Results are estimates for educational purposes only. Based on 2026 IRS federal brackets and Indiana state tax rates. Always consult a qualified tax professional.
Indiana income tax overview
Indiana has a flat income tax rate of 3.05% — one of the lowest flat rates among states that levy income tax. Indiana has been steadily reducing its rate from 3.4% in 2017 through a series of legislated cuts, with plans to continue reducing toward 2.9% by 2027. The state conforms closely to federal tax rules. One notable feature of Indiana is its county income tax system — every Indiana county levies its own income tax ranging from 0.5% to 2.9%, collected alongside the state tax. Marion County (Indianapolis) residents pay an additional 2.02% county tax, significantly adding to the overall burden for Indianapolis workers.
2026 Indiana income tax rates
Tax rate
Income range (single filer)
3.05% flat
All taxable income — 2026
Worked example: $75,000 salary in Indiana
A $75,000 salary in Indiana results in approximately $2,288 in state income tax (3.05% flat), plus county tax varying by location, plus $12,580 federal tax, $4,650 Social Security, and $1,088 Medicare. Indianapolis residents pay roughly $1,515 additional county tax.
Key facts: 3.05% flat rate · Declining toward 2.9% · Every county adds 0.5–2.9% local tax
Frequently asked questions — Indiana income tax
Yes. Indiana has been systematically reducing its flat income tax rate and plans to reach 2.9% by 2027. This is part of a broader effort to make Indiana more competitive for business and individual taxpayers.
Every Indiana county levies its own income tax on top of the state 3.05% rate. Rates range from 0.5% to 2.9%. You pay the county tax for the county where you live. Indianapolis (Marion County) charges 2.02%, making the total state+local rate approximately 5.07%.
No. Indiana does not tax Social Security benefits.
Indiana exempts most military retirement pay and some government pensions. Private sector 401k and IRA distributions are generally taxable at the state rate plus applicable county rate.
No separate city income taxes exist in Indiana beyond the county-level system. The county tax covers both city and county government needs.