45 IAC 3.1-1-99 Withholding for church and clergy

Authority: IC 6-8.1-3-3

Affected: IC 6-3-4

Sec. 99. Withholding Instructions for Church and Clergy. Ministers are not subject to the withholding tax but may allow their tax to be withheld on a voluntary basis. Those ministers whose Indiana adjusted gross income tax liability is $100.00 in excess of any taxes withheld must file a Declaration of Estimated Tax on Form IT-40ES by April 15.

Every withholding agent who employs any persons in the performance of personal service is subject to the same rules and regulations contained in the Internal Revenue Code. Even though a minister may or may not choose to have the tax withheld on his own salary, others employed by the church in the performance of a personal service must pay withholding tax and the church would act as the withholding agent.

Liability of Withholding Agent:

(1) Each church is liable for the tax which is required to be withheld.

(2) Each church is required to keep correct records of each person's income and tax withheld.

(3) At the end of every calendar year, each church is required to give each person a statement of his income and tax withheld.

(4) Each church is required to make quarterly returns on forms prescribed by the Department, such forms to be mailed, together with remittance of the tax to the Department of Revenue.

(Department of State Revenue; Reg 6-3-4-8(030); filed Oct 15, 1979, 11:15 am: 2 IR 1548; errata, 2 IR 1743)