Indiana Income Tax Calculator 2026
See your Indiana state tax, effective rate, and take-home pay in 60 seconds.
- This state uses a simplified estimate: a single rate schedule applied to gross income less the standard deduction and personal exemption. Local income taxes, mandatory state payroll contributions, retirement income exclusions, credits, and state-specific adjustments are not modeled.
Estimated federal and state take-home pay based on the information entered. Local taxes, state payroll programs, employer benefits, itemized deductions, tax credits, and special state adjustments may not be included. Tax year 2026. Indiana figures last verified July 17, 2026 — see sources below.
Worked example: A single filer earning $85,000 in Indiana
Start with $85,000 of wages. After $1,000 in modeled state deductions/exemptions, Indiana applies its flat 2.95% rate, which comes to about $2,478 in state income tax — an effective state rate near 2.9%. Federal income tax and FICA are calculated separately and shown in the calculator above.
Assumes a single filer taking the standard treatment. Figures are educational estimates.
How Indiana taxes income
Indiana is a flat-tax state: all taxable income is taxed at the same 2.95% rate, regardless of how much you earn. There are no brackets to climb.
Indiana generally starts from your federal income, applies state-specific adjustments, and then applies the flat 2.95% rate. Deductions, exemptions, and credits can change the final number — confirm the current details with the Indiana Department of Revenue.
2026 rate structure
Retirement income & Social Security
Indiana retirement income treatment varies by plan type, your age, and whether the distribution is qualifying. Many states exempt some or all 401(k), IRA and pension income for retirees, and this calculator does not model those exclusions. Check the Indiana Department of Revenue for the rules that apply to you before assuming distributions are taxable.
Local taxes & reciprocity
Indiana counties each levy a local income tax on top of the flat state rate; rates vary by county of residence.
Reciprocity: Indiana has reciprocity agreements with Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin. If you live in Indiana and work in one of those states, you pay Indiana tax on those wages and file only in Indiana.
Notable deductions, credits & other taxes
Deductions & credits
- Indiana standard deduction and personal exemptions (verify current amounts with the Indiana Department of Revenue)
- Credit for income taxes paid to other states (for residents with out-of-state income)
- State versions of common credits — earned income, child/dependent care, and education credits — where offered
Capital gains: Indiana has no separate capital gains rate. Capital gains included in your federal AGI are taxed as ordinary income at the flat 2.95% rate.
Property tax: Property taxes in Indiana are assessed and collected locally, so effective rates vary widely by county and municipality. Check your county assessor or the Indiana Department of Revenue for local rates.
Indiana vs. neighboring states
Compared with its neighbors — Illinois, Kentucky, Michigan, Ohio — Indiana's flat 2.95% sit within the regional range. Effective rates depend heavily on income level, deductions, and local taxes.
Indiana state tax FAQs
What is the Indiana state income tax rate for 2026?
Indiana levies a flat 2.95% income tax that applies to all taxable income, with no graduated brackets.
Does Indiana tax retirement income or Social Security?
Social Security benefits are exempt from Indiana income tax. Treatment of other retirement income depends on the plan type, your age, and whether the distribution is qualifying — many states exempt some or all of it for retirees. This calculator does not model those exclusions, so verify with the Indiana Department of Revenue rather than assuming your distributions are fully taxable.
How are capital gains taxed in Indiana?
Indiana has no separate capital gains rate. Capital gains included in your federal AGI are taxed as ordinary income at the flat 2.95% rate.
Is there a local or city income tax in Indiana?
Indiana counties each levy a local income tax on top of the flat state rate; rates vary by county of residence.
Does Indiana have tax reciprocity with neighboring states?
Indiana has reciprocity agreements with Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin. If you live in Indiana and work in one of those states, you pay Indiana tax on those wages and file only in Indiana. For non-reciprocal states, you generally file a non-resident return there and claim a credit at home.
Sources & verification
Last verified July 17, 2026.