Indiana legislation · 2026 Regular Session
Indiana HB1047: Regulation of payroll service providers.
Status: In committee, January 8, 2026
Requires a payroll service provider to provide the option to a business client that would allow the business client to hold the business client's funds in a bank account that is: (1) owned by the business client (as opposed to the payroll service provider's bank account); and (2) insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund. Requires a payroll service provider to obtain a performance bond equal to the amount of the business client's total annual estimated payroll taxes.
What the bill says
A bill FOR AN ACT to amend the Indiana Code concerning taxation.
From the introduced text:
A BILL FOR AN ACT to amend the Indiana Code concerning taxation. SECTION 1. IC 6-8.1-18-4.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 4.5. Notwithstanding any other section of this chapter, a payroll service provider shall provide the option to a business client that would allow the business client to hold the business client's funds in a bank account that is: (1) owned by the business client (as opposed to the payroll service provider's bank account); and (2) insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund. SECTION 2. IC 6-8.1-18-5, AS ADDED BY P.L.97-2021, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 5. (a) A contract entered into by a business client with a payroll service provider for third party payroll services must include a provision that substantially specifies that if the payroll service provider fails to deposit a business client's employer withholding taxes when due, and the failure is caused by an error or omission of the 2026 IN 1047--LS 6100/DI payroll service provider and not by the business client, the payroll service provider shall be required to reimburse the business client for the business client's payment of any penalties or interest assessed by the …
Sponsors
- Jake Teshka (R, HD-007) · primary sponsor
- Mike Andrade (D, HD-012)
Latest actions
- : Representative Andrade added as coauthor
- : Authored by Representative Teshka
- : First reading: referred to Committee on Financial Institutions
Subjects: FINANCIAL SERVICES; Financial Institutions, STATE GOVERNMENT; State and Local Funding
Common questions
- What is HB1047?
- HB1047 is a bill in the Indiana Legislature (2026 Regular Session): Regulation of payroll service providers.
- What does HB1047 do?
- In its own words: A bill FOR AN ACT to amend the Indiana Code concerning taxation.
- What is the status of HB1047?
- In committee as of January 8, 2026. Latest action: Representative Andrade added as coauthor (January 8, 2026).
- Who sponsored HB1047?
- Jake Teshka (R, HD-007), with 1 co-sponsor.
- Where is the official record for HB1047?
- On the Indiana Legislature website: https://iga.in.gov/legislative/2026/bills/house/1047
Source: official Indiana record. Tracked by Delilah, AI for legislation across all 50 states and Congress.