Indiana Income Tax Calculator 2026
See your Indiana state tax, effective rate, and take-home pay in 60 seconds.
Estimate only. Uses 2026 federal figures, Indianastate figures (see sources below), and a standard-deduction federal calculation. Filing status “Head of household” uses the single column for Indiana. Your actual tax depends on credits, additional income, and adjustments.
Worked example: A single filer earning $85,000 in Indiana
Start with $85,000 of wages. Indiana applies its flat 3.05% rate, which comes to about $2,593 in state income tax — an effective state rate near 3%. 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 3.05% 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 3.05% 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 generally taxes retirement income such as 401(k), IRA, and pension distributions, though it may offer exclusions, deductions, or credits for certain pension or retirement income and for older taxpayers. Confirm the current exclusions with the Indiana Department of Revenue.
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 3.05% 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 3.05% 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 3.05% 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. For other retirement income, Indiana generally taxes 401(k), IRA, and pension distributions, though exclusions may apply. Verify with the Indiana Department of Revenue.
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 3.05% 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 June 12, 2026.