Does Indiana tax Social Security or retirement income?

Retirement income fully taxable. Plan distributions and Roth conversions with both federal and Indiana treatment in mind — the difference can be thousands of dollars per year for retirees.

How do Indiana brackets compare to federal brackets in 2026?

Federal 2026 brackets run from 10% to 37%, with the top rate kicking in above $640,600 single / $768,700 MFJ. Indiana's flat 3.05% state rate stacks on top of federal. See our 2026 Federal Tax Brackets page for the full schedule.

What's the 2026 standard deduction for Indiana filers?

The federal standard deduction is $16,100 single / $32,200 MFJ / $24,150 HoH for 2026 (Rev. Proc. 2025-32). Indiana sets its own standard deduction, which may differ from the federal amount — check your state form instructions or the Indiana Tax Guide for the exact figure.

How much will I take home on a $75,000 salary in Indiana in 2026?

On $75,000 of wage income (single filer, standard deduction, no other adjustments), federal income tax is roughly $8,600, FICA is $5,738, and Indiana state tax is about $2,288 — leaving roughly $58,375 take-home. Run the live Indiana calculator for your exact filing status, deductions, and pre-tax benefits.

Are capital gains taxed differently in Indiana?

Indiana generally taxes capital gains as ordinary income, with an estimated effective rate around 3.05% for high earners. Federal LTCG rates of 0/15/20% (plus 3.8% NIIT) apply separately. See our 2026 Capital Gains Rates page for the full federal schedule.

When do 2026 Indiana tax changes take effect?

2026 rates apply to income earned January 1 – December 31, 2026, and are reported on returns filed in early 2027. Most states adjust brackets, standard deductions, and credits annually for inflation; Indiana may also be in the middle of multi-year rate cuts or restructuring. Confirm the latest amounts on the Indiana Department of Revenue website before withholding or filing.

Do I need to file a Indiana state return if I moved during 2026?

Yes — most likely a part-year resident return for Indiana, allocating income by the days/months you were a resident. If you also earned wages while domiciled in another state, you typically claim a credit on one return for tax paid to the other to avoid double taxation. Track move dates carefully; high-tax states audit residency claims aggressively.

How does Indiana tax remote workers and out-of-state income in 2026?

Indiana taxes residents on worldwide income and non-residents on Indiana-sourced income. Remote workers physically in Indiana are generally treated as earning Indiana-source wages even if the employer is elsewhere. To avoid double tax, claim a resident credit on the Indiana return for income tax paid to other states on the same dollars.

What 2026 Indiana tax credits and deductions should I know about?

Common 2026 Indiana credits include a state EITC match, child and dependent care credit, residential energy credits, and 529 contribution deductions or credits. Many states also offer property-tax/renters' credits and senior exclusions. Check the Indiana Department of Revenue's 2026 instructions for the full list — credits reduce tax dollar-for-dollar and are often missed.

Updated June 2026Reviewed for Tax Year 2026

Indiana 2026 Income Tax Brackets & Rates

Indiana levies a flat-rate income tax with an estimated top effective rate of 3.05% for 2026. Combined sales tax averages 7.00% and property tax averages 0.84% of home value.

2026 Indiana Rate Overview

Income tax system	Flat-rate income tax
Top / flat state rate	3.05%
Long-term capital gains	3.05%
Combined sales tax (state + local avg)	7.00%
Avg effective property tax	0.84%
Retirement income treatment	Retirement income fully taxable
Business climate	Flat 3.05% individual income tax; low corporate at 4.9%.

Rates reflect 2026 statutory schedules from the Indiana Department of Revenue and the Tax Foundation State Tax Facts dataset. State rate shown is the estimated effective top-bracket rate used by TaxEase.money calculators — see your filing-status bracket on the Indiana Tax Guide.

How Indiana Income Tax Works in 2026

Indiana runs a flat-rate income tax: every dollar of state taxable income is taxed at the same percentage (3.05% for 2026). Flat systems make withholding and estimated-tax planning predictable, but they offer less progressivity than the federal seven-bracket schedule.

Your starting point is usually federal AGI, adjusted for Indiana-specific additions (e.g., federal QBI add-back) and subtractions (retirement income exclusions, municipal-bond interest). Apply the 3.05% flat rate, then subtractIndiana-specific credits (EITC match, child/dependent care, residential energy) to arrive at state tax owed.

Federal + Indiana Marginal Rate Stack

State income tax stacks on top of federal income tax and FICA. The 2026 federal brackets (single filer) are:

Federal bracket	Up to (single)	+ Indiana rate	Combined marginal
10.00%	$12,400	3.05%	13.05%
12.00%	$50,400	3.05%	15.05%
22.00%	$105,700	3.05%	25.05%
24.00%	$201,775	3.05%	27.05%
32.00%	$256,225	3.05%	35.05%
35.00%	$640,600	3.05%	38.05%
37.00%	—	3.05%	40.05%

FICA (7.65% combined) adds on top for wage income up to the Social Security wage base ($184,500 in 2026). See 2026 Federal Tax Brackets for the full schedule across all filing statuses.

Retirement Income, Social Security & Pensions

Indiana: Retirement income fully taxable.

Whether you live in Indiana during retirement matters as much as where you saved. Pre-tax 401(k) and IRA contributions reduce both federal and (in most states) state taxable income today, while Roth contributions and conversions are taxed up front. If you plan to retire in a no-income-tax or retirement-friendly state, frontloading Roth conversions before you move can permanently lock in lower rates.

2026 Worked Example: $100,000 Single Filer in Indiana

Gross wage income	$100,000
2026 federal standard deduction (single)	$16,100
Federal taxable income	$83,900
Estimated federal income tax	$16,712
Estimated Indiana state tax @ 3.05%	$3,050
FICA (6.2% SS + 1.45% Medicare)	$7,650
Combined estimated tax	$27,412
Estimated take-home	$72,588

Illustrative only — uses the TaxEase.money national-average state rate for Indiana and ignores state-specific deductions and credits. Run the live Indiana Income Tax Calculator for a personalized figure.

Compare Indiana With Other States

Indiana sits in a particular spot on the national tax map. These nearby states have similar effective rates:

Pennsylvania 2026 brackets

Top rate 3.07%

Ohio 2026 brackets

Top rate 3.50%

Arizona 2026 brackets

Top rate 2.50%

Kentucky 2026 brackets

Top rate 4.00%

North Dakota 2026 brackets

Top rate 2.04%

Louisiana 2026 brackets

Top rate 4.25%

Indiana side-by-side comparisons

Illinois vs Indiana Taxes →

Indiana Calculators & Resources

Indiana Income Tax Calculator →Indiana Paycheck Calculator →Indiana Salary Calculator →Indiana Property Tax Calculator →Indiana Tax Guide (hub) →All 50 State Brackets 2026 →

2026 Federal Tax Brackets →2026 Standard Deduction →2026 Capital Gains Rates →2026 401(k) Limits →2026 IRA Limits →National Income Tax Calculator →Paycheck Tax Calculator →Capital Gains Calculator →Property Tax Calculator →Self-Employment Tax Calculator →Tax Refund Calculator →All 50 State Tax Guides →

Indiana 2026 Tax FAQ

Indiana applies a flat 3.05% state income tax to all taxable wage income in 2026. There is one rate — no brackets — so the calculation is simpler than the federal seven-bracket schedule.

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Sources Used

Our data is sourced exclusively from official tax authorities and non-partisan policy institutes. Rates and thresholds are verified against the most recent official publication for tax year 2026.

Internal Revenue Service (IRS) ↗
Federal 2026 brackets, standard deduction (Rev. Proc. 2025-32).
Tax Foundation — State Individual Income Tax Rates ↗
Cross-state rate, bracket, and deduction comparison data.
Congressional Research Service (CRS) ↗
Non-partisan analysis of federal tax law and proposals.
Indiana Department of Revenue ↗
Official Indiana 2026 rate schedule, forms, and instructions.

Last updated for tax year 2026 on January 5, 2026. This page is informational and is not tax advice. Confirm rates with the Indiana Department of Revenue before filing.