Indiana vs Pennsylvania Taxes (2026)

Side-by-side comparison of income tax, property tax, sales tax, capital gains, and retirement treatment between Indiana and Pennsylvania for tax year 2026. Use the calculator below to estimate how much you would save (or pay) after relocating.

TaxIndianaPennsylvania
State income tax (effective)3.05%3.07%
Long-term capital gains3.05%3.07%
Property tax (effective)0.84%1.49%
Combined sales tax7.00%6.34%
Retirement incomefully-taxableno-tax
Income systemflatflat

Tax savings calculator

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Estimated 2026 burden

Indiana total tax

$18,386

Pennsylvania total tax

$18,406

Indiana state tax

$3,016

Pennsylvania state tax

$3,036

Difference

+$20

Pennsylvania costs more

As % of income

0.02%

Federal tax is identical in both columns and excluded from the difference. Numbers use 2026 IRS brackets, state effective rates, and the 3.8% NIIT where applicable.

Relocation analysis

Moving from Indiana to Pennsylvania would cost an extra $20 per year on this profile.

  • Property tax difference on a $400k home: $2,600/yr.
  • Sales tax difference on $50k of taxable spending: $330/yr.
  • Capital gains difference per $10k gain: $2.

Key differences

  • Indiana: Flat 3.05% individual income tax; low corporate at 4.9%.
  • Pennsylvania: Flat 3.07% individual; retirement income largely exempt; 8.49% corporate, phasing to 4.99%.
  • Income system: Indiana is flat, Pennsylvania is flat.
  • Retirement: Indianafully taxable; Pennsylvaniano tax.

Recommended Tax Filing Software

Once you know what you owe, file with software built for your situation. We compare the top U.S. options below.

Editor's pick

TurboTax

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4.5·$0 – $115 federal
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  • State filing adds up
File with H&R Block

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Best value for self-employed

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File with TaxAct

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Best truly-free federal e-file

4.6·$0 federal / $14.99 state
  • Free federal filing for all forms
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Comparison FAQs

It depends on income mix. Pennsylvania has an effective income rate of 3.07% vs Indiana's 3.05%. Property tax (0.84% vs 1.49%) and sales tax can swing the answer.

Related resources

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