Indiana Tax Guide (2026)
Comprehensive statutory analysis of Indiana individual income tax rates, Department of Revenue filing forms, extension guidelines, telecommuting sourcing rules, and pass-through entity tax provisions.
Key Statutory Tax Parameters (Indiana, 2026)
2026 Legislative & Statutory Highlights
Indiana levies a flat state individual income tax rate, progressively reduced by statute to 3.00% by 2026. However, Indiana is unique in that all 92 counties levy mandatory County Adjusted Gross Income Taxes (CAGIT/LIT) ranging from 1.0% to 3.0%, making county residence a primary determinant of total state and local tax burden.
Indiana operates a flat personal income tax schedule with a statutory flat rate of 3.0%. Tax parameters are indexed annually or enacted through state legislative sessions. Taxpayers should ensure that adjustments for federal bonus depreciation, Section 179 expensing, and Net Operating Loss (NOL) carryforwards follow Indiana's specific rolling or static Internal Revenue Code conformity date.
Filing Forms, Deadlines & Extension Guidelines
Multi-State Workers & Telecommuting Sourcing Rules
Indiana taxes residents on worldwide income. Nonresidents performing services within Indiana are taxed on Indiana-source wages. Indiana has reciprocal agreements with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin.
Pass-Through Entity (PTE) Tax & Small Business Rules
Indiana enacted an elective Pass-Through Entity Tax (SB 2) allowing S-corps and partnerships to pay tax at the entity level at the state flat rate, passing a refundable credit to owners.
Estate & Inheritance Tax
Indiana has no state estate tax and no inheritance tax (repealed effective 2013).
Local & County Taxes
Mandatory County Income Taxes apply across all 92 counties. For example, Marion County (Indianapolis) imposes a local rate of 2.02%, bringing combined state and local income tax to 5.02%.
Worked Tax Example: $120,000 W-2 Earner in Indiana
A single filer in Indiana earning $120,000 pays $3,600 in state income tax at the 3.00% flat rate, plus approximately $2,424 in Marion County local tax, totaling $6,024 (5.02% combined).
Calculate Your 2026 Indiana Tax Liability
Enter your taxable income, filing status, and municipal details below to calculate your customized state tax liability and print your executive summary.
Flat rate; 2026 rate cited as 3.05% by IN DOR but Tax Foundation/other sources show 2.95%–3.05% under the phased cut. Verify the exact 2026 rate against Ind. Code § 6-3-2-1 before relying.
⚠ Some figures for this state are not yet fully verified — confirm with the state Department of Revenue before relying on them.
2026 Executive Indiana State Tax Audit Summary
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Your tax results depend on the full set of facts, your filing history, and the jurisdiction-specific rules that shift yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology
Frequently Asked Questions: Indiana Taxes
Source-verified — not professional advice
Every figure on this page is checked in-house against its primary source — IRS revenue procedures and publications, state Departments of Revenue, and the text of the underlying statute — before publication. Last reviewed 2026-10-20. The full source list is at the bottom of this page. If you spot an error, see our corrections & standards policy.
Not tax, legal, or financial advice
FiscTalk provides general educational information from public sources. Your tax results depend on the full set of facts, your filing history, and the jurisdiction-specific rules that shift yearly. Before filing or making decisions, consult a licensed CPA, EA, or attorney. FiscTalk is not a fiduciary and is not affiliated with the IRS or any state agency.
Sources & methodology