Income Tax for Indiana (2026)

How This Calculator Works in Indiana

This calculator applies Indiana's 2026 tax brackets and rates to estimate your state income tax liability. Enter your income and filing status to see your marginal rate, effective rate, and estimated tax owed.

Indiana Overview

Indiana levies a flat income tax of 3.05%, one of the lowest flat rates in the nation. Every county adds its own income tax (ranging from about 1% to 3.38%), so the combined rate varies significantly — a Marion County (Indianapolis) resident pays about 5.08% combined. Indiana's straightforward system and low rates make it one of the most business-friendly tax environments in the Midwest.

How Indiana Compares

Indiana's top income tax rate of 3.05% compares to Illinois at 4.95% and Ohio at 3.5%. The rate differences can meaningfully impact take-home pay for workers near state borders.

Indiana's income tax rate of 3.05% compares to a national average of approximately 5.04%. This is below the national average.

Tips for Indiana Residents

• 1Indiana has one of the lowest flat income tax rates in the country at 3.05%, recently reduced from 3.23%.
• 2All 92 Indiana counties levy their own income taxes on top of the state rate, typically ranging from 1% to 3.38%, so your total rate depends on where you live.
• 3Indiana does not tax Social Security benefits, and military retirement pay is fully exempt from state income tax.
• 4The state offers a $1,000 renter's deduction and a $3,000 mortgage interest deduction (separate from federal deductions).
• 5Indiana uses a simple tax system — it starts with federal AGI with few state-specific adjustments, making returns relatively easy to prepare.

Frequently Asked Questions