Indiana Tax

For Indiana residents, you specify the employee's exemptions.

Deltek Modification Date - 2/17/17

Enter the following field information for residents of Indiana on the Withholding grid on the Payroll tab of the Employees hub:

Field	Description
Status	Indiana’s tax calculations do not use the Status field.
Exemptions	Enter the number of withholding exemptions claimed by the employee on the Indiana Employee’s Withholding Exemption Certificate, Form WH-4. This figure includes: Personal exemptions for self and spouse not claimed on other Form WH-4. Additional exemptions for age and blindness. Exemptions for dependents.
Other Exemptions	Indiana’s tax calculations do not use the Other Exemptions field.

Automatically Calculated Variables

DPS automatically computes the Allowance based on the exemptions claimed by the employee.

Allowance

The Allowance is based on the number of exemptions entered in the first and second Exemptions fields. It is determined by multiplying the number of exemptions in the first Exemptions field by $1,000, and the number of exemptions entered in the second Exemptions field by $1,500.

How DPS Calculates Tax

To calculate an employee's Indiana State tax, DPS does the following:

1. Multiplies the employee's gross pay per pay period by the number of pay periods in a year to determine annualized gross wages.
2. Subtracts the employee's Allowance and 401(k) and 125/Cafeteria plan contributions from the employee's annualized gross wages to determine the taxable income.
3. Calculates the net income tax by applying Tax Calculation Method 2 to the taxable income, using a percentage of 3.23%.
4. Divides the net income tax by the number of pay periods in a year to determine the amount to be withheld for the pay period.