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Payroll Indiana, Unique Aspects of Indiana Payroll Law and Practice
The Indiana State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is: Department of Revenue Compliance Division Indiana Govt. Center North Indianapolis, IN 46204-2253 (317) 233-4018 www.ai.org/dor Indiana requires that you use Indiana form "WH-4, Employee's Withholding Exemption and County Status Certificate" instead of a Federal W-4 Form for Indiana State Income Tax Withholding. Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In Indiana cafeteria plans are: not taxable for income tax calculation; not taxable for unemployment insurance purposes. 401(k) plan deferrals are: not taxable for income taxes; taxable for unemployment purposes. In Indiana supplemental wages are taxed at a 3.4% flat rate. You may file your Indiana State W-2s by magnetic media if you choose to. The Indiana State Unemployment Insurance Agency is: Department of Workforce Development Indiana Government Center S. 10 N. Senate Ave., Rm. 331 Indianapolis, IN 46204-2277 (317) 232-6702 http://www.state.in.us/workcomp/index.html The State of Indiana taxable wage base for unemployment purposes is wages up to $7,000.00. Indiana has optional reporting of quarterly wages on magnetic media. Unemployment records must be retained in Indiana for a minimum period of five years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination. The Indiana State Agency charged with enforcing the state wage and hour laws is: Department of Labor Wage and Hour Division 402 West Washington St., Rm. W195 Indianapolis, IN 46204 (317) 232-2673 http://www.state.in.us/labor/ The minimum wage in Indiana is $5.15 per hour. The general provision in Indiana concerning paying overtime in a non-FLSA covered employer is one and one half times regular rate after 40-hour week. Indiana State new hire reporting requirements are that every employer must report every new hire and rehire. The employer must report the federally required elements of: Employee's name Employee's address Employee's social security number Employer's name Employers address Employer's Federal Employer Identification Number (EIN) This information must be reported within 20 days of the hiring or rehiring. The information can be sent as a W-4 or equivalent by mail, fax or electronically. There is a $500 penalty for a late report in Indiana. The Indiana new hire-reporting agency can be reached at 866-879-0198 or 317-612-3028 or on the web at www.in-newhire.com. Indiana does not allow compulsory direct deposit Indiana requires the following information on an employee's pay stub: straight time and overtime pay hours worked itemized deductions Indiana requires that employee be paid semimonthly or biweekly; less frequently for FLSA-exempt employees. Indiana requires that the lag time between the end of the pay period and the payment of wages to the employee not exceed ten days. Indiana payroll law requires that involuntarily terminated employees must be paid their final pay by their next regular payday and that voluntarily terminated employees must be paid their final pay by the next regular payday. Deceased employee's wages must be paid when normally due to the surviving spouse; if none, other distributee after affidavit of right; estate not over $25,000. Escheat laws in Indiana require that unclaimed wages be paid over to the state after one year. The employer is further required in Indiana to keep a record of the wages abandoned and turned over to the state for a period of 10 years. Indiana payroll law mandates no more than $3.02 may be used as a tip credit. In Indiana the payroll laws covering mandatory rest or meal breaks are only that minors under 16 must have 30 minutes during 3rd-5th hour of shift lasting at least 6 hours. There is no provision in Indiana law concerning record retention of wage and hour records therefor it is probably wise to follow FLSA guidelines. The Indiana agency charged with enforcing Child Support Orders and laws is: Bureau of Child Support 402 W. Washington St., Room W360 Indianapolis, IN 46204 (317) 233-5437 http://www.in.gov/dcs/support/index.html Indiana has the following provisions for child support deductions: When to start Withholding? 14 working days after the withholding order is mailed to the employer. When to send Payment? payday When to send Termination Notice? Within 10 days of termination. Maximum Administrative Fee? $2 per payment. Withholding Limits? Federal Rules under CCPA.
Please note that this article is not updated for changes that can and will happen from time to time.
Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice. Mr. Read is the author of ?How to Start a New Business.? To find professional payroll service at a budget price go to www.PayrollonaBudget.com a paperless payroll company. For a full service payroll bureau with CPA?s on staff visit www.CustomPayroll.com . See an excerpt of Mr. Read?s interviews from William Shatners ?Heartbeat of America? television show on the web sites linked above.
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