How to Use This Calculator
Enter your income, filing status, and any deductions. The calculator computes your Indiana state income tax alongside your federal tax, showing exactly how much goes to each and what you take home.
The most useful thing to try? See how Indiana's flat 3.05% rate affects different income levels, then test how deductions and retirement contributions change your bottom line.
Here's what each field means:
Annual Income is your total earnings before any taxes. Include wages, freelance income, investment income, and any other sources.
Filing Status determines which deductions and exemptions apply. Indiana uses filing statuses similar to the federal system.
Indiana Income Tax: What You Need to Know
Indiana uses a flat income tax of 3.05% on all taxable income. Unlike states with progressive brackets, everyone pays the same percentage regardless of how much they earn. A teacher making $45,000 and a CEO making $500,000 both pay 3.05%.
Indiana has one of the lowest flat income tax rates in the country at 3.05% (reduced from 3.15% in 2024). The state also has a unique feature: nearly every county levies its own additional income tax, ranging from 0.5% to 2.96%. This means your total Indiana income tax rate is the 3.05% state rate plus your county's local rate. Indiana starts with federal AGI and allows a $1,000 personal exemption plus a $1,500 dependent exemption per qualifying child.
A Real Example
Let's say you're a single filer earning $60,000 in Indiana. Your approximate Indiana state income tax would be around $1,797, for an effective state tax rate of about 3.0%.
That's just the state portion. Federal income tax and FICA taxes are additional.
Deductions and Exemptions
Personal exemption of $1,000, dependent exemption of $1,500 per child, additional exemption for those 65+. Indiana does not tax Social Security benefits. A credit is available for taxes paid to other states.
Local Taxes
Yes — and this is a big deal in Indiana. All 92 counties levy a county income tax (called CAGIT, COIT, or CEDIT depending on the county). Rates range from 0.5% to 2.96%. For example, Marion County (Indianapolis) charges 2.02%, while Hamilton County charges 1.0%. Your county rate is added on top of the 3.05% state rate.
Recent Changes
The state rate dropped from 3.15% to 3.05% in 2025, with scheduled reductions continuing. County rates change annually and vary significantly.
How to Use This Calculator Strategically
Model a raise or job change. With a flat tax, the math is simpler — every additional dollar is taxed at 3.05%. But deductions and credits can still shift your effective rate.
Compare filing statuses. Even with a flat rate, different filing statuses unlock different deduction amounts that can affect your bottom line.
Plan retirement contributions. See how 401(k) or IRA contributions reduce your Indiana taxable income and lower your state tax bill.
Evaluate a move. Compare Indiana's flat 3.05% rate to other states. Depending on your income level, a flat tax state might save you money — or cost you more — compared to a progressive system.
References
- Indiana Department of Revenue. (2025). Individual Income Tax.
This calculator is for educational purposes only and does not constitute tax or financial advice. Tax rates and rules change regularly. Consult a qualified tax professional for guidance specific to your situation.