Employees live out-of-state? Reciprocal tax agreement
If an employee lives in Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin, but works in Indiana, that employee can file
form WH-47 to be
exempt from Indiana income taxes and non-resident filing.
As an employer, you may
voluntarily collect taxes for that employee's home state. If you want to do this,
obtain a state employer ID number from that state, withhold taxes and remit them to the state. If you do not want to
do this, do not withhold state taxes from that employee. The employee must obtain the forms to pay
quarterly estimated taxes to his/her home state. (Please note that the employee is still an Indiana employee, so you should be
paying Indiana unemployment tax for this employee.)
If you want to voluntarily withhold for other states, click on the state below for forms and information. You will need to select from the drop-down under Employer Requirements Kit.
Kentucky
Michigan
Ohio
Pennsylvania
Wisconsin
If your employee lives in a state not listed above but works in Indiana, you must withhold Indiana taxes and that employee must complete Indiana non-resident income tax forms.
