The Indiana Department of Revenue announced that 12 counties have changed their local withholding income tax rates effective January 1, 2018.

See recently released Departmental Notice #1 for the local income tax rates effective January 1, 2018. The local income taxes collected by Indiana counties are combined into one local income tax rate per county.

The changes effective January 1, 2018 to local income tax rates are as follows:

— Bartholomew County: 0.0175, increased from 0.0125
— Carroll County: 0.020733, increased from 0.017039
— Daviess County: 0.015, decreased from 0.0175
— Decatur County: 0.0235, increased from 0.0133
— Greene County: 0.0175, increased from 0.0125
— Howard County: 0.0175, increased from 0.0165
— Martin County: 0.0175, increased from 0.015
— Montgomery County: 0.023, increased from 0.021
— Orange County: 0.0175, increased from 0.0125
— Putnam County: 0.02, increased from 0.0175
— Scott County: 0.0216, increased from 0.0141
— Vanderburgh County: 0.012, increased from 0.01

See Tax Alert 2017-1701, for the localities with rate changes as of October 1, 2017.

Local income tax rates consolidated

As we previously reported, 2015 HB 1485 required that local income taxes collected by Indiana counties be consolidated into one local income tax rate per county, effective January 1, 2017. The bill also required that both residents and nonresidents living and/or working in the county pay at one local income tax rate, increasing the local taxes paid by nonresidents.

For more information, see Department Notice #42.

State income tax rate decreased beginning in 2017

As we previously reported, the state individual income tax rate was reduced from 3.4% to 3.3% effective for calendar years 2015 and 2016, and was further reduced to 3.23% for 2017 and later years. (HB 1001, PL 205, signed by the governor on May 8, 2013.)

2017 Form W-2 filing reminders

Employers reporting 25 or more 2017 Forms W-2 are required to electronically file the annual withholding reconciliation (Form WH-3) and corresponding Forms W-2. The Department does not consider filings on diskette, CD, or DVD, accompanied by a paper WH-3 to be electronic filing. EFW2 files are considered electronic when uploaded using the Department's INtax website or its Bulk FTP site. The Department will not accept 3480 or 3490 cartridges.

The deadline for filing the 2017 Forms W-2 is January 31, 2018.

For more information, see the Form W-2 specifications.

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