Skip to content
statelinetax.comChecker

Live in Utah, Work in Indiana: Which State Taxes Your Paycheck?

Both states — credit offsets the double taxIndiana withholds

Answer

Indiana withholds and Utah credits. Without an agreement between them, both states are entitled to tax income earned in Indiana by a Utah resident. The mechanism that stops you paying twice is the credit on the Utah resident return, which is why the Indiana return has to be completed first.

Last verified

Without an agreement between Utah and Indiana, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Indiana figure is an input to the Utah return, so completing Utah first means doing it twice.

A Utah resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule TC-40S. The credit is capped at the Utah tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.

Indiana also has a layer below the state one, and it is the layer that survives every agreement: Every Indiana county levies its own income tax, and the reciprocal agreements do not cover it. A resident of a reciprocal state who works in Indiana still pays Indiana county tax on those wages.

What you file

  1. 1Nonresident return · IndianaForm IT-40PNR

    File the Indiana nonresident return FIRST — you need the Indiana tax figure before you can complete Utah.

  2. 2Resident return · UtahSchedule TC-40S

    File a Utah resident return reporting all income, then claim the credit for tax paid to Indiana. The credit is capped at what Utah would have charged on that same income, so if Indiana taxes it at a higher rate the difference is not refunded.

The two states, side by side

 UtahIndiana
Taxes wagesYes — flatYes — flat
Reciprocity partnersNone5 (Form WH-47)
Convenience ruleNoNo
Nonresident returnForm TC-40 with Schedule TC-40BForm IT-40PNR
Credit for other-state taxSchedule TC-40SSchedule 6 (Form IT-40PNR)
Nonresident safe harbourNone publishedNone published
Local income taxNoYes
Revenue departmentUtah State Tax CommissionIndiana Department of Revenue
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Indiana and working in Utah gives:Both states — credit offsets the double tax.

Indiana to Utah →

Same two states, different situation

The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.

Other Utah pairs

Questions people actually ask

I live in Utah and work in Indiana. Which state takes the tax out of my paycheck?

Indiana withholds and Utah credits. Without an agreement between them, both states are entitled to tax income earned in Indiana by a Utah resident. The mechanism that stops you paying twice is the credit on the Utah resident return, which is why the Indiana return has to be completed first.

Which state should my employer be withholding for?

Indiana. The wages are sourced to Indiana, so Indiana withholding is correct and there is no Utah withholding to set up.

Will I end up paying tax twice on the same income?

Not twice over, but you will pay the higher of the two rates. Utah gives residents a credit for tax paid to Indiana on the same income, claimed on Schedule TC-40S. The credit is capped at the Utah tax on that income, so if Indiana taxes it more heavily the excess is not refunded by either state.

How current is this?

The Utah and Indiana rules on this page were last checked against Utah State Tax Commission and Indiana Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.

Sources

Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.