Indiana offers a vibrant environment for business with over 591,000 small businesses, employing 43% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Indiana is crucial. This guide provides an overview of the various taxes small businesses in Indiana must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Indiana
Business owners in Indiana may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Corporate Adjusted Gross Income Tax
Applicable Entities: C corporations, S corporations, and entities with C corp elections
Tax Rate: 4.9%
Filing Requirements: File Form IT-20 for C corporations by the 15th day of the fifth month after the tax year or Form IT-20S for S corporations by the 15th day of the fourth month after the tax year.
Estimated Payments: Required if annual unpaid liability is at least $2,500. Payments are due quarterly on April 20, June 20, Sept. 20, and Dec. 20.
Pass-Through Entity (PTE) Tax
Applicable Entities: Partnerships, S corporations, and LLCs taxed as an S corporation or partnership
Tax Rate: 3.00%
Filing Requirements:Schedule PTET must be filed by the 15th day of the fourth month following the close of the tax year.
Estimated Payments: File Form IT-6WTH online to make estimated payments. Payments are due quarterly on April 20, June 20, September 20, and December 20.
Sales and Use Tax
Applicable Activities: Sales of goods and tangible personal property
Tax Rate: 7%
Filing Requirements: File ST-103 online monthly, quarterly, or annually based on sales volume.
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: 3.00% (county income tax withholding also required)
Filing Requirements: File Form WH-1 online annually, monthly, or early monthly based on withholding amounts, by the 30th day after the end of the period for annual or monthly filers or the 20th day after the period for early-monthly filers.
Unemployment Insurance Tax
Applicable Entities: Employers with employees
Tax Rate: Varies based on the business’s experience rating
Wage Base: $9,500 per employee per year
Filing Requirements: You must file quarterly reports online by April 30, July 31, October 31, and January 31.
Personal Property Tax
Applicable Entities: Businesses using personal property
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by May 15.
Nonresident Withholding Tax
Applicable Entities: Pass-through entities with nonresident members
Tax Rate: 3.00% on distributive share income
Filing Requirements: File Form IT-6WTH quarterly online by April 15, June 15, September 15, and January 15 of the following year..
How to File and Pay Indiana Business Taxes
Business taxes in Indiana can be filed and paid through various methods:
Online Filing and Payment: Use the Indiana Taxpayer Information Management Engine (INTIME) for electronic submissions and payments.
Mail: Send forms and payments to the address indicated (where applicable).
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Adjusted Gross Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends for S corporations and the 15th day of the fifth month after the tax year for C corporations.
Estimated Tax Payments: Due quarterly on April 20, June 20, September 20, and December 20.
Sales and Use Tax Returns: Monthly, quarterly, or annual filing based on sales volume.
Withholding Tax Returns: Due annually, monthly, or early monthly based on withholding amounts, by the 30th day after the end of the period for annual or monthly filers or the 20th day after the period for early-monthly filers.
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Indiana offers several tax credits and incentives for small businesses, including:
Patent Income Tax Exemption: This exemption is available to certain businesses in Indiana with no more than 500 employees for up to 10 years per qualified utility and plant patent. The total amount of exemptions claimed each year may not exceed $5 million.
Hoosier Business Investment Tax Credit: This credit is available to eligible businesses for projects that create new jobs. It is a nonrefundable corporate income tax credit calculated as a percentage of the eligible capital investment to support the project.
Headquarters Relocation Tax Credit: This credit is available to corporations that relocate their headquarters to Indiana. The Small Headquarters Relocation Tax Credit provides a refundable tax credit to a small, high-growth business that relocates its headquarters or 80% of its total payroll to Indiana.
Research and Development Tax Credit: Available to eligible businesses for Indiana-qualified research expenses. The credit equals 15% of the qualified research expenses that exceed a base amount, up to $1 million. A credit of up to 10% is available for any excess of qualified research expenses over the base amount greater than $1 million. Indiana also offers a 100% sales tax exemption for qualified research and development equipment and property purchased.
Indiana’s business tax breakdown by business type
Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | PTE tax | Corporate income tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the PTE tax election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Indiana small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
Indiana Small Business Taxes: The Employer’s 2024 Guide
Indiana offers a vibrant environment for business with over 537,000 small businesses, employing 44% of the state’s workforce. Whether you’re an established business owner or planning to start a new venture, understanding the tax landscape in Indiana is crucial. This guide provides an overview of the various taxes small businesses in Indiana must navigate, including tax rates, filing requirements, and deadlines.
Types of Business Taxes in Indiana
Business owners in Indiana may be subject to various taxes depending on their business structure, activities, and revenue. Here’s a breakdown of the main types of taxes:
Corporate Adjusted Gross Income Tax
Applicable Entities: C corporations, S corporations, and entities with C corp elections
Tax Rate: 4.9%
Filing Requirements: File Form IT-20 for C corporations by the 15th day of the fifth month after the tax year or Form IT-20S for S corporations by the 15th day of the fourth month after the tax year.
Estimated Payments: Required if annual unpaid liability is at least $2,500. Payments are due quarterly on April 20, June 20, Sept. 20, and Dec. 20.
Pass-Through Entity (PTE) Tax
Applicable Entities: Partnerships, S corporations, and LLCs taxed as an S corporation or partnership
Tax Rate: 3.05%
Filing Requirements:Schedule PTET must be filed by the 15th day of the fourth month following the close of the tax year.
Estimated Payments: For 2024 only, file Form IT-6WTH online to make a single estimated payment of at least 50% of the tax liability by the end of the tax year (quarterly payments will be required after 2024).
Sales and Use Tax
Applicable Activities: Sales of goods and tangible personal property
Tax Rate: 7%
Filing Requirements: File ST-103 online monthly, quarterly, or annually based on sales volume.
Withholding Tax
Applicable Entities: Employers with employees
Tax Rate: 3.05% (county income tax withholding also required)
Filing Requirements: File Form WH-1 online annually, monthly, or early monthly based on withholding amounts, by the 30th day after the end of the period for annual or monthly filers or the 20th day after the period for early-monthly filers.
Unemployment Insurance Tax
Applicable Entities: Employers with employees
Tax Rate: Varies based on business’s experience rating
Wage Base: $9,500 per employee per year
Filing Requirements: You must file quarterly reports online by April 30, July 31, October 31, and January 31.
Personal Property Tax
Applicable Entities: Businesses using personal property
Tax Rate: Based on property type and value
Filing Requirements: Report annually to the county assessor by May 15.
Nonresident Withholding Tax
Applicable Entities: Pass-through entities with nonresident members
Tax Rate: 3.05% on distributive share income
Filing Requirements: File Form IT-6WTH by the 15th day of the fourth month following the close of the tax year.
How to File and Pay Indiana Business Taxes
Business taxes in Indiana can be filed and paid through various methods:
Online Filing and Payment: Use the Indiana Taxpayer Information Management Engine (INTIME) for electronic submissions and payments.
Mail: Send forms and payments to the address indicated (where applicable).
Important Deadlines
Keep track of these key dates to avoid penalties:
Corporate Adjusted Gross Income Tax Returns: Due by the 15th day of the fourth month after the tax year ends for S corporations and the 15th day of the fifth month after the tax year for C corporations.
Estimated Tax Payments: Due quarterly on April 20, June 20, September 20, and December 20.
Sales and Use Tax Returns: Monthly, quarterly, or annual filing based on sales volume.
Withholding Tax Returns: Due annually, monthly, or early monthly based on withholding amounts, by the 30th day after the end of the period for annual or monthly filers or the 20th day after the period for early-monthly filers.
Unemployment Insurance Reports: Due quarterly by April 30, July 31, October 31, and January 31.
Tax Credits and Incentives
Indiana offers several tax credits and incentives for small businesses, including:
Patent Income Tax Exemption: This exemption is available to certain businesses in Indiana with no more than 500 employees for up to 10 years per qualified utility and plant patent. The total amount of exemptions claimed each year may not exceed $5 million.
Hoosier Business Investment Tax Credit: This credit is available to eligible businesses for projects that create new jobs. It is a nonrefundable corporate income tax credit calculated as a percentage of the eligible capital investment to support the project.
Headquarters Relocation Tax Credit: This credit is available to corporations that relocate their headquarters to Indiana. The Small Headquarters Relocation Tax Credit provides a refundable tax credit to a small, high-growth business that relocates its headquarters or 80% of its total payroll to Indiana.
Research and Development Tax Credit: Available to eligible businesses for Indiana-qualified research expenses. The credit equals 15% of the qualified research expenses that exceed a base amount, up to $1 million. A credit of up to 10% is available for any excess of qualified research expenses over the base amount greater than $1 million. Indiana also offers a 100% sales tax exemption for qualified research and development equipment and property purchased.
Indiana’s business tax breakdown by business type
Business taxes can be complicated, so we’ve included a chart below that breaks down the taxes that different business structures usually pay.
Keep in mind that pass-through entities don’t pay federal income taxes themselves—the obligation is passed on to their business owners or shareholders, who pay them through their personal income tax returns.
Business type | Personal income tax | PTE tax | Corporate income tax | Sales and use tax | Withholding tax | Unemployment tax | Federal income taxes |
C corporation | No | No | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes |
S corporation | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | Yes | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
LLC | Yes (pass-through), if not making the PTE tax election | Depends on how it’s structured | Depends on how it’s structured | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Partnership | Yes (pass-through), if not making the PTE tax election | Yes, if it makes the election | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes (pass-through) |
Sole proprietorship | Yes (pass-through) | No | No | Yes, if applicable | Yes, if you hire employees | Yes, if you hire employees | Yes, by way of individual income tax |
File your Indiana small business taxes with Gusto
As a business owner, your time and energy are valuable, finite resources. So instead of managing your taxes manually, let Gusto give you a hand. Our easy-to-use software automatically files all your payroll taxes each time you run payroll—freeing up your bandwidth for the work that matters most.
Learn how else Gusto can simplify the operations of your small business by creating an account today.
