Citations Affected: IC 6-3; noncode.
Synopsis: Verification of withholding exemptions. Requires an
employer to verify that an employee is entitled to claim adjusted gross
income tax withholding exemptions for more than four individuals.
Provides that unless an employer knows an employee's representations
are false, the requirement for an employer to verify any additional
withholding exemptions claimed by an employee is met if the employer
obtains for each additional individual for whom the employee claims
a withholding exemption a copy of any document specified in the
statute, including a driver's license or Social Security card. Provides
that an employee's submission of a false or fictitious document to an
employer for the purpose of claiming more withholding exemptions
than the employee is entitled to claim is a Class A misdemeanor.
Provides that if an employer determines that an employee has provided
false information, the employer shall notify the employee that the
employee may be committing a Class A misdemeanor.
Effective: January 1, 2008.
January 11, 2007, read first time and referred to Committee on Rules and Legislative
January 23, 2007, amended; reassigned to Committee on Tax and Fiscal Policy.
February 15, 2007, reported favorably _ Do Pass.
February 22, 2007, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
individual's wages and paid over in compliance or intended
compliance with this section; and
(2) shall make return of and payment to the department monthly of the amount of tax which under this article and IC 6-3.5 the employer 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 monthly reporting periods, the department may permit an employer to report and pay the tax for:
(1) a calendar year reporting period, if the average monthly amount of all tax required to be withheld by the employer in the previous calendar year does not exceed ten dollars ($10);
(2) a six (6) month reporting period, if the average monthly amount of all tax required to be withheld by the employer in the previous calendar year does not exceed twenty-five dollars ($25); or
(3) a three (3) month reporting period, if the average monthly amount of all tax required to be withheld by the employer in the previous calendar year does not exceed seventy-five dollars ($75).
An employer using a reporting period (other than a monthly reporting period) must file the employer's return and pay the tax for a reporting period no later than the last day of the month immediately following the close of the reporting period. If an employer files a combined sales and withholding tax report, the reporting period for the combined 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 subject to taxation under IC 6-3.5, an employer is entitled to rely on the statement of an employee as to the employee's county of residence as represented by the statement of address in forms claiming exemptions for purposes of withholding, regardless of when the employee supplied the forms. Every employee shall notify the employee's employer within five (5) days after any change in the employee's county of residence.
(d) A county that makes payments of wages subject to tax under this 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 election officer imposed by IC 3 that are performed on election day;
is not required, at the time of payment of the wages, to deduct and retain from the wages the amount prescribed in withholding instructions issued by the department.
so deducted from the employee's wages. Where the total amount so
deducted exceeds the amount of tax on the employee as computed
under this article and IC 6-3.5, the department shall, after examining
the return or returns filed by the employee in accordance with this
article and IC 6-3.5, refund the amount of the excess deduction.
However, under rules promulgated by the department, the excess or any
part thereof may be applied to any taxes or other claim due from the
taxpayer to the state of Indiana or any subdivision thereof. No refund
shall be made to an employee who fails to file the employee's return or
returns as required under this article and IC 6-3.5 within two (2) years
from the due date of the return 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 the taxpayer's obligation of filing a return or returns at the time required under this article and IC 6-3.5, and, should the amount withheld under the provisions of this section be insufficient to pay the total tax of such taxpayer, such unpaid tax shall be paid at the time prescribed by section 5 of this chapter.
(j) Notwithstanding subsection (b), an employer of a domestic service employee that enters into an agreement with the domestic service employee to withhold federal income tax under Section 3402 of the Internal Revenue Code may withhold Indiana income tax on the domestic service employee's wages on the employer's Indiana individual income tax return in the same manner as allowed by Section 3510 of the Internal Revenue Code.
(k) To the extent allowed by Section 1137 of the Social Security Act, an employer of a domestic service employee may report and remit state unemployment insurance contributions on the employee's wages on the employer's Indiana individual income tax return in the same manner as allowed by Section 3510 of the Internal Revenue Code.
(l) The department shall adopt rules under IC 4-22-2 to exempt an employer from the duty to deduct and remit from the wages of an employee adjusted gross income tax withholding that would otherwise be required under this section whenever:
(1) an employee has at least one (1) qualifying child, as determined under Section 32 of the Internal Revenue Code;
(2) the employee is eligible for an earned income tax credit under IC 6-3.1-21;
(3) the employee elects to receive advance payments of the earned income tax credit under IC 6-3.1-21 from money that would otherwise be withheld from the employee's wages for adjusted gross income taxes; and