Updated October 16, 2026. Quick answer: Only if you ask. Indiana law requires withholding from a pension or annuity payment only if you request it, and Form WH-4P is the request: “I request voluntary income tax withholding from my annuity or pension payments”.
More on public pension systems, topic by topic: Indiana 1977 Fund disability retirement, Indiana 1977 Fund reemployment and Indiana 1977 Fund COLA.
Indiana pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | No. Indiana withholds only if you request it in writing |
| Default rate if you give the payer no form | No default. You choose a flat whole-dollar amount per payment, and the total must be $10 or more |
| Lump sum or one-time payment | The Department’s bulletin applies the same request-only rule to periodic and nonperiodic payments and gives no separate lump-sum rate |
| Form to start, change or stop it | Form WH-4P (State Form 37365), given to the payer (not to the Department of Revenue) |
| Changed for 2026? | No change stated; the form read is the November 2025 revision |
What the Indiana documents say
Indiana’s Information Bulletin #13 explains that a payer must withhold state and county income tax from a resident’s pension or annuity payment only when the payee asks in writing. Form WH-4P is the written request.
On the form you enter a flat dollar amount per payment, and the form says the total of the two amounts you add must be $10 or more. The bulletin says the request “remains valid until the payee changes or revokes the authorization in writing”. The form is given to the payer, not to the Department of Revenue.
The authority the Department cites is IC 6-3-4-15.7.
What a mover should know
This page is about Indiana as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in Indiana covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The documents read give no default rate and no separate lump-sum rate. The bulletin read is from 2022.
Common mistakes
- Assuming the payer is withholding for the state because it withholds for the IRS: in a voluntary state nothing is withheld until you give the payer the state’s form.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in Indiana, Indiana retirement taxes, whether Indiana taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Form WH-4P, Annuitant’s Request for State and County Income Tax Withholding (R4 / 11-25): https://forms.in.gov/Download.aspx?id=2464
- Income Tax Information Bulletin #13: Withholding of Adjusted Gross Income Tax on Retirement Pay: https://secure.in.gov/dor/files/ib13.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.