Indiana Income Tax Calculator
Indiana’s flat 3.0% state rate is one of the lowest in the country — but it’s the only tax most Hoosiers see clearly, since all 92 counties also levy their own income tax. This take-home pay calculator covers federal tax, Indiana’s flat rate, county tax, and FICA in one place.
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How Indiana Income Tax Actually Works
Indiana applies a flat 3.0% rate to Indiana adjusted gross income for the 2025 tax year, continuing a long, steady decline from 3.4% a decade ago. It’s locked into a legislated glide path that takes the rate to 2.95% in 2026 and 2.9% in 2027, making Indiana one of the lowest flat-rate states in the country at the state level alone. The catch is that “state level alone” rarely tells the full story in Indiana: nearly all 92 counties levy their own additional income tax, with rates that range from roughly 0.5% up to 2.9% or more depending on the county, averaging about 1.16% statewide. County tax is based on where you lived as of January 1 of the tax year, not where you currently live or work, and it’s calculated and withheld together with your state tax on the same Indiana return.
Indiana takes a genuinely different approach to reducing taxable income than most states: there is no standard deduction at all. Instead, Indiana relies entirely on personal and dependent exemptions — $1,000 for yourself, another $1,000 for a spouse if married filing jointly, and $1,500 for each qualifying dependent (versus only $1,000 for non-minor dependents). A detail that catches new parents off guard in a good way: in the year a child is born or adopted, Indiana grants an additional $1,500 first-time additional dependent exemption on top of the regular dependent exemption — effectively doubling that child’s exemption value for one tax year only.
A deduction renters specifically should not miss: even with no general standard deduction, Indiana allows a renter’s deduction of up to $3,000 for rent paid on a principal residence located in a building or unit subject to Indiana property tax — a benefit homeowners don’t get an equivalent of. Indiana also fully deducts Social Security and railroad retirement benefits from state tax, offers a full, uncapped deduction for military retirement pay, and maintains reciprocity agreements with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin, meaning residents of those states working in Indiana generally owe Indiana tax only on Indiana-source income beyond wages.
Frequently Asked Questions
Indiana applies a flat 3.0% rate to adjusted gross income for the 2025 tax year, down from 3.05% in 2024. The rate is scheduled to keep falling under current law, reaching 2.95% in 2026 and 2.9% by 2027.
Nearly every Indiana county levies its own county income tax in addition to the state rate, with rates ranging from roughly 0.5% to about 2.9% to 3.3% depending on the county. County tax is based on where you live as of January 1, not where you work.
No. Unlike most states, Indiana does not offer a standard deduction at all. Instead, it uses personal exemptions: $1,000 for yourself, $1,000 for a spouse if married filing jointly, and exemptions for dependents.
Indiana allows renters who pay rent on their principal residence in a property subject to Indiana property tax to deduct up to $3,000 of rent paid from their Indiana adjusted gross income, even though Indiana has no general standard deduction.
In the year a child is born or adopted, Indiana allows an extra $1,500 first-time additional dependent exemption on top of the regular $1,500 dependent exemption, effectively doubling the exemption value for that one tax year.
No. Indiana allows a full deduction for Social Security and railroad retirement benefits included in federal AGI, and provides a full deduction for military retirement pay with no dollar limit, plus a deduction for active-duty pay.
Methodology: Calculations use Indiana’s 2025 flat 3.0% Adjusted Gross Income Tax rate, personal exemptions ($1,000 per filer/spouse, $1,500 per dependent, plus a $1,500 first-time dependent exemption in the birth/adoption year), the renter’s deduction (up to $3,000), the 2025 IRS federal tax brackets and Child Tax Credit rules, and 2025 Social Security (6.2% to the $176,100 wage base) and Medicare (1.45% + 0.9% additional Medicare tax) rates, per Indiana DOR and IRS.gov guidance. County income tax is estimated based on the range you select; verify your exact county rate with Indiana DOR Departmental Notice #1. This tool provides estimates for planning purposes only and is not tax, legal, or financial advice. Last reviewed for accuracy: June 2026.