Indiana state income tax rates and calculator
Indiana levies a flat tax rate on all taxpayers, regardless of their income. For income earned in 2024, to be reported on tax returns filed in 2025, the income tax rate is 3.05 percent.
Indiana passed legislation to reduce its income tax rate starting in 2023, and continuing with a decrease every year through 2027.
Counties in Indiana collect a local income tax in addition to the state income tax.
Indiana personal income tax rates for 2024
Indiana’s income tax rate is a flat 3.05 percent in 2024, for tax returns filed in 2025. The state has plans to continue dropping its tax rate each year, until the rate hits 2.9 percent in 2027. Read more about Indiana’s ongoing tax cuts.
Local counties are also allowed to collect income taxes — and currently all Indiana counties do levy an income tax. See more about local income taxes.
Who has to file Indiana state taxes?
If you live in Indiana and have income totaling more than your exemptions (a good rule of thumb, the state says, is if your income is more than $1,000), you must file a tax return. The same applies if you lived in the state for a portion of the year and earned income there.
Also, if you made money from a company based in Indiana, you must file. Five states — Ohio, Kentucky, Pennsylvania, Michigan and Wisconsin — have a reciprocal agreement with Indiana. That means that all income earned by Indiana residents in those states must be reported on Indiana tax returns (the same as if it were earned in Indiana), and vice versa for residents of those states who earn income in Indiana.
Is there a personal exemption or standard deduction in Indiana?
Indiana doesn’t have a standard deduction but it does have personal exemptions. You can claim a $1,000 exemption for yourself and, if married filing jointly, $1,000 for your spouse. If married filing separately, you can only claim the $1,000 exemption for your spouse if they have zero income. There is also a $1,000 exemption for each qualifying dependent.
Indiana sales tax rate
Indiana collects a 7 percent sales tax on most items.
Other things to know about Indiana taxes
- Property taxes are collected by local governments (cities, counties, etc.). Indiana’s effective (average) property tax rate is 0.71 percent, according to the Tax Foundation.
- The state has no inheritance tax or estate tax.
- The corporate tax rate is 4.9 percent.
- The gasoline tax is 35 cents a gallon, effective July 1, 2024 to June 30 2025.
- The cigarette tax is 99.5 cents a pack.