Indiana variant. This is a Indiana-specific version of the Income Tax Calculator, using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Income Tax Calculator.
Indiana income tax (Flat 3.05% (decreasing toward 2.9%)) stacks on top of federal tax. Understanding both layers is essential to estimating your total Indiana tax bill.
Indiana state income tax structure
Indiana taxes income at Flat 3.05% (decreasing toward 2.9%), with a top marginal rate of 3.05%. Like the federal system, only income within each bracket is taxed at that bracket's rate.
Federal brackets (10%–37%) apply nationwide. Combine your federal effective rate with the Indiana rate to find your true marginal tax on the next dollar earned.
About taxes and housing in Indiana
Indiana has a low flat state income tax, and counties may add their own local income taxes on top.
Indiana caps property taxes through a constitutional limit tied to a percentage of a home's value, keeping bills predictable.
Indiana has one of the most manufacturing-intensive economies in the country, with steel, autos, and pharmaceuticals as major sectors.
Worked example: state tax on $67,173
Using the 3.05% top rate as a ceiling, state income tax on $67,173 is at most about $2,049; the actual figure is lower after brackets and deductions.
Quick reference
- State income tax: Flat 3.05% (decreasing toward 2.9%)
- State sales tax: 7% (plus 0.00% avg local)
- Median home value: $240,000
- Median household income: $67,173
- Effective property tax rate: 0.84%
- Avg auto insurance: $1,304/yr
Frequently Asked Questions
Does Indiana have state income tax?
Yes - Flat 3.05% (decreasing toward 2.9%), topping out at 3.05%.
What is the top tax rate in Indiana?
The top marginal state rate is 3.05%.