CHAPTER 4. RETURNS AND REMITTANCES
IC 6-3-4
Chapter 4. Returns and Remittances
IC 6-3-4-1
Who must make returns
Sec. 1. Returns with respect to taxes imposed by this act shall bemade by the following:
(1) Every resident individual having for the taxable year grossincome in an amount greater than the modifications providedunder IC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4).
(2) Every nonresident individual having for the taxable year anygross income from sources within the state of Indiana, exceptfor a team member (as defined in IC 6-3-2-2.7) who is coveredby a composite return filed under IC 6-3-2-2.7.
(3) Every corporation having for the taxable year any grossincome from sources within the state of Indiana.
(4) Every resident estate having for the taxable year any grossincome from sources within the state of Indiana.
(5) Every resident trust having for the taxable year any grossincome from sources within the state of Indiana.
(6) Every nonresident estate having for the taxable year anygross income from sources within the state of Indiana.
(7) Every nonresident trust having for the taxable year any grossincome from sources within the state of Indiana.
(Formerly: Acts 1963(ss), c.32, s.401; Acts 1965, c.233, s.16.) Asamended by Acts 1981, P.L.25, SEC.7; P.L.63-1997, SEC.3.
IC 6-3-4-1.5
Returns filed by professional preparers
Sec. 1.5. (a) If a professional preparer files more than one hundred(100) returns in a calendar year for persons described in section 1(1)or 1(2) of this chapter, in the immediately following calendar yearthe professional preparer shall file returns for persons described insection 1(1) or 1(2) of this chapter in an electronic format specifiedby the department.
(b) A professional preparer described in subsection (a) is notrequired to file a return in an electronic format if the taxpayerrequests in writing that the return not be filed in an electronic format.Returns filed by a professional preparer under this subsection shallnot be used in determining the professional preparer's requirement tofile returns in an electronic format.
(c) After December 31, 2010, a professional preparer who doesnot comply with subsection (a) is subject to a penalty of fifty dollars($50) for each return not filed in an electronic format, with amaximum penalty of twenty-five thousand dollars ($25,000) percalendar year.
As added by P.L.211-2007, SEC.23. Amended by P.L.131-2008,SEC.14.
IC 6-3-4-2 Returns; fiduciaries; husband and wife
Sec. 2. (a) If an individual is deceased, the return of suchindividual shall be made by the individual's executor, administrator,or other person charged with the property of such decedent.
(b) If an individual is unable to make a return, the return of suchindividual shall be made by a duly authorized agent, the individual'scommittee, guardian, fiduciary, or other person charged with the careof the person or property of such individual.
(c) Returns of an estate or a trust shall be made by the fiduciarythereof.
(d) Where a joint return is made by husband and wife pursuant tothe Internal Revenue Code, a joint return shall be made pursuant tothis article. Where a joint return is filed by a husband and wifehereunder, one spouse shall have no liability for the tax imposed bythis article upon the income of the other spouse.
(e) Where separate returns are made by husband and wifepursuant to the Internal Revenue Code, separate returns shall bemade pursuant to this article.
(Formerly: Acts 1963(ss), c.32, s.402; Acts 1965, c.233, s.17.) Asamended by Acts 1977(ss), P.L.4, SEC.9; P.L.3-1989, SEC.39.
IC 6-3-4-3
Filing date
Sec. 3. Returns required to be made pursuant to section 1 of thischapter shall be filed with the department on or before the 15th dayof the fourth month following the close of the taxable year.
(Formerly: Acts 1963(ss), c.32, s.403.) As amended by Acts 1980,P.L.61, SEC.4.
IC 6-3-4-4
Repealed
(Repealed by P.L.260-1997(ss), SEC.95.)
IC 6-3-4-4.1
Estimated payments; declaration of estimated tax; electronic fundstransfer
Sec. 4.1. (a) Any individual required by the Internal RevenueCode to file estimated tax returns and to make payments on accountof such estimated tax shall file estimated tax returns and makepayments of the tax imposed by this article to the department at thetime or times and in the installments as provided by Section 6654 ofthe Internal Revenue Code. However, the following apply toestimated tax returns filed and payments made under this subsection:
(1) In applying Section 6654 of the Internal Revenue Code forthe purposes of this article, "estimated tax" means the amountwhich the individual estimates as the amount of the adjustedgross income tax imposed by this article for the taxable year,minus the amount which the individual estimates as the sum ofany credits against the tax provided by IC 6-3-3.
(2) Estimated tax for a nonresident alien (as defined in Section
7701 of the Internal Revenue Code) must be computed byapplying not more than one (1) exclusion underIC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4), regardless of the totalnumber of exclusions that IC 6-3-1-3.5(a)(3) andIC 6-3-1-3.5(a)(4) permit the taxpayer to apply on the taxpayer'sfinal return for the taxable year.
(b) Every individual who has adjusted gross income subject to thetax imposed by this article and from which tax is not withheld underthe requirements of section 8 of this chapter shall make a declarationof estimated tax for the taxable year. However, no such declarationshall be required if the estimated tax can reasonably be expected tobe less than one thousand dollars ($1,000). In the case of anunderpayment of the estimated tax as provided in Section 6654 of theInternal Revenue Code, there shall be added to the tax a penalty in anamount prescribed by IC 6-8.1-10-2.1(b).
(c) Every corporation subject to the adjusted gross income taxliability imposed by this article shall be required to report and pay anestimated tax equal to the lesser of:
(1) twenty-five percent (25%) of such corporation's estimatedadjusted gross income tax liability for the taxable year; or
(2) the annualized income installment calculated in the mannerprovided by Section 6655(e) of the Internal Revenue Code asapplied to the corporation's liability for adjusted gross incometax.
A taxpayer who uses a taxable year that ends on December 31 shallfile the taxpayer's estimated adjusted gross income tax returns andpay the tax to the department on or before April 20, June 20,September 20, and December 20 of the taxable year. If a taxpayeruses a taxable year that does not end on December 31, the due datesfor filing estimated adjusted gross income tax returns and paying thetax are on or before the twentieth day of the fourth, sixth, ninth, andtwelfth months of the taxpayer's taxable year. The department shallprescribe the manner and forms for such reporting and payment.
(d) The penalty prescribed by IC 6-8.1-10-2.1(b) shall be assessedby the department on corporations failing to make payments asrequired in subsection (c) or (f). However, no penalty shall beassessed as to any estimated payments of adjusted gross income taxwhich equal or exceed:
(1) the annualized income installment calculated undersubsection (c); or
(2) twenty-five percent (25%) of the final tax liability for thetaxpayer's previous taxable year.
In addition, the penalty as to any underpayment of tax on anestimated return shall only be assessed on the difference between theactual amount paid by the corporation on such estimated return andtwenty-five percent (25%) of the corporation's final adjusted grossincome tax liability for such taxable year.
(e) The provisions of subsection (c) requiring the reporting andestimated payment of adjusted gross income tax shall be applicableonly to corporations having an adjusted gross income tax liability
which, after application of the credit allowed by IC 6-3-3-2(repealed), shall exceed two thousand five hundred dollars ($2,500)for its taxable year.
(f) If the department determines that a corporation's:
(1) estimated quarterly adjusted gross income tax liability forthe current year; or
(2) average estimated quarterly adjusted gross income taxliability for the preceding year;
exceeds five thousand dollars ($5,000), after the credit allowed byIC 6-3-3-2 (repealed), the corporation shall pay the estimatedadjusted gross income taxes due by electronic funds transfer (asdefined in IC 4-8.1-2-7) or by delivering in person or overnight bycourier a payment by cashier's check, certified check, or money orderto the department. The transfer or payment shall be made on orbefore the date the tax is due.
(g) If a corporation's adjusted gross income tax payment is madeby electronic funds transfer, the corporation is not required to file anestimated adjusted gross income tax return.
(h) An individual filing an estimated tax return and making anestimated tax payment under this section must designate:
(1) the portion of the estimated tax payment that representsestimated state adjusted gross income tax liability; and
(2) the portion of the estimated tax payment that representsestimated local income tax liability under IC 6-3.5.
The department shall adopt guidelines and issue instructions asnecessary to assist individuals in making the designations requiredby this subsection.
As added by P.L.278-1993(ss), SEC.23. Amended by P.L.18-1994,SEC.9; P.L.19-1994, SEC.8; P.L.85-1995, SEC.10; P.L.8-1996,SEC.5; P.L.260-1997(ss), SEC.51; P.L.28-1997, SEC.14;P.L.2-1998, SEC.32; P.L.192-2002(ss), SEC.80; P.L.1-2003,SEC.36; P.L.269-2003, SEC.9; P.L.211-2007, SEC.24;P.L.131-2008, SEC.15; P.L.146-2008, SEC.319; P.L.1-2009,SEC.50.
IC 6-3-4-5
Payment of tax
Sec. 5. When a return of tax is required pursuant to sections 1 and3 of this chapter, the taxpayer required to make such return shall,without assessment or notice and demand from the department, paysuch tax to the department at the time fixed for filing the returnwithout regard to any extension of time for filing the return. Inmaking a return and paying tax for any taxable year, a taxpayer shalltake credit for any tax previously paid by him for such taxable year.
(Formerly: Acts 1963(ss), c.32, s.405.) As amended by P.L.2-1988,SEC.11.
IC 6-3-4-6
Furnishing federal return to department; notice of modification;amended returns Sec. 6. (a) Any taxpayer, upon request by the department, shallfurnish to the department a true and correct copy of any tax returnwhich he has filed with the United States Internal Revenue Servicewhich copy shall be certified to by the taxpayer under penalties ofperjury.
(b) Each taxpayer shall notify the department of any modificationof:
(1) a federal income tax return filed by the taxpayer afterJanuary 1, 1978; or
(2) the taxpayer's federal income tax liability for a taxable yearwhich begins after December 31, 1977.
The taxpayer shall file the notice, on the form prescribed by thedepartment, within one hundred twenty (120) days after themodification is made.
(c) If the federal modification results in a change in the taxpayer'sfederal or Indiana adjusted gross income, the taxpayer shall file anIndiana amended return within one hundred twenty (120) days afterthe modification is made.
(Formerly: Acts 1963(ss), c.32, s.406; Acts 1965, c.233, s.19.) Asamended by Acts 1977(ss), P.L.4, SEC.11; P.L.119-1998, SEC.5;P.L.254-2003, SEC.6.
IC 6-3-4-7
Repealed
(Repealed by Acts 1980, P.L.61, SEC.15.)
IC 6-3-4-8
Income withholding; wages; reports; earned income tax advancepayments; penalties
Sec. 8. (a) Except as provided in subsection (d) or (l), everyemployer making payments of wages subject to tax under this article,regardless of the place where such payment is made, who is requiredunder the provisions of the Internal Revenue Code to withhold,collect, and pay over income tax on wages paid by such employer tosuch employee, shall, at the time of payment of such wages, deductand retain therefrom the amount prescribed in withholdinginstructions issued by the department. The department shall base itswithholding instructions on the adjusted gross income tax rate forpersons, on the total rates of any income taxes that the taxpayer issubject to under IC 6-3.5, and on the total amount of exclusions thetaxpayer is entitled to under IC 6-3-1-3.5(a)(3) andIC 6-3-1-3.5(a)(4). However, the withholding instructions on theadjusted gross income of a nonresident alien (as defined in Section7701 of the Internal Revenue Code) are to be based on applying notmore than one (1) withholding exclusion, regardless of the totalnumber of exclusions that IC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4)permit the taxpayer to apply on the taxpayer's final return for thetaxable year. Such employer making payments of any wages:
(1) shall be liable to the state of Indiana for the payment of thetax required to be deducted and withheld under this section and
shall not be liable to any individual for the amount deductedfrom the individual's wages and paid over in compliance orintended compliance with this section; and
(2) shall make return of and payment to the department monthlyof the amount of tax which under this article and IC 6-3.5 theemployer is required to withhold.
(b) An employer shall pay taxes withheld under subsection (a)during a particular month to the department no later than thirty (30)days after the end of that month. However, in place of monthlyreporting periods, the department may permit an employer to reportand pay the tax for:
(1) a calendar year reporting period, if the average monthlyamount of all tax required to be withheld by the employer in theprevious calendar year does not exceed ten dollars ($10);
(2) a six (6) month reporting period, if the average monthlyamount of all tax required to be withheld by the employer in theprevious calendar year does not exceed twenty-five dollars($25); or
(3) a three (3) month reporting period, if the average monthlyamount of all tax required to be withheld by the employer in theprevious calendar year does not exceed seventy-five dollars($75).
An employer using a reporting period (other than a monthly reportingperiod) must file the employer's return and pay the tax for a reportingperiod no later than the last day of the month immediately followingthe close of the reporting period. If an employer files a combinedsales and withholding tax report, the reporting period for thecombined report is the shortest period required under this section,section 8.1 of this chapter, or IC 6-2.5-6-1.
(c) For purposes of determining whether an employee is subjectto taxation under IC 6-3.5, an employer is entitled to rely on thestatement of an employee as to the employee's county of residence asrepresented by the statement of address in forms claimingexemptions for purposes of withholding, regardless of when theemployee supplied the forms. Every employee shall notify theemployee's employer within five (5) days after any change in theemployee's county of residence.
(d) A county that makes payments of wages subject to tax underthis article:
(1) to a precinct election officer (as defined in IC 3-5-2-40.1);and
(2) for the performance of the duties of the precinct electionofficer imposed by IC 3 that are performed on election day;
is not required, at the time of payment of the wages, to deduct andretain from the wages the amount prescribed in withholdinginstructions issued by the department.
(e) Every employer shall, at the time of each payment made by theemployer to the department, deliver to the department a return uponthe form prescribed by the department showing:
(1) the total amount of wages paid to the employer's employees; (2) the amount deducted therefrom in accordance with theprovisions of the Internal Revenue Code;
(3) the amount of adjusted gross income tax deducted therefromin accordance with the provisions of this section;
(4) the amount of income tax, if any, imposed under IC 6-3.5and deducted therefrom in accordance with this section; and
(5) any other information the department may require.
Every employer making a declaration of withholding as provided inthis section shall furnish the employer's employees annually, but notlater than thirty (30) days after the end of the calendar year, a recordof the total amount of adjusted gross income tax and the amount ofeach income tax, if any, imposed under IC 6-3.5, withheld from theemployees, on the forms prescribed by the department.
(f) All money deducted and withheld by an employer shallimmediately upon such deduction be the money of the state, andevery employer who deducts and retains any amount of money underthe provisions of this article shall hold the same in trust for the stateof Indiana and for payment thereof to the department in the mannerand at the times provided in this article. Any employer may berequired to post a surety bond in the sum the department determinesto be appropriate to protect the state with respect to money withheldpursuant to this section.
(g) The provisions of IC 6-8.1 relating to additions to tax in caseof delinquency and penalties shall apply to employers subject to theprovisions of this section, and for these purposes any amountdeducted or required to be deducted and remitted to the departmentunder this section shall be considered to be the tax of the employer,and with respect to such amount the employer shall be considered thetaxpayer. In the case of a corporate or partnership employer, everyofficer, employee, or member of such employer, who, as such officer,employee, or member is under a duty to deduct and remit such taxesshall be personally liable for such taxes, penalties, and interest.
(h) Amounts deducted from wages of an employee during anycalendar year in accordance with the provisions of this section shallbe considered to be in part payment of the tax imposed on suchemployee for the employee's taxable year which begins in suchcalendar year, and a return made by the employer under subsection(b) shall be accepted by the department as evidence in favor of theemployee of the amount so deducted from the employee's wages.Where the total amount so deducted exceeds the amount of tax on theemployee as computed under this article and IC 6-3.5, the departmentshall, after examining the return or returns filed by the employee inaccordance with this article and IC 6-3.5, refund the amount of theexcess deduction. However, under rules promulgated by thedepartment, the excess or any part thereof may be applied to anytaxes or other claim due from the taxpayer to the state of Indiana orany subdivision thereof. No refund shall be made to an employeewho fails to file the employee's return or returns as required underthis article and IC 6-3.5 within two (2) years from the due date of thereturn or returns. In the event that the excess tax deducted is less than
one dollar ($1), no refund shall be made.
(i) This section shall in no way relieve any taxpayer from thetaxpayer's obligation of filing a return or returns at the time requiredunder this article and IC 6-3.5, and, should the amount withheldunder the provisions of this section be insufficient to pay the total taxof such taxpayer, such unpaid tax shall be paid at the time prescribedby section 5 of this chapter.
(j) Notwithstanding subsection (b), an employer of a domesticservice employee that enters into an agreement with the domesticservice employee to withhold federal income tax under Section 3402of the Internal Revenue Code may withhold Indiana income tax onthe domestic service employee's wages on the employer's Indianaindividual income tax return in the same manner as allowed bySection 3510 of the Internal Revenue Code.
(k) To the extent allowed by Section 1137 of the Social SecurityAct, an employer of a domestic service employee may report andremit state unemployment insurance contributions on the employee'swages on the employer's Indiana individual income tax return in thesame manner as allowed by Section 3510 of the Internal RevenueCode.
(l) The department shall adopt rules under IC 4-22-2 to exempt anemployer from the duty to deduct and remit from the wages of anemployee adjusted gross income tax withholding that wouldotherwise be required under this section whenever:
(1) an employee has at least one (1) qualifying child, asdetermined under Section 32 of the Internal Revenue Code;
(2) the employee is eligible for an earned income tax creditunder IC 6-3.1-21;
(3) the employee elects to receive advance payments of theearned income tax credit under IC 6-3.1-21 from money thatwould otherwise be withheld from the employee's wages foradjusted gross income taxes; and
(4) the amount that is not deducted and remitted is distributedto the employee, in accordance with the procedures prescribedby the department, as an advance payment of the earned incometax credit for which the employee is eligible under IC 6-3.1-21.
The rules must establish the procedures and reports required to carryout this subsection.
(m) A person who knowingly fails to remit trust fund money as setforth in this section commits a Class D felony.
(Formerly: Acts 1963(ss), c.32, s.408; Acts 1965, c.233, s.20; Acts1969, c.326, s.6; Acts 1971, P.L.65, SEC.1; Acts 1973, P.L.50,SEC.3.) As amended by Acts 1979, P.L.68, SEC.3; Acts 1980, P.L.61,SEC.6; Acts 1982, P.L.49, SEC.2; P.L.2-1982(ss), SEC.9;P.L.26-1985, SEC.10; P.L.70-1986, SEC.2; P.L.94-1995, SEC.1;P.L.8-1996, SEC.6; P.L.192-2002(ss), SEC.81; P.L.131-2008,SEC.16.
IC 6-3-4-8.1
Income withholding; wages; reports; earned income tax advance
payments; online tax filing; penalties
Sec. 8.1. (a) Any entity that is required to file a monthly returnand make a monthly remittance of taxes under sections 8, 12, 13, and15 of this chapter shall file those returns and make those remittancestwenty (20) days (rather than thirty (30) days) after the end of eachmonth for which those returns and remittances are filed, if thatentity's average monthly remittance for the immediately precedingcalendar year exceeds one thousand dollars ($1,000).
(b) The department may require any entity to make the entity'smonthly remittance and file the entity's monthly return twenty (20)days (rather than thirty (30) days) after the end of each month forwhich a return and payment are made if the department estimates thatthe entity's average monthly payment for the current calendar yearwill exceed one thousand dollars ($1,000).
(c) If the department determines that a withholding agent is notwithholding, reporting, or remitting an amount of tax in accordancewith this chapter, the department may require the withholding agent:
(1) to make periodic deposits during the reporting period; and
(2) to file an informational return with each periodic deposit.
(d) If a person files a combined sales and withholding tax reportand either this section or IC 6-2.5-6-1 requires the sales orwithholding tax report to be filed and remittances to be made withintwenty (20) days after the end of each month, then the person shallfile the combined report and remit the sales and withholding taxesdue within twenty (20) days after the end of each month.
(e) If the department determines that an entity's:
(1) estimated monthly withholding tax remittance for thecurrent year; or
(2) average monthly withholding tax remittance for thepreceding year;
exceeds five thousand dollars ($5,000), the entity shall remit themonthly withholding taxes due by electronic fund transfer (asdefined in IC 4-8.1-2-7) or by delivering in person or by overnightcourier a payment by cashier's check, certified check, or money orderto the department. The transfer or payment shall be made on orbefore the date the remittance is due.
(f) An entity that registers to withhold taxes after December 31,2009, shall file the withholding tax report and remit withholdingtaxes electronically through the department's online tax filingprogram.
As added by Acts 1982, P.L.49, SEC.3. Amended by P.L.70-1986,SEC.3; P.L.92-1987, SEC.4; P.L.63-1988, SEC.8; P.L.28-1997,SEC.15; P.L.254-2003, SEC.7; P.L.111-2006, SEC.3; P.L.211-2007,SEC.25; P.L.182-2009(ss), SEC.199.
IC 6-3-4-8.2
Income withholding; gambling winnings
Sec. 8.2. (a) Each person in Indiana who is required under theInternal Revenue Code to withhold federal tax from winnings shalldeduct and retain adjusted gross income tax at the time and in the
amount described in withholding instructions issued by thedepartment.
(b) In addition to amounts withheld under subsection (a), everyperson engaged in a gambling operation (as defined in IC 4-33-2-10)or a gambling game (as defined in IC 4-35-2-5) and making apayment in the course of the gambling operation (as defined inIC 4-33-2-10) or a gambling game (as defined in IC 4-35-2-5) of:
(1) winnings (not reduced by the wager) valued at one thousandtwo hundred dollars ($1,200) or more from slot machine play;or
(2) winnings (reduced by the wager) valued at one thousandfive hundred dollars ($1,500) or more from a keno game;
shall deduct and retain adjusted gross income tax at the time and inthe amount described in withholding instructions issued by thedepartment. The department's instructions must provide that amountswithheld shall be paid to the department before the close of thebusiness day following the day the winnings are paid, actually orconstructively. Slot machine and keno winnings from a gamblingoperation (as defined in IC 4-33-2-10) or a gambling game (asdefined in IC 4-35-2-5) that are reportable for federal income taxpurposes shall be treated as subject to withholding under this section,even if federal tax withholding is not required.
(c) The adjusted gross income tax due on prize money or prizes:
(1) received from a winning lottery ticket purchased underIC 4-30; and
(2) exceeding one thousand two hundred dollars ($1,200) invalue;
shall be deducted and retained at the time and in the amountdescribed in withholding instructions issued by the department, evenif federal withholding is not required.
(d) In addition to the amounts withheld under subsection (a), aqualified organization (as defined in IC 4-32.2-2-24(a)) that awardsa prize under IC 4-32.2 exceeding one thousand two hundred dollars($1,200) in value shall deduct and retain adjusted gross income taxat the time and in the amount described in withholding instructionsissued by the department. The department's instructions must providethat amounts withheld shall be paid to the department before theclose of the business day following the day the winnings are paid,actually or constructively.
As added by P.L.28-1997, SEC.16. Amended by P.L.192-2002(ss),SEC.82; P.L.91-2006, SEC.8; P.L.182-2009(ss), SEC.200.
IC 6-3-4-8.5
Liability of transferee of property
Sec. 8.5. In the case of a transferee of the property of a transferor,liability for any accrued tax liability of the transferor is transferredto the transferee as provided in section 6901 of the Internal RevenueCode.
As added by Acts 1977(ss), P.L.4, SEC.12.
IC 6-3-4-9
Reports of payment to recipients
Sec. 9. All individuals, corporations, limited liability companies,partnerships, fiduciaries, or associations, in whatever capacity acting,including but without being limited to, lessees or mortgagors of realor personal property, fiduciaries, and employers making payment toother persons of interest, rent, wages, salaries, premiums, annuities,compensation, remunerations, emoluments, other fixed ordeterminable means, profits and income, or corporate liquidationdistributions shall make returns to the department setting forth theamount of such payments and the name and address of the recipientof such payment at such time or times in such manner, and on suchforms as prescribed by the department.
(Formerly: Acts 1963(ss), c.32, s.409.) As amended by P.L.8-1993,SEC.84.
IC 6-3-4-10
Partnership returns
Sec. 10. (a) Except as provided in subsection (b), everypartnership doing business in this state, every partnership any partnerof which is a resident, and every partnership which has gross incomederived from sources within this state, shall make a return for eachtaxable year on a form to be prescribed by the department, whichreturn shall correspond with the returns required by Section 6031 ofthe Internal Revenue Code, insofar as consistent with the provisionsof this article. However, this section shall not be construed to renderany partnership a taxpayer under this article.
(b) A partnership or a corporation that is exempt from income taxunder Section 1363 of the Internal Revenue Code is not required tofile:
(1) federal income tax Schedule K-1 (Form 1065) Partner'sShare of Income, Credits, Deductions, Etc.; or
(2) federal income tax Schedule K-1 (Form 1120S)Shareholder's Share of Income, Credits, Deductions, Etc.;
with an annual return filed with the department. However, a federalincome tax schedule described in this subsection must be availablefor inspection upon request by the department.
(Formerly: Acts 1963(ss), c.32, s.410.) As amended by P.L.2-1987,SEC.20; P.L.18-1994, SEC.10.
IC 6-3-4-11
Partnerships not subject to tax
Sec. 11. (a) A partnership as such shall not be subject to theadjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7.Persons or corporations carrying on business as partners shall beliable for the adjusted gross income tax only in their separate orindividual capacities. In determining each partner's adjusted grossincome, such partner shall take into account his or its distributiveshare of the adjustments provided for in IC 6-3-1-3.5.
(b) The adjustments provided for in IC 6-3-1-3.5 shall be allowed
for the taxable year of the partner within or with which thepartnership's taxable year ends.
(Formerly: Acts 1963(ss), c.32, s.411; Acts 1965, c.233, s.21.) Asamended by Acts 1980, P.L.54, SEC.5.
IC 6-3-4-12
Nonresident partners; withholding rate; returns; credits for taxwithheld
Sec. 12. (a) Every partnership shall, at the time that thepartnership pays or credits amounts to any of its nonresident partnerson account of their distributive shares of partnership income, for ataxable year of the partnership, deduct and retain therefrom theamount prescribed in the withholding instructions referred to insection 8 of this chapter. Such partnership so paying or crediting anynonresident partner:
(1) shall be liable to the state of Indiana for the payment of thetax required to be deducted and retained under this section andshall not be liable to such partner for the amount deducted fromsuch payment or credit and paid over in compliance or intendedcompliance with this section; and
(2) shall make return of and payment to the department monthlywhenever the amount of tax due under IC 6-3 and IC 6-3.5exceeds an aggregate amount of fifty dollars ($50) per monthwith such payment due on the thirtieth day of the followingmonth, unless an earlier date is specified by section 8.1 of thischapter.
Where the aggregate amount due under IC 6-3 and IC 6-3.5 does notexceed fifty dollars ($50) per month, then such partnership shallmake return and payment to the department quarterly, on such datesand in such manner as the department shall prescribe, of the amountof tax which, under IC 6-3 and IC 6-3.5, it is required to withhold.
(b) Every partnership shall, at the time of each payment made byit to the department pursuant to this section, deliver to the departmenta return upon such form as shall be prescribed by the departmentshowing the total amounts paid or credited to its nonresidentpartners, the amount deducted therefrom in accordance with theprovisions of this section, and such other information as thedepartment may require. Every partnership making the deduction andretention provided in this section shall furnish to its nonresidentpartners annually, but not later than thirty (30) days after the end ofits taxable year, a record of the amount of tax deducted and retainedfrom such partners on forms to be prescribed by the department.
(c) All money deducted and retained by the partnership, asprovided in this section, shall immediately upon such deduction bethe money of the state of Indiana and every partnership whichdeducts and retains any amount of money under the provisions ofIC 6-3 shall hold the same in trust for the state of Indiana and forpayment thereof to the department in the manner and at the timesprovided in IC 6-3. Any partnership may be required to post a suretybond in such sum as the department shall determine to be appropriate
to protect the state of Indiana with respect to money deducted andretained pursuant to this section.
(d) The provisions of IC 6-8.1 relating to additions to tax in caseof delinquency and penalties shall apply to partnerships subject tothe provisions of this section, and for these purposes any amountdeducted, or required to be deducted and remitted to the departmentunder this section, shall be considered to be the tax of thepartnership, and with respect to such amount it shall be consideredthe taxpayer.
(e) Amounts deducted from payments or credits to a nonresidentpartner during any taxable year of the partnership in accordance withthe provisions of this section shall be considered to be in partpayment of the tax imposed on such nonresident partner for histaxable year within or with which the partnership's taxable year ends.A return made by the partnership under subsection (b) shall beaccepted by the department as evidence in favor of the nonresidentpartner of the amount so deducted for his distributive share.
(f) This section shall in no way relieve any nonresident partnerfrom his obligations of filing a return or returns at the time requiredunder IC 6-3 or IC 6-3.5, and any unpaid tax shall be paid at the timeprescribed by section 5 of this chapter.
(g) Instead of the reporting periods required under subsection (a),the department may permit a partnership to file one (1) return andpayment each year if the partnership pays or credits amounts to itsnonresident partners only one (1) time each year. The return andpayment are due not more than thirty (30) days after the end of theyear.
(h) A partnership shall file a composite adjusted gross income taxreturn on behalf of all nonresident individual partners. Thecomposite return must include each nonresident individual partnerregardless of whether or not the nonresident individual partner hasother Indiana source income.
(i) If a partnership does not include all nonresident partners in thecomposite return, the partnership is subject to the penalty imposedunder IC 6-8.1-10-2.1(j).
(Formerly: Acts 1963(ss), c.32, s.412; Acts 1965, c.233, s.22; Acts1969, c.326, s.7; Acts 1971, P.L.65, SEC.2; Acts 1973, P.L.50,SEC.4.) As amended by Acts 1979, P.L.68, SEC.4; Acts 1982, P.L.49,SEC.4; P.L.2-1982(ss), SEC.10; P.L.23-1986, SEC.3; P.L.211-2007,SEC.26.
IC 6-3-4-13
Corporations; withholding from dividends to nonresidentshareholders
Sec. 13. (a) Every corporation which is exempt from tax underIC 6-3 pursuant to IC 6-3-2-2.8(2) shall, at the time that it pays orcredits amounts to any of its nonresident shareholders as dividendsor as their share of the corporation's undistributed taxable income,withhold the amount prescribed by the department. Such corporationso paying or crediting any nonresident shareholder: (1) shall be liable to the state of Indiana for the payment of thetax required to be withheld under this section and shall not beliable to such shareholder for the amount withheld and paidover in compliance or intended compliance with this section;and
(2) when the aggregate amount due under IC 6-3 and IC 6-3.5exceeds one hundred fifty dollars ($150) per quarter, then suchcorporation shall make return and payment to the departmentquarterly, on such dates and in such manner as the departmentshall prescribe, of the amount of tax which, under IC 6-3 andIC 6-3.5, it is required to withhold.
(b) Every corporation shall, at the time of each payment made byit to the department pursuant to this section, deliver to the departmenta return upon such form as shall be prescribed by the departmentshowing the total amounts paid or credited to its nonresidentshareholders, the amount withheld in accordance with the provisionsof this section, and such other information as the department mayrequire. Every corporation withholding as provided in this sectionshall furnish to its nonresident shareholders annually, but not laterthan the fifteenth day of the third month after the end of its taxableyear, a record of the amount of tax withheld on behalf of suchshareholders on forms to be prescribed by the department.
(c) All money withheld by a corporation, pursuant to this section,shall immediately upon being withheld be the money of the state ofIndiana and every corporation which withholds any amount of moneyunder the provisions of this section shall hold the same in trust forthe state of Indiana and for payment thereof to the department in themanner and at the times provided in IC 6-3. Any corporation may berequired to post a surety bond in such sum as the department shalldetermine to be appropriate to protect the state of Indiana withrespect to money withheld pursuant to this section.
(d) The provisions of IC 6-8.1 relating to additions to tax in caseof delinquency and penalties shall apply to corporations subject tothe provisions of this section, and for these purposes any amountwithheld, or required to be withheld and remitted to the departmentunder this section, shall be considered to be the tax of thecorporation, and with respect to such amount it shall be consideredthe taxpayer.
(e) Amounts withheld from payments or credits to a nonresidentshareholder during any taxable year of the corporation in accordancewith the provisions of this section shall be considered to be a partpayment of the tax imposed on such nonresident shareholder for histaxable year within or with which the corporation's taxable year ends.A return made by the corporation under subsection (b) shall beaccepted by the department as evidence in favor of the nonresidentshareholder of the amount so withheld from the shareholder'sdistributive share.
(f) This section shall in no way relieve any nonresidentshareholder from the shareholder's obligation of filing a return orreturns at the time required under IC 6-3 or IC 6-3.5, and any unpaid
tax shall be paid at the time prescribed by section 5 of this chapter.
(g) Instead of the reporting periods required under subsection (a),the department may permit a corporation to file one (1) return andpayment each year if the corporation pays or credits amounts to itsnonresident shareholders only one (1) time each year. Thewithholding return and payment are due on or before the fifteenthday of the third month after the end of the taxable year of thecorporation.
(h) If a distribution will be made with property other than moneyor a gain is realized without the payment of money, the corporationshall not release the property or credit the gain until it has fundssufficient to enable it to pay the tax required to be withheld underthis section. If necessary, the corporation shall obtain such fundsfrom the shareholders.
(i) If a corporation fails to withhold and pay any amount of taxrequired to be withheld under this section and thereafter the tax ispaid by the shareholders, such amount of tax as paid by theshareholders shall not be collected from the corporation but it shallnot be relieved from liability for interest or penalty otherwise due inrespect to such failure to withhold under IC 6-8.1-10.
(j) A corporation described in subsection (a) shall file a compositeadjusted gross income tax return on behalf of all nonresidentshareholders. The composite return must include each nonresidentindividual shareholder regardless of whether or not the nonresidentindividual shareholder has other Indiana source income.
(k) If a corporation described in subsection (a) does not includeall nonresident shareholders in the composite return, the corporationis subject to the penalty imposed under IC 6-8.1-10-2.1(j).
(Formerly: Acts 1963(ss), c.32, s.413; Acts 1965, c.233, s.23; Acts1969, c.326, s.8; Acts 1971, P.L.65, SEC.3; Acts 1973, P.L.50,SEC.5.) As amended by Acts 1979, P.L.68, SEC.5; Acts 1982, P.L.49,SEC.5; P.L.2-1982(ss), SEC.11; P.L.23-1986, SEC.4; P.L.18-1994,SEC.11; P.L.2-1995, SEC.32; P.L.211-2007, SEC.27.
IC 6-3-4-14
Affiliated group of corporations; consolidated returns
Sec. 14. (a) An affiliated group of corporations shall have theprivilege of making a consolidated return with respect to the taxesimposed by IC 6-3. The making of a consolidated return shall beupon the condition that all corporations which at any time during thetaxable year have been members of the affiliated group consent to allof the provisions of this section including all provisions of theconsolidated return regulations prescribed pursuant to Section 1502of the Internal Revenue Code and incorporated herein by referenceand all regulations promulgated by the department implementing thissection prior to the last day prescribed by law for the filing of suchreturn. The making of a consolidated return shall be considered assuch consent. In the case of a corporation which is a member of theaffiliated group for a fractional part of the year, the consolidatedreturn shall include the income of such corporation for such part of
the year as it is a member of the affiliated group.
(b) For the purposes of this section the term "affiliated group"shall mean an "affiliated group" as defined in Section 1504 of theInternal Revenue Code with the exception that the affiliated groupshall not include any corporation which does not have adjusted grossincome derived from sources within the state of Indiana.
(c) For purposes of IC 6-3-1-3.5(b), the determination of "taxableincome," as defined in Section 63 of the Internal Revenue Code, ofany affiliated group of corporations making a consolidated return andof each corporation in the group, both during and after the period ofaffiliation, shall be determined pursuant to the regulations prescribedunder Section 1502 of the Internal Revenue Code.
(d) Any credit against the taxes imposed by IC 6-3 which isavailable to any corporation which is a member of an affiliated groupof corporations making a consolidated return shall be applied againstthe tax liability of the affiliated group.
(Formerly: Acts 1963(ss), c.32, s.414; Acts 1965, c.233, s.24.) Asamended by Acts 1980, P.L.54, SEC.6.
IC 6-3-4-15
Trusts or estates; distribution of income to nonresidentbeneficiaries; deduction, retention, and pay over of tax due;returns required
Sec. 15. (a) A trust or estate shall, at the time that it distributesincome (except income attributable to interest or dividends) to anonresident beneficiary, deduct and retain therefrom the amountprescribed in the withholding instructions referred to in section 8 ofthis chapter. The trust or estate so distributing income to anonresident beneficiary:
(1) is liable to this state for the tax which it is required to deductand retain under this section and is not liable to the beneficiaryfor the amount deducted from the distribution and paid to thedepartment in compliance, or intended compliance, with thissection; and
(2) shall pay the amount deducted to the department before thethirtieth day of the month following the distribution, unless anearlier date is specified by section 8.1 of this chapter.
(b) A trust or estate shall, at the time that it makes a payment tothe department under this section, deliver to the department a returnwhich shows the total amounts distributed to the trust's or estate'snonresident beneficiaries, the amount deducted from the distributionsunder this section, and any other information required by thedepartment. The trust or estate shall file the return on the formprescribed by the department. A trust or estate which makes thededuction and retention required by this section shall furnish to itsnonresident beneficiaries annually, but not later than thirty (30) daysafter the end of the trust's or estate's taxable year, a record of theamount of tax deducted and retained from the beneficiaries. The trustor estate shall furnish the information on the form prescribed by thedepartment. (c) The money deducted and retained by a trust or estate underthis section is money of this state. Every trust or estate which deductsand retains any money under this section shall hold the money intrust for this state until it pays the money to the department in themanner and at the time provided in this section. The department mayrequire a trust or estate to post a surety bond to protect this state withrespect to money deducted and retained by the trust or estate underthis section. The department shall determine the amount of the suretybond.
(d) The provisions of IC 6-8.1 relating to penalties or to additionsto tax in case of a delinquency apply to trusts and estates which aresubject to this section. For purposes of this subsection, any amountdeducted, or required to be deducted and remitted to the department,under this section is considered the tax of the trust or estate, and withrespect to that amount, it is considered the taxpayer.
(e) Amounts deducted from distributions to nonresidentbeneficiaries under this section during a taxable year of the trust orestate are considered a partial payment of the tax imposed on thenonresident beneficiary for his taxable year within or with which thetrust's or estate's taxable year ends. The department shall accept areturn made by the trust or estate under subsection (b) as evidence ofthe amount of tax deducted from the income distributed to anonresident beneficiary.
(f) This section does not relieve a nonresident beneficiary of hisduty to file a return at the time required under IC 6-3. Thenonresident beneficiary shall pay any unpaid tax at the timeprescribed by section 5 of this chapter.
As added by Acts 1977(ss), P.L.4, SEC.13. Amended by Acts 1979,P.L.68, SEC.6; Acts 1982, P.L.49, SEC.6; P.L.2-1982(ss), SEC.12.
IC 6-3-4-15.7
Annuity, pension, retirement, or other deferred compensationplans; withholding requests; payor responsibility; guidelines;designation of local income tax liability
Sec. 15.7. (a) The payor of a periodic or nonperiodic distributionunder an annuity, a pension, a retirement, or other deferredcompensation plan, as described in Section 3405 of the InternalRevenue Code, that is paid to a resident of this state shall, uponreceipt from the payee of a written request for state income taxwithholding, withhold the requested amount from each payment. Therequest must:
(1) be dated and signed by the payee;
(2) specify the flat whole dollar amount to be withheld fromeach payment;
(3) designate the portion of the withheld amount that representsestimated state adjusted gross income tax liability and theportion of the withheld amount that represents estimated localincome tax liability under IC 6-3.5; and
(4) specify the payee's name, current address, taxpayeridentification number, and the contract, policy, or account
number to which the request applies.
The request shall remain in effect until the payor receives in writingfrom the payee a change in or revocation of the request. Thedepartment shall adopt guidelines and issue instructions as necessaryto assist individuals in making the designations required bysubdivision (3).
(b) The payor is not required to withhold state income tax from apayment if the amount to be withheld is less than ten dollars ($10) orif the amount to be withheld would reduce the affected payment toless than ten dollars ($10).
(c) The payor is responsible for custody of withheld funds, forreporting withheld funds to the state and to the payee, and forremitting withheld funds to the state in the same manner as is donefor wage withholding, including utilization of federal forms andparticipation by Indiana in the combined Federal/State FilingProgram on magnetic media.
As added by P.L.91-1989, SEC.1. Amended by P.L.146-2008,SEC.320.
IC 6-3-4-16
Procedures to implement crosschecks between certain forms
Sec. 16. For individual income tax returns filed after December31, 2010, the department shall develop procedures to implement asystem of crosschecks between:
(1) employer WH-3 forms (annual withholding tax reports) withaccompanying W-2 forms; and
(2) individual taxpayer W-2 forms.
As added by P.L.146-2008, SEC.321.
IC 6-3-4-16.5
Electronic filing; withholding
Sec. 16.5. (a) This section applies to:
(1) Form W-2 federal income tax withholding statements; and
(2) Form WH-3 annual withholding tax reports;
filed with the department after December 31, 2010.
(b) If an employer or any person or entity acting on behalf of anemployer files more than twenty-five (25) Form W-2 federal incometax withholding statements with the department in a calendar year,all Form W-2 federal income tax withholding statements and FormWH-3 annual withholding tax reports filed with the department inthat calendar year by the employer or the person or entity acting onbehalf of the employer must be filed in an electronic format specifiedby the department.
As added by P.L.113-2010, SEC.57.
IC 6-3-4-17
Quarterly reports concerning local income taxes
Sec. 17. Beginning after December 31, 2010, the department andthe office of management and budget shall:
(1) develop a quarterly report that summarizes the amount
reported to and processed by the department under section4.1(h) of this chapter, section 15.7(a)(3) of this chapter,IC 6-3.5-1.1-18(c), IC 6-3.5-6-22(c), IC 6-3.5-7-18(c), andIC 6-3.5-8-22(c) for each county; and
(2) make the quarterly report available to county auditors withinforty-five (45) days after the end of the calendar quarter.
As added by P.L.146-2008, SEC.322.