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 be
made by the following:
(1) Every resident individual having for the taxable year gross
income in an amount greater than the modifications provided
under 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 any
gross income from sources within the state of Indiana, except
for a team member (as defined in IC 6-3-2-2.7) who is covered
by a composite return filed under IC 6-3-2-2.7.
(3) Every corporation having for the taxable year any gross
income from sources within the state of Indiana.
(4) Every resident estate having for the taxable year any gross
income from sources within the state of Indiana.
(5) Every resident trust having for the taxable year any gross
income from sources within the state of Indiana.
(6) Every nonresident estate having for the taxable year any
gross income from sources within the state of Indiana.
(7) Every nonresident trust having for the taxable year any gross
income from sources within the state of Indiana.
(Formerly: Acts 1963(ss), c.32, s.401; Acts 1965, c.233, s.16.) As
amended 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 year
the professional preparer shall file returns for persons described in
section 1(1) or 1(2) of this chapter in an electronic format specified
by the department.
(b) A professional preparer described in subsection (a) is not
required to file a return in an electronic format if the taxpayer
requests in writing that the return not be filed in an electronic format.
Returns filed by a professional preparer under this subsection shall
not be used in determining the professional preparer's requirement to
file returns in an electronic format.
(c) After December 31, 2010, a professional preparer who does
not comply with subsection (a) is subject to a penalty of fifty dollars
($50) for each return not filed in an electronic format, with a
maximum penalty of twenty-five thousand dollars ($25,000) per
calendar 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 such
individual 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 such
individual shall be made by a duly authorized agent, the individual's
committee, guardian, fiduciary, or other person charged with the care
of the person or property of such individual.
(c) Returns of an estate or a trust shall be made by the fiduciary
thereof.
(d) Where a joint return is made by husband and wife pursuant to
the Internal Revenue Code, a joint return shall be made pursuant to
this article. Where a joint return is filed by a husband and wife
hereunder, one spouse shall have no liability for the tax imposed by
this article upon the income of the other spouse.
(e) Where separate returns are made by husband and wife
pursuant to the Internal Revenue Code, separate returns shall be
made pursuant to this article.
(Formerly: Acts 1963(ss), c.32, s.402; Acts 1965, c.233, s.17.) As
amended 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 this
chapter shall be filed with the department on or before the 15th day
of 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 funds
transfer
Sec. 4.1. (a) Any individual required by the Internal Revenue
Code to file estimated tax returns and to make payments on account
of such estimated tax shall file estimated tax returns and make
payments of the tax imposed by this article to the department at the
time or times and in the installments as provided by Section 6654 of
the Internal Revenue Code. However, the following apply to
estimated tax returns filed and payments made under this subsection:
(1) In applying Section 6654 of the Internal Revenue Code for
the purposes of this article, "estimated tax" means the amount
which the individual estimates as the amount of the adjusted
gross income tax imposed by this article for the taxable year,
minus the amount which the individual estimates as the sum of
any 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 by
applying not more than one (1) exclusion under
IC 6-3-1-3.5(a)(3) and IC 6-3-1-3.5(a)(4), regardless of the total
number 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 the taxable year.
(b) Every individual who has adjusted gross income subject to the
tax imposed by this article and from which tax is not withheld under
the requirements of section 8 of this chapter shall make a declaration
of estimated tax for the taxable year. However, no such declaration
shall be required if the estimated tax can reasonably be expected to
be less than one thousand dollars ($1,000). In the case of an
underpayment of the estimated tax as provided in Section 6654 of the
Internal Revenue Code, there shall be added to the tax a penalty in an
amount prescribed by IC 6-8.1-10-2.1(b).
(c) Every corporation subject to the adjusted gross income tax
liability imposed by this article shall be required to report and pay an
estimated tax equal to the lesser of:
(1) twenty-five percent (25%) of such corporation's estimated
adjusted gross income tax liability for the taxable year; or
(2) the annualized income installment calculated in the manner
provided by Section 6655(e) of the Internal Revenue Code as
applied to the corporation's liability for adjusted gross income
tax.
A taxpayer who uses a taxable year that ends on December 31 shall
file the taxpayer's estimated adjusted gross income tax returns and
pay the tax to the department on or before April 20, June 20,
September 20, and December 20 of the taxable year. If a taxpayer
uses a taxable year that does not end on December 31, the due dates
for filing estimated adjusted gross income tax returns and paying the
tax are on or before the twentieth day of the fourth, sixth, ninth, and
twelfth months of the taxpayer's taxable year. The department shall
prescribe the manner and forms for such reporting and payment.
(d) The penalty prescribed by IC 6-8.1-10-2.1(b) shall be assessed
by the department on corporations failing to make payments as
required in subsection (c) or (f). However, no penalty shall be
assessed as to any estimated payments of adjusted gross income tax
which equal or exceed:
(1) the annualized income installment calculated under
subsection (c); or
(2) twenty-five percent (25%) of the final tax liability for the
taxpayer's previous taxable year.
In addition, the penalty as to any underpayment of tax on an
estimated return shall only be assessed on the difference between the
actual amount paid by the corporation on such estimated return and
twenty-five percent (25%) of the corporation's final adjusted gross
income tax liability for such taxable year.
(e) The provisions of subsection (c) requiring the reporting and
estimated payment of adjusted gross income tax shall be applicable
only 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 for
the current year; or
(2) average estimated quarterly adjusted gross income tax
liability for the preceding year;
exceeds five thousand dollars ($5,000), after the credit allowed by
IC 6-3-3-2 (repealed), the corporation shall pay the estimated
adjusted gross income taxes due by electronic funds transfer (as
defined in IC 4-8.1-2-7) or by delivering in person or overnight by
courier a payment by cashier's check, certified check, or money order
to the department. The transfer or payment shall be made on or
before the date the tax is due.
(g) If a corporation's adjusted gross income tax payment is made
by electronic funds transfer, the corporation is not required to file an
estimated adjusted gross income tax return.
(h) An individual filing an estimated tax return and making an
estimated tax payment under this section must designate:
(1) the portion of the estimated tax payment that represents
estimated state adjusted gross income tax liability; and
(2) the portion of the estimated tax payment that represents
estimated local income tax liability under IC 6-3.5.
The department shall adopt guidelines and issue instructions as
necessary to assist individuals in making the designations required
by 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 and
3 of this chapter, the taxpayer required to make such return shall,
without assessment or notice and demand from the department, pay
such tax to the department at the time fixed for filing the return
without regard to any extension of time for filing the return. In
making a return and paying tax for any taxable year, a taxpayer shall
take 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, shall
furnish to the department a true and correct copy of any tax return
which he has filed with the United States Internal Revenue Service
which copy shall be certified to by the taxpayer under penalties of
perjury.
(b) Each taxpayer shall notify the department of any modification
of:
(1) a federal income tax return filed by the taxpayer after
January 1, 1978; or
(2) the taxpayer's federal income tax liability for a taxable year
which begins after December 31, 1977.
The taxpayer shall file the notice, on the form prescribed by the
department, within one hundred twenty (120) days after the
modification is made.
(c) If the federal modification results in a change in the taxpayer's
federal or Indiana adjusted gross income, the taxpayer shall file an
Indiana amended return within one hundred twenty (120) days after
the modification is made.
(Formerly: Acts 1963(ss), c.32, s.406; Acts 1965, c.233, s.19.) As
amended 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 advance
payments; penalties
Sec. 8. (a) Except as provided in subsection (d) or (l), every
employer making payments of wages subject to tax under this article,
regardless of the place where such payment is made, who is required
under the provisions of the Internal Revenue Code to withhold,
collect, and pay over income tax on wages paid by such employer to
such employee, shall, at the time of payment of such wages, deduct
and retain therefrom the amount prescribed in withholding
instructions issued by the department. The department shall base its
withholding instructions on the adjusted gross income tax rate for
persons, on the total rates of any income taxes that the taxpayer is
subject to under IC 6-3.5, and on the total amount of exclusions the
taxpayer is entitled to under IC 6-3-1-3.5(a)(3) and
IC 6-3-1-3.5(a)(4). However, the withholding instructions on the
adjusted gross income of a nonresident alien (as defined in Section
7701 of the Internal Revenue Code) are to be based on applying not
more than one (1) withholding exclusion, regardless of the total
number 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 the
taxable year. Such employer making payments of any wages:
(1) shall be liable to the state of Indiana for the payment of the
tax required to be deducted and withheld under this section and
shall not be liable to any individual for the amount deducted
from the 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.
(e) Every employer shall, at the time of each payment made by the
employer to the department, deliver to the department a return upon
the 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 the
provisions of the Internal Revenue Code;
(3) the amount of adjusted gross income tax deducted therefrom
in accordance with the provisions of this section;
(4) the amount of income tax, if any, imposed under IC 6-3.5
and 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 in
this section shall furnish the employer's employees annually, but not
later than thirty (30) days after the end of the calendar year, a record
of the total amount of adjusted gross income tax and the amount of
each income tax, if any, imposed under IC 6-3.5, withheld from the
employees, on the forms prescribed by the department.
(f) All money deducted and withheld by an employer shall
immediately upon such deduction be the money of the state, and
every employer who deducts and retains any amount of money under
the provisions of this article shall hold the same in trust for the state
of Indiana and for payment thereof to the department in the manner
and at the times provided in this article. Any employer may be
required to post a surety bond in the sum the department determines
to be appropriate to protect the state with respect to money withheld
pursuant to this section.
(g) The provisions of IC 6-8.1 relating to additions to tax in case
of delinquency and penalties shall apply to employers subject to the
provisions of this section, and for these purposes any amount
deducted or required to be deducted and remitted to the department
under this section shall be considered to be the tax of the employer,
and with respect to such amount the employer shall be considered the
taxpayer. In the case of a corporate or partnership employer, every
officer, employee, or member of such employer, who, as such officer,
employee, or member is under a duty to deduct and remit such taxes
shall be personally liable for such taxes, penalties, and interest.
(h) Amounts deducted from wages of an employee during any
calendar year in accordance with the provisions of this section shall
be considered to be in part payment of the tax imposed on such
employee for the employee's taxable year which begins in such
calendar year, and a return made by the employer under subsection
(b) shall be accepted by the department as evidence in favor of the
employee of the amount 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
(4) the amount that is not deducted and remitted is distributed
to the employee, in accordance with the procedures prescribed
by the department, as an advance payment of the earned income
tax credit for which the employee is eligible under IC 6-3.1-21.
The rules must establish the procedures and reports required to carry
out this subsection.
(m) A person who knowingly fails to remit trust fund money as set
forth in this section commits a Class D felony.
(Formerly: Acts 1963(ss), c.32, s.408; Acts 1965, c.233, s.20; Acts
1969, 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 return
and make a monthly remittance of taxes under sections 8, 12, 13, and
15 of this chapter shall file those returns and make those remittances
twenty (20) days (rather than thirty (30) days) after the end of each
month for which those returns and remittances are filed, if that
entity's average monthly remittance for the immediately preceding
calendar year exceeds one thousand dollars ($1,000).
(b) The department may require any entity to make the entity's
monthly remittance and file the entity's monthly return twenty (20)
days (rather than thirty (30) days) after the end of each month for
which a return and payment are made if the department estimates that
the entity's average monthly payment for the current calendar year
will exceed one thousand dollars ($1,000).
(c) If the department determines that a withholding agent is not
withholding, reporting, or remitting an amount of tax in accordance
with 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 report
and either this section or IC 6-2.5-6-1 requires the sales or
withholding tax report to be filed and remittances to be made within
twenty (20) days after the end of each month, then the person shall
file the combined report and remit the sales and withholding taxes
due 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 the
current year; or
(2) average monthly withholding tax remittance for the
preceding year;
exceeds five thousand dollars ($5,000), the entity shall remit the
monthly withholding taxes due by electronic fund transfer (as
defined in IC 4-8.1-2-7) or by delivering in person or by overnight
courier a payment by cashier's check, certified check, or money order
to the department. The transfer or payment shall be made on or
before 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 withholding
taxes electronically through the department's online tax filing
program.
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 the
Internal Revenue Code to withhold federal tax from winnings shall
deduct and retain adjusted gross income tax at the time and in the
amount described in withholding instructions issued by the
department.
(b) In addition to amounts withheld under subsection (a), every
person 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 a
payment in the course of the gambling operation (as defined in
IC 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 thousand
two hundred dollars ($1,200) or more from slot machine play;
or
(2) winnings (reduced by the wager) valued at one thousand
five hundred dollars ($1,500) or more from a keno game;
shall deduct and retain adjusted gross income tax at the time and in
the amount described in withholding instructions issued by the
department. The department's instructions must provide that amounts
withheld shall be paid to the department before the close of the
business day following the day the winnings are paid, actually or
constructively. Slot machine and keno winnings from a gambling
operation (as defined in IC 4-33-2-10) or a gambling game (as
defined in IC 4-35-2-5) that are reportable for federal income tax
purposes 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 under
IC 4-30; and
(2) exceeding one thousand two hundred dollars ($1,200) in
value;
shall be deducted and retained at the time and in the amount
described in withholding instructions issued by the department, even
if federal withholding is not required.
(d) In addition to the amounts withheld under subsection (a), a
qualified organization (as defined in IC 4-32.2-2-24(a)) that awards
a prize under IC 4-32.2 exceeding one thousand two hundred dollars
($1,200) in value shall deduct and retain adjusted gross income tax
at the time and in the amount described in withholding instructions
issued by the department. The department's instructions must provide
that amounts withheld shall be paid to the department before the
close 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 transferred
to the transferee as provided in section 6901 of the Internal Revenue
Code.
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 real
or personal property, fiduciaries, and employers making payment to
other persons of interest, rent, wages, salaries, premiums, annuities,
compensation, remunerations, emoluments, other fixed or
determinable means, profits and income, or corporate liquidation
distributions shall make returns to the department setting forth the
amount of such payments and the name and address of the recipient
of such payment at such time or times in such manner, and on such
forms 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), every
partnership doing business in this state, every partnership any partner
of which is a resident, and every partnership which has gross income
derived from sources within this state, shall make a return for each
taxable year on a form to be prescribed by the department, which
return shall correspond with the returns required by Section 6031 of
the Internal Revenue Code, insofar as consistent with the provisions
of this article. However, this section shall not be construed to render
any partnership a taxpayer under this article.
(b) A partnership or a corporation that is exempt from income tax
under Section 1363 of the Internal Revenue Code is not required to
file:
(1) federal income tax Schedule K-1 (Form 1065) Partner's
Share 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 federal
income tax schedule described in this subsection must be available
for 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 the
adjusted gross income tax imposed by IC 6-3-1 through IC 6-3-7.
Persons or corporations carrying on business as partners shall be
liable for the adjusted gross income tax only in their separate or
individual capacities. In determining each partner's adjusted gross
income, such partner shall take into account his or its distributive
share 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 the
partnership's taxable year ends.
(Formerly: Acts 1963(ss), c.32, s.411; Acts 1965, c.233, s.21.) As
amended by Acts 1980, P.L.54, SEC.5.
IC 6-3-4-12
Nonresident partners; withholding rate; returns; credits for tax
withheld
Sec. 12. (a) Every partnership shall, at the time that the
partnership pays or credits amounts to any of its nonresident partners
on account of their distributive shares of partnership income, for a
taxable year of the partnership, deduct and retain therefrom the
amount prescribed in the withholding instructions referred to in
section 8 of this chapter. Such partnership so paying or crediting any
nonresident partner:
(1) shall be liable to the state of Indiana for the payment of the
tax required to be deducted and retained under this section and
shall not be liable to such partner for the amount deducted from
such payment or credit and paid over in compliance or intended
compliance with this section; and
(2) shall make return of and payment to the department monthly
whenever the amount of tax due under IC 6-3 and IC 6-3.5
exceeds an aggregate amount of fifty dollars ($50) per month
with such payment due on the thirtieth day of the following
month, unless an earlier date is specified by section 8.1 of this
chapter.
Where the aggregate amount due under IC 6-3 and IC 6-3.5 does not
exceed fifty dollars ($50) per month, then such partnership shall
make return and payment to the department quarterly, on such dates
and in such manner as the department shall prescribe, of the amount
of 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 by
it to the department pursuant to this section, deliver to the department
a return upon such form as shall be prescribed by the department
showing the total amounts paid or credited to its nonresident
partners, the amount deducted therefrom in accordance with the
provisions of this section, and such other information as the
department may require. Every partnership making the deduction and
retention provided in this section shall furnish to its nonresident
partners annually, but not later than thirty (30) days after the end of
its taxable year, a record of the amount of tax deducted and retained
from such partners on forms to be prescribed by the department.
(c) All money deducted and retained by the partnership, as
provided in this section, shall immediately upon such deduction be
the money of the state of Indiana and every partnership which
deducts and retains any amount of money under the provisions of
IC 6-3 shall hold the same in trust for the state of Indiana and for
payment thereof to the department in the manner and at the times
provided in IC 6-3. Any partnership may be required to post a surety
bond in such sum as the department shall determine to be appropriate
to protect the state of Indiana with respect to money deducted and
retained pursuant to this section.
(d) The provisions of IC 6-8.1 relating to additions to tax in case
of delinquency and penalties shall apply to partnerships subject to
the provisions of this section, and for these purposes any amount
deducted, or required to be deducted and remitted to the department
under this section, shall be considered to be the tax of the
partnership, and with respect to such amount it shall be considered
the taxpayer.
(e) Amounts deducted from payments or credits to a nonresident
partner during any taxable year of the partnership in accordance with
the provisions of this section shall be considered to be in part
payment of the tax imposed on such nonresident partner for his
taxable year within or with which the partnership's taxable year ends.
A return made by the partnership under subsection (b) shall be
accepted by the department as evidence in favor of the nonresident
partner of the amount so deducted for his distributive share.
(f) This section shall in no way relieve any nonresident partner
from his obligations of filing a return or returns 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 partnership to file one (1) return and
payment each year if the partnership pays or credits amounts to its
nonresident partners only one (1) time each year. The return and
payment are due not more than thirty (30) days after the end of the
year.
(h) A partnership shall file a composite adjusted gross income tax
return on behalf of all nonresident individual partners. The
composite return must include each nonresident individual partner
regardless of whether or not the nonresident individual partner has
other Indiana source income.
(i) If a partnership does not include all nonresident partners in the
composite return, the partnership is subject to the penalty imposed
under IC 6-8.1-10-2.1(j).
(Formerly: Acts 1963(ss), c.32, s.412; Acts 1965, c.233, s.22; Acts
1969, 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 nonresident
shareholders
Sec. 13. (a) Every corporation which is exempt from tax under
IC 6-3 pursuant to IC 6-3-2-2.8(2) shall, at the time that it pays or
credits amounts to any of its nonresident shareholders as dividends
or as their share of the corporation's undistributed taxable income,
withhold the amount prescribed by the department. Such corporation
so paying or crediting any nonresident shareholder:
(1) shall be liable to the state of Indiana for the payment of the
tax required to be withheld under this section and shall not be
liable to such shareholder for the amount withheld and paid
over in compliance or intended compliance with this section;
and
(2) when the aggregate amount due under IC 6-3 and IC 6-3.5
exceeds one hundred fifty dollars ($150) per quarter, then such
corporation shall make return and payment to the department
quarterly, on such dates and in such manner as the department
shall prescribe, of the amount of tax which, under IC 6-3 and
IC 6-3.5, it is required to withhold.
(b) Every corporation shall, at the time of each payment made by
it to the department pursuant to this section, deliver to the department
a return upon such form as shall be prescribed by the department
showing the total amounts paid or credited to its nonresident
shareholders, the amount withheld in accordance with the provisions
of this section, and such other information as the department may
require. Every corporation withholding as provided in this section
shall furnish to its nonresident shareholders annually, but not later
than the fifteenth day of the third month after the end of its taxable
year, a record of the amount of tax withheld on behalf of such
shareholders 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 of
Indiana and every corporation which withholds any amount of money
under the provisions of this section shall hold the same in trust for
the state of Indiana and for payment thereof to the department in the
manner and at the times provided in IC 6-3. Any corporation may be
required to post a surety bond in such sum as the department shall
determine to be appropriate to protect the state of Indiana with
respect to money withheld pursuant to this section.
(d) The provisions of IC 6-8.1 relating to additions to tax in case
of delinquency and penalties shall apply to corporations subject to
the provisions of this section, and for these purposes any amount
withheld, or required to be withheld and remitted to the department
under this section, shall be considered to be the tax of the
corporation, and with respect to such amount it shall be considered
the taxpayer.
(e) Amounts withheld from payments or credits to a nonresident
shareholder during any taxable year of the corporation in accordance
with the provisions of this section shall be considered to be a part
payment of the tax imposed on such nonresident shareholder for his
taxable year within or with which the corporation's taxable year ends.
A return made by the corporation under subsection (b) shall be
accepted by the department as evidence in favor of the nonresident
shareholder of the amount so withheld from the shareholder's
distributive share.
(f) This section shall in no way relieve any nonresident
shareholder from the shareholder's obligation of filing a return or
returns 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 and
payment each year if the corporation pays or credits amounts to its
nonresident shareholders only one (1) time each year. The
withholding return and payment are due on or before the fifteenth
day of the third month after the end of the taxable year of the
corporation.
(h) If a distribution will be made with property other than money
or a gain is realized without the payment of money, the corporation
shall not release the property or credit the gain until it has funds
sufficient to enable it to pay the tax required to be withheld under
this section. If necessary, the corporation shall obtain such funds
from the shareholders.
(i) If a corporation fails to withhold and pay any amount of tax
required to be withheld under this section and thereafter the tax is
paid by the shareholders, such amount of tax as paid by the
shareholders shall not be collected from the corporation but it shall
not be relieved from liability for interest or penalty otherwise due in
respect to such failure to withhold under IC 6-8.1-10.
(j) A corporation described in subsection (a) shall file a composite
adjusted gross income tax return on behalf of all nonresident
shareholders. The composite return must include each nonresident
individual shareholder regardless of whether or not the nonresident
individual shareholder has other Indiana source income.
(k) If a corporation described in subsection (a) does not include
all nonresident shareholders in the composite return, the corporation
is 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; Acts
1969, 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 the
privilege of making a consolidated return with respect to the taxes
imposed by IC 6-3. The making of a consolidated return shall be
upon the condition that all corporations which at any time during the
taxable year have been members of the affiliated group consent to all
of the provisions of this section including all provisions of the
consolidated return regulations prescribed pursuant to Section 1502
of the Internal Revenue Code and incorporated herein by reference
and all regulations promulgated by the department implementing this
section prior to the last day prescribed by law for the filing of such
return. The making of a consolidated return shall be considered as
such consent. In the case of a corporation which is a member of the
affiliated group for a fractional part of the year, the consolidated
return 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 the
Internal Revenue Code with the exception that the affiliated group
shall not include any corporation which does not have adjusted gross
income derived from sources within the state of Indiana.
(c) For purposes of IC 6-3-1-3.5(b), the determination of "taxable
income," as defined in Section 63 of the Internal Revenue Code, of
any affiliated group of corporations making a consolidated return and
of each corporation in the group, both during and after the period of
affiliation, shall be determined pursuant to the regulations prescribed
under Section 1502 of the Internal Revenue Code.
(d) Any credit against the taxes imposed by IC 6-3 which is
available to any corporation which is a member of an affiliated group
of corporations making a consolidated return shall be applied against
the tax liability of the affiliated group.
(Formerly: Acts 1963(ss), c.32, s.414; Acts 1965, c.233, s.24.) As
amended by Acts 1980, P.L.54, SEC.6.
IC 6-3-4-15
Trusts or estates; distribution of income to nonresident
beneficiaries; deduction, retention, and pay over of tax due;
returns required
Sec. 15. (a) A trust or estate shall, at the time that it distributes
income (except income attributable to interest or dividends) to a
nonresident beneficiary, deduct and retain therefrom the amount
prescribed in the withholding instructions referred to in section 8 of
this chapter. The trust or estate so distributing income to a
nonresident beneficiary:
(1) is liable to this state for the tax which it is required to deduct
and retain under this section and is not liable to the beneficiary
for the amount deducted from the distribution and paid to the
department in compliance, or intended compliance, with this
section; and
(2) shall pay the amount deducted to the department before the
thirtieth day of the month following the distribution, unless an
earlier date is specified by section 8.1 of this chapter.
(b) A trust or estate shall, at the time that it makes a payment to
the department under this section, deliver to the department a return
which shows the total amounts distributed to the trust's or estate's
nonresident beneficiaries, the amount deducted from the distributions
under this section, and any other information required by the
department. The trust or estate shall file the return on the form
prescribed by the department. A trust or estate which makes the
deduction and retention required by this section shall furnish to its
nonresident beneficiaries annually, but not later than thirty (30) days
after the end of the trust's or estate's taxable year, a record of the
amount of tax deducted and retained from the beneficiaries. The trust
or estate shall furnish the information on the form prescribed by the
department.
(c) The money deducted and retained by a trust or estate under
this section is money of this state. Every trust or estate which deducts
and retains any money under this section shall hold the money in
trust for this state until it pays the money to the department in the
manner and at the time provided in this section. The department may
require a trust or estate to post a surety bond to protect this state with
respect to money deducted and retained by the trust or estate under
this section. The department shall determine the amount of the surety
bond.
(d) The provisions of IC 6-8.1 relating to penalties or to additions
to tax in case of a delinquency apply to trusts and estates which are
subject to this section. For purposes of this subsection, any amount
deducted, or required to be deducted and remitted to the department,
under this section is considered the tax of the trust or estate, and with
respect to that amount, it is considered the taxpayer.
(e) Amounts deducted from distributions to nonresident
beneficiaries under this section during a taxable year of the trust or
estate are considered a partial payment of the tax imposed on the
nonresident beneficiary for his taxable year within or with which the
trust's or estate's taxable year ends. The department shall accept a
return made by the trust or estate under subsection (b) as evidence of
the amount of tax deducted from the income distributed to a
nonresident beneficiary.
(f) This section does not relieve a nonresident beneficiary of his
duty to file a return at the time required under IC 6-3. The
nonresident beneficiary shall pay any unpaid tax at the time
prescribed 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 compensation
plans; withholding requests; payor responsibility; guidelines;
designation of local income tax liability
Sec. 15.7. (a) The payor of a periodic or nonperiodic distribution
under an annuity, a pension, a retirement, or other deferred
compensation plan, as described in Section 3405 of the Internal
Revenue Code, that is paid to a resident of this state shall, upon
receipt from the payee of a written request for state income tax
withholding, withhold the requested amount from each payment. The
request must:
(1) be dated and signed by the payee;
(2) specify the flat whole dollar amount to be withheld from
each payment;
(3) designate the portion of the withheld amount that represents
estimated state adjusted gross income tax liability and the
portion of the withheld amount that represents estimated local
income tax liability under IC 6-3.5; and
(4) specify the payee's name, current address, taxpayer
identification number, and the contract, policy, or account
number to which the request applies.
The request shall remain in effect until the payor receives in writing
from the payee a change in or revocation of the request. The
department shall adopt guidelines and issue instructions as necessary
to assist individuals in making the designations required by
subdivision (3).
(b) The payor is not required to withhold state income tax from a
payment if the amount to be withheld is less than ten dollars ($10) or
if the amount to be withheld would reduce the affected payment to
less than ten dollars ($10).
(c) The payor is responsible for custody of withheld funds, for
reporting withheld funds to the state and to the payee, and for
remitting withheld funds to the state in the same manner as is done
for wage withholding, including utilization of federal forms and
participation by Indiana in the combined Federal/State Filing
Program 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 December
31, 2010, the department shall develop procedures to implement a
system of crosschecks between:
(1) employer WH-3 forms (annual withholding tax reports) with
accompanying 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 an
employer files more than twenty-five (25) Form W-2 federal income
tax withholding statements with the department in a calendar year,
all Form W-2 federal income tax withholding statements and Form
WH-3 annual withholding tax reports filed with the department in
that calendar year by the employer or the person or entity acting on
behalf of the employer must be filed in an electronic format specified
by 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 and
the office of management and budget shall:
(1) develop a quarterly report that summarizes the amount
reported to and processed by the department under section
4.1(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), and
IC 6-3.5-8-22(c) for each county; and
(2) make the quarterly report available to county auditors within
forty-five (45) days after the end of the calendar quarter.
As added by P.L.146-2008, SEC.322.