Key Tax Facts: Indiana
- Flat 3.0% rate for tax year 2025, falling to 2.95% in 2026 and 2.9% in 2027
- County income taxes range from 0.5% to 3.38% on top of state rate
- Social Security benefits are exempt
- Military pay earned outside Indiana is exempt
Indiana State Income Tax Overview
Indiana has a flat state income tax rate of 3.0% for tax year 2025, down from 3.05% in 2024. H.B. 1001 accelerated previously enacted reductions and repealed the tax triggers, locking in 2.95% for 2026 and 2.9% for 2027 and beyond. On top of the state rate, every Indiana county levies its own local income tax, ranging from roughly 0.5% to over 3%, based on your county of residence as of January 1. Indiana has no standard deduction but offers a $1,000 personal exemption per filer and $1,000 per dependent, with an additional $1,500 for qualifying dependents. Social Security benefits and military retirement pay are exempt from Indiana income tax.
Indiana Income Tax Rate (2025)
Indiana uses a flat income tax rate -- the same percentage applies to all taxable income regardless of how much you earn.
Source: Indiana Department of Revenue
What a Indiana Resident Actually Pays: A Worked Example
| Taxable Income | $65,000.00 |
| Indiana Flat Rate | 3% |
| Estimated State Tax | $1950.00 |
| Effective Rate | 3% |
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Frequently Asked Questions -- Indiana Income Tax
Does Indiana have a state income tax?
Yes. Indiana imposes a state income tax with a flat rate of 3%. This is separate from your federal income tax obligation.
What is the Indiana income tax rate for 2025?
Indiana uses a flat income tax rate of 3% on all taxable income, regardless of income level or filing status.
Do I have to file a Indiana state tax return?
Most full-year Indiana residents with income above the state filing threshold must file a state return. Check the Indiana Department of Revenue for current thresholds and requirements.
How accurate is this estimate?
This is a planning estimate of your federal income tax only. It does not calculate Indiana state tax, and it does not account for state deductions, credits, exemptions, or local taxes. Use the Indiana rate schedule above as a reference, and verify with official Indiana tax forms or a qualified tax professional.
Does this calculator include federal income tax?
Yes. The calculator estimates your 2025 federal income tax using the official IRS 2025 brackets. It does not compute your Indiana state tax -- see the Indiana rate schedule below to work that out.
Where can I find official Indiana tax forms?
Official forms, instructions, and filing guidance are available at the Indiana Department of Revenue.
What is the sales tax rate in Indiana?
Indiana's combined state and average local sales tax rate is 7%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Indiana 2025 state taxes due?
2025 taxes are generally filed in 2026. The Indiana filing deadline is April 15, 2026, the same as the federal deadline.
Understanding Your Indiana Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Indiana state tax owed to the Indiana Department of Revenue. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Indiana Bill
Pre-tax retirement contributions reduce your federal and Indiana taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Indiana-specific credits and deductions that don't exist at the federal level are listed at the Indiana Department of Revenue -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Indiana's combined state-plus-average-local sales tax rate is 7%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Indiana Department of Revenue or a qualified tax professional for guidance specific to your situation.