 24, 2023

Summary

The income tax withholding and tax rate have changed to include the following:

  • A new exemption has been added equal to $1,500 for each first-time additional dependent.
  • The income tax rate for Vanderburgh County, Indiana, has changed.

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

Tax Formula

State Abbreviation:

IN

State Tax Withholding State Code:

18

Acceptable Exemption Form: 

WH-4

Acceptable Exemption Data:

A-Z, 0/Number of Dependents

Special Coding:

Determine the Total Number of Exemptions field as follows:
First Digit - Enter the alpha (A-Z) to represent the number of additional exemptions claimed (A=1, B=2, C=3, etc.; up to Z=26). Otherwise, enter zero (0).
Second and Third Digits - Enter the number of exemptions claimed. (If less than 10, precede with a zero (0).)

Additional Information:

None

 Withholding Formula (Effective Pay Period 24, 2023)

  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 annual wages.
  5. Determine the personal exemption allowance by applying the following guideline and subtract from the result of step 4:
    Personal Exemption Allowance = $1,000 x Number of Personal Exemptions1
    1 Number of personal exemptions claimed for self, spouse, over age 65, blindness, and dependents
  6. Determine the additional exemptions by applying the following guidelines and subtract each amount from step 5 to compute the taxable income:
    1. Additional Exemptions (A) = $1,500 x Number of Additional Dependent Exemptions2
      2 Number of additional exemptions claimed for certain qualifying dependents
    2. Additional Exemptions (B) = $1,500 x (2 x Number of Additional Adopted Dependent Exemptions3)
      3 Number of additional exemptions claimed for additional adopted dependent exemptions.
    3. First-Time Additional Exemptions (C) = $1,500 x Number of First-Time Additional Dependent Exemptions4
      4 Number of additional exemptions claimed for first-time additional dependent.
  7. Apply the taxable income, computed in steps 5, 6a, 6b, and/or 6c, to the guideline in the table below to determine the annual Indiana county income tax withholding:

Compute the County Income Tax Withholding For

Tax Rate Percentage

State/County Code

Allen    

1.48    

18/003

Clay    

2.35    

18/021

Grant

2.55    

18/053

Greene5    

2.15    

18/055

Marion    

2.02

18/097

Martin    

2.50    

18/101

Miami    

2.54    

18/103

Tippecanoe    

1.28    

18/157

Vanderburgh    

1.25

18/163

5 Voluntary county tax status

  1. Divide the annual Indiana county income tax withholding calculated in step 7 by the number of pay dates in the tax year to obtain the biweekly Indiana county income tax withholding.

Resources

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

Inquiries

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.