Indiana charges a flat 3.05% income tax rate for 2026. That's one of the lower flat rates in the country — cheaper than Illinois (4.95%), Michigan (4.25%), and significantly cheaper than most progressive-tax states. The state uses a $1,000 personal exemption per person, and counties can add their own income tax on top (ranging from about 0.5% to 3.38%).

On a $75,000 salary with the state rate only, you'd pay about $2,254 in state income tax. But if you live in Marion County (Indianapolis), add roughly another $1,775 in county tax. That county tax is a big deal — it can push your effective Indiana rate from 3.05% to over 5% depending on where you live.

On top of state and county tax, you've got federal progressive brackets with the standard deduction, plus FICA at 7.65% combined. 401(k) contributions reduce taxable income at both the federal and state level.

Indiana doesn't tax Social Security benefits. Property taxes are reasonable at about 0.85% average effective rate. Combined sales tax is 7%, which is moderate. For a Midwestern state, Indiana's overall tax burden is competitive, especially if you're in a lower-tax county. Compare IN to other states.

How It's Calculated

Formula

IN State Tax = (Gross Income − Personal Exemptions) × 3.05%, plus county tax if applicable

Step-by-Step

1Subtract IN personal exemption ($1,000/person) from gross income
2Apply IN flat 3.05% rate to state taxable income
3Add county income tax (0.5%–3.38% depending on county of residence)
4Add federal tax (10%–37% progressive brackets) and FICA (7.65%)
5Sum all taxes and subtract from gross pay for net take-home

Example

$75,000 salary, single in IN (no county tax): IN tax = $2,254. Federal ≈ $7,670. FICA = $5,738. Net ≈ $59,338. In Marion County: add ~$1,775.

For detailed data sources and full methodology, see our Methodology & Data Sources page.

Key Rates & Data for 2026

IN Flat Tax Rate

3.05%

IN Personal Exemption

$1,000/person

IN County Tax Range

0.5% – 3.38%

IN Avg Property Tax Rate

~0.85%

IN Avg Combined Sales Tax

7.0%

Indiana Tax Calculator FAQ

How much is Indiana state income tax in 2026?

Indiana has a flat 3.05% state income tax rate — one of the lowest flat rates in the country. It applies to all taxable income regardless of how much you make. The rate has been gradually decreasing over the years (it was 3.15% in 2024), and Indiana law ties future rate reductions to state revenue triggers.

Does Indiana have a standard deduction?

No. Indiana doesn't offer a standard deduction. Instead, you get a $1,000 personal exemption per person ($2,000 for married filing jointly). It's less generous than states with standard deductions, but the 3.05% rate is low enough that the total tax burden stays manageable. On a $75K salary (single), taxable income = $75,000 - $1,000 = $74,000, and state tax = $2,257.

What are Indiana county taxes?

Most Indiana counties impose an additional county income tax ranging from about 1.5% to 2% on top of the 3.05% state rate. That means your effective Indiana tax rate is typically 4.55% to 5.05% combined. The county tax is based on where you live (not work), and rates vary significantly. This calculator shows the state portion only — check your county rate for the full picture.

Does Indiana tax retirement income?

Yes, Indiana taxes most retirement income including 401(k) withdrawals, IRA distributions, and private pensions at the 3.05% flat rate (plus county tax). Social Security benefits are exempt from state tax. Indiana also offers a small pension income exclusion for some government retirees, but it's limited.

How does Indiana compare to neighboring states on taxes?

Indiana's 3.05% rate is very competitive regionally. Illinois charges 4.95%, Ohio goes up to 3.99%, Michigan is at 4.25%, and Kentucky is 4%. The main catch is Indiana's county taxes, which can push your effective rate over 5%. But even with county tax, Indiana is generally cheaper than its neighbors for most income levels. Property taxes are also moderate at around 0.82% effective rate.

Florida vs Texas Tax Comparison

A detailed comparison of the tax structures in Florida and Texas — two of the most popular no-income-tax states for relocation.

2026 Tax Brackets: IRS Income Tax Brackets 2026 Explained

Complete guide to the IRS 2026 tax brackets — income tax brackets 2026, marginal tax rate, federal income tax rates, adjusted gross income, and tax credits for married couples filing jointly.

Related Calculators

Paycheck Calculator Illinois Calculator Michigan Calculator Relocation Calculator Salary After Tax

Link to This Calculator

Help others find this free tool — add a link to your website or blog.

HTML Link Code

<a href="https://thetaxcalc.com/indiana-tax-calculator" title="Indiana Tax Calculator 2026 | 3.05% Flat Rate">Indiana Tax Calculator 2026 | 3.05% Flat Rate</a>