The Indiana WH-4 form tells your employer how much state and county income tax to hold back from each paycheck. You fill in the number of personal exemptions you qualify for, identify your county of residence and county of principal employment as of January 1, and, if you want, add a flat dollar amount of extra withholding per pay period. The completed form goes to your employer and stays in their payroll files; it is not sent to the Indiana Department of Revenue.1Indiana Department of Revenue. Employee’s Withholding Exemption and County Status Certificate
The form’s official name is the Employee’s Withholding Exemption and County Status Certificate. Every resident and nonresident employee with wages subject to Indiana state or county tax should complete one.
Filling Out the Exemption Lines
The exemption section is the heart of the form. More exemptions means less tax withheld per paycheck, so the goal is to match your withholding to the tax you’ll actually owe.
Work through the lines one at a time:
- Personal exemption. You get one for being a taxpayer. Enter “1.”
- Spouse exemption. If you’re married and your spouse does not claim their own exemption on a separate WH-4, claim one here.
- Dependents. Enter the number of dependents you support. Each counts as one exemption.
- Age and blindness. You get an extra exemption if you or your spouse are 65 or older, and another if you or your spouse are legally blind. Check the applicable boxes and add to the total.
- Additional qualifying dependent exemptions. The form allows extra exemptions for certain qualifying dependents beyond the standard count; the form’s own instructions spell out who qualifies.
Add the lines together and enter the total on the main exemption line your employer reads when setting up payroll.1Indiana Department of Revenue. Employee’s Withholding Exemption and County Status Certificate One special rule: nonresident aliens may claim only one withholding exemption regardless of what the arithmetic would otherwise allow.
The County Section
Indiana’s local income tax is separate from the state rate, and every county imposes one. Rates run from 0.5% in Porter County to 3% in Randolph County.2IN.gov. How to Compute Withholding for State and County Income Tax The WH-4 pins down which rate your employer uses by asking for two things: your county of residence and your county of principal employment. Both are locked in as of January 1 of the tax year and stay fixed the entire year, even if you move or switch jobs later.3Indiana Department of Revenue. Income Tax Information Bulletin 32 – General Information on Local Income Taxes You identify each county using the numbered codes printed on the form.
Which County Rate Your Employer Uses
If you live and work in the same Indiana county, your employer withholds at that county’s rate. If you live in one Indiana county and work in another, the county of residence rate controls, applied to your entire Indiana adjusted gross income.3Indiana Department of Revenue. Income Tax Information Bulletin 32 – General Information on Local Income Taxes
If You Live Outside Indiana
If you live outside Indiana but your principal workplace is in an Indiana county as of January 1, your employer withholds county tax at that work county’s rate. There is no separate nonresident rate; you pay the same county rate as residents.3Indiana Department of Revenue. Income Tax Information Bulletin 32 – General Information on Local Income Taxes Enter your out-of-state residence and the Indiana county where you work.
If You Live in Kentucky, Michigan, Ohio, Pennsylvania, or Wisconsin
Indiana has reciprocal income tax agreements with those five states. If you live in one of them and work in Indiana, your employer generally does not withhold Indiana state income tax; you pay income tax to your home state instead. To claim this, file Form WH-47 (Certificate of Residence) with your employer, not the standard WH-4.4Indiana Department of Revenue. Income Tax Information Bulletin 33 – Withholding Requirements for Nonresident Employees
Reciprocity does not cover county tax. If your principal workplace is in an Indiana county, you still owe that county’s local income tax. Workers from reciprocity states who expect to work in Indiana for 30 days or fewer in the calendar year may also need Form WH-4AFF to claim a county tax exemption.
Adding Extra Withholding or Claiming Exempt
If you have freelance income, rental income, investment gains, or other money not subject to Indiana withholding, the standard exemption calculation probably won’t cover the full bill. The WH-4 has separate lines where you can request a specific dollar amount of additional state withholding and additional county withholding per pay period.5Indiana Department of Revenue. Employee’s Withholding Exemption and County Status Certificate This is the simplest way to avoid an underpayment penalty when you have income from multiple sources. Entering an amount is a request; the employee remains responsible for any tax still owed at year end.
At the other extreme, if you had no Indiana income tax liability last year and expect none this year, you can write “Exempt” on the WH-4 and no state income tax will be withheld. The bar is high: your total Indiana tax has to genuinely be zero. The Department of Revenue’s rough guide is that gross income of $1,000 or more likely creates a filing obligation.6Indiana Department of Revenue. Who Should File a Tax Return? Exempt status is not permanent; reevaluate it each year, and file a new WH-4 immediately if your circumstances change.
When to File a New WH-4
You can file a new WH-4 any time your exemptions increase. You’re required to file a new one when your county of residence or county of principal employment changes, and Indiana’s regulation specifically requires employees who change counties to file a new WH-4 by January 1 of the following year.7Cornell Law School. 45 IAC 3.1-1-102 – Changes in Form WH-4
Events that should prompt a new form:
- Marriage or divorce, which changes whether you can claim a spouse exemption.
- Birth or adoption, which adds a dependent exemption.
- Moving to a different county. A move from Porter County (0.5%) to Randolph County (3%) would increase your county tax sixfold.
- A new job in a different county, which affects your county of principal employment as of the next January 1.
- Starting or losing significant side income, which may justify adjusting your additional withholding amount.
What It Costs to Get It Wrong
If your WH-4 doesn’t produce enough withholding and you owe more than $1,000 in combined state and county tax when you file your IT-40, you face an underpayment penalty of 10% on the shortfall.8Indiana General Assembly. 45 IAC 26-34 – Estimated Tax Penalty The Department of Revenue also charges 7% annual interest on late balances for 2026.9Indiana Department of Revenue. Departmental Notice 3 – Interest Rates
The most common trigger is non-wage income (rental, freelance, investment) that never has anything withheld against it. The IT-40 instruction booklet flags this as one of the most frequent errors in Indiana filings.10Indiana Department of Revenue. IT-40 Full Year Resident Individual Income Tax Booklet 2025 If you know you’ll have substantial income outside your paycheck, either raise your additional withholding on the WH-4 or make quarterly estimated payments directly to the Department of Revenue. Padding your exemption count to get a bigger paycheck rarely comes out ahead once the penalty and interest are added in.