Question

Indiana State Tax Withholding Rate 2026

Forum|Forum|6 months ago
December 24, 2025
2 replies
16 views

Hello Intuit,

I would like to know why the latest payroll release (22601 version 12192100) does not include the change in the Indiana State Withholding tax rate. It was 3% in 2025 and will be 2.95% in 2026. Indiana enacted an annual decline in the rate a few years ago. Every year it is like February before the rate is changed in an update. Why is that, you know what it is (and just a heads up, it will be 2.90% in 2027). I looked at what was included in the 22601 update, there were a whole bunch of changes to a bunch of State rates for an effective date of 1/1/26. Why wasn't Indiana included in this? We have known for years what the rate will be for 2026. Can Intuit get this fixed before next weeks payroll so we don't have to do the crazy steps to adjust every paycheck until the update comes through. Or better yet, give us the option to edit the rate. Currently we cannot change the State rate, it has to come from an Intuit update.

Also, the default county for a new employee setup had a rate change. I can't find where I can change the default. Obviously I can override it in the EE file but I would like to change the default rate (it currently defaults to Allen at 1.48% but the rate s/b 1.59%)

Thank you for any assistance

M

MichaelaS

QuickBooks Team

Hi there.

Thank you for reaching out with your concerns. I can understand your being concerned, especially when these updates create additional work on your end. I'd like to provide some clarity on the changes to the Indiana tax rate for 2026 and about overriding the county rate.

Regarding the Indiana state tax, the changes depend on each state’s go signal for QuickBooks to update the rate. QuickBooks will implement these changes effective in 2026. Please note that the latest payroll release mentioned (22601 version 12192100) is the latest tax table update for 2025.

As with the state tax, the county tax has no option to change the default rate. You can only override it in the employee's profile.

Please let us know if you have any other questions or concerns.