Indiana Code 22-4-17-2.5. Filing; income taxes
(1) Unemployment compensation is subject to federal, state, and local income taxes.
Terms Used In Indiana Code 22-4-17-2.5
- United States: includes the District of Columbia and the commonwealths, possessions, states in free association with the United States, and the territories. See Indiana Code 1-1-4-5
(3) The individual may elect to have income taxes withheld from the individual’s payment of unemployment compensation. If an election is made, the department shall withhold federal income tax at the applicable rate provided in the Internal Revenue Code.
(4) After December 31, 2011, the individual may elect to have state adjusted gross income tax imposed under IC 6-3 and the local income tax imposed under IC 6-3.6 deducted and withheld from the individual’s payment of unemployment compensation. If an election is made, the department shall withhold state adjusted gross income tax imposed under IC 6-3 and the local income tax imposed under IC 6-3.6 at the applicable rate prescribed in withholding instructions issued by the department of state revenue.
(5) An individual is allowed to change an election made under this section.
(b) Money withheld from unemployment compensation under this section shall remain in the unemployment fund until transferred to the federal taxing authority or the state (as appropriate) for payment of income taxes.
(c) The commissioner shall follow all procedures of the United States Department of Labor, the Internal Revenue Service, and the department of state revenue concerning the withholding of income taxes.
(d) Money shall be deducted and withheld in accordance with the priorities established in regulations developed by the commissioner.
As added by P.L.166-1996, SEC.4. Amended by P.L.3-2008, SEC.159; P.L.2-2011, SEC.15; P.L.197-2016, SEC.118.