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Lake County Indiana ISO or ESPP disqualify disposition income report

Lake County local tax in Indiana requires report ISO or ESPP disqualify disposition income on w2 but not require to withholding tax. However, our payroll provider doesn't have option to report but not withholding local tax. Can employee claim the refund from county if we withholding local tax?



  • I am not expert on all payroll systems, but I can very safely say that ADP 30 years ago would have had no problem with this and that I am very skeptical that any modern program including ADP would have had problems with this. If we were talking about ADP and they have not changed things in the "tax grid", then this would be very easily addressed there.

    I have no idea about how the hundreds of other modern payroll systems handle this but this was very basic functionality 30 years ago and likely still is. Maybe you need to talk to someone else at your provider. Or use smaller words.

  • Quick follow up. In the 1980s getting local tax withholding and calculation right was very easy. Getting the tax returns right, not so much. ADP basically punted on local tax filing and returns - not their problem. Now I have been retired for a while, and I would very much like to think that ADP has improved this hole in their service but maybe not. But absolutely worst case on a brand new local tax that ADP had never heard of was that you had to fill out tax calculation instructions, then pay ADP to customize this brand new tax into their system, then flip the right switches on the tax grid to enable your custom calculation. But was back when, ADP did the withholding but getting the money to the right people and filing the right forms was entirely up to the employer. Over time ADP was supposed to be increasing the number of "canned" local tax calculations and keeping them current. I always hoped they would would just handle all them start to finish, but this did not happen while I was working.

    Long, long time for me but basically ADP had library of local tax functions, say tens of thousands. There a maximum number of local taxes enabled on the employers system, maybe ten, maybe 1 hundred, who knows. But ADP charged a small amount of one time money to enable an existing local tax function against a specific "switch" in the employer's system. Say LOCAL01. A lot more money to create a new local tax from scratch. But once it is in their local tax library, same deal. They enable LOCAL01 to hook into whatever specific jurisdictions taxes that you specify. Then you tell your tax grid exactly what you done for all earnings/deductions by LOCAL01,