What is the Indiana state income tax rate for 2026?

Under Indiana HEA 1001 and SB 417, Indiana's statutory flat individual income tax rate decreases to 3.00% for the 2026 tax year (down from 3.05% in 2025).

How do Indiana county income taxes work?

All 92 counties in Indiana impose a local income tax (ranging from 0.50% to 3.00%) on residents and non-residents who work in the county. For example, Marion County (Indianapolis) levies 2.02%, Allen County levies 1.59%, and Lake County levies 1.50%.

What are the Indiana personal exemptions for 2026?

Indiana provides a $1,000 personal exemption for each taxpayer and spouse, plus an additional $1,500 exemption for each qualifying dependent child ($2,500 total exemption per dependent child).

2026 Indiana Tax Calculator: 3.00% Flat Rate & County Taxes

Interactive Indiana Paycheck Calculator

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Indiana County Income Tax Rate

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Your 2026 Indiana Take-Home Pay Summary

Where Does Your Paycheck Go? Take-Home: 0% | Fed: 0% | FICA: 0% | State: 0% | County: 0%

Indiana Paycheck Frequency Schedule

Frequency	Gross Pay	Federal Tax	FICA (SS + Med)	IN State Tax	County Tax	Net Take-Home

2026 Annual Tax Liability Breakdown

Tax Category	Taxable Base / Rate	Annual Amount	Effective %

How Indiana State & County Income Taxes Work in 2026

Indiana operates a dual-level flat tax system comprising a declining state flat tax and mandatory local county taxes:

1. Flat 3.00% State Income Tax Rate

Under Indiana statutory rate cuts enacted in HEA 1001, Indiana's personal income tax rate reduces to 3.00% in 2026 (scheduled to decrease further to 2.90% in subsequent years contingent on state revenue triggers). All individual taxable income is taxed at this uniform rate.

2. County Local Income Taxes (LIT)

Every county in Indiana adopts an individual County Local Income Tax. Rates vary by county, ranging from 0.50% to 3.00% of Indiana adjusted gross income. Residents pay the tax based on their county of residence as of January 1 of the tax year.

3. Indiana Personal & Dependent Child Exemptions

Indiana does not offer a standard deduction. Instead, taxpayers claim generous statutory personal exemptions:

Taxpayer & Spouse: $1,000 personal exemption each.
Dependent Children: $1,000 basic exemption plus an additional $1,500 child exemption (total $2,500 per qualifying child).
Elderly / Blind Filers: Additional $1,000 exemption if age 65 or older.

Reciprocal Tax Agreements: Indiana has reciprocal agreements with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. Commuters working in Indiana but residing in one of these states pay taxes only to their home state by filing Form WH-47.

Frequently Asked Questions: Indiana Tax Calculator

Does Indiana tax retirement or pension income?

Indiana completely exempts Social Security benefits and military retirement pay from state and county taxation. Civil service and private retirement distributions are generally subject to state and county tax.

Can I deduct rent paid in Indiana?

Yes. Indiana allows an income tax deduction of up to $3,000 for rent paid on your principal Indiana residence.

How are capital gains taxed in Indiana?

Indiana treats both short-term and long-term capital gains as ordinary income, taxed at the flat state rate of 3.00% plus your county income tax rate.

Explore Other State & Federal Tax Calculators

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