Indiana combines a low 3.05% flat state income tax with a county income tax that varies by where you live. Enter your county to see your exact take-home pay.
Every Indiana county levies its own income tax on top of the 3.05% state rate. County rates range from 0.5% to 3.38%. Marion County (Indianapolis) adds 2.02%, bringing the combined rate to 5.07%. The personal exemption is $1,000 (single) or $2,000 (married), reducing your taxable income before both state and county rates apply.
| County | County Rate | State Rate | Combined Total |
|---|---|---|---|
| Marion (Indianapolis) | 2.02% | 3.05% | 5.07% |
| Hamilton (Carmel/Fishers) | 1.10% | 3.05% | 4.15% |
| Allen (Fort Wayne) | 1.48% | 3.05% | 4.53% |
| Lake (Gary/Hammond) | 1.50% | 3.05% | 4.55% |
| St. Joseph (South Bend) | 1.75% | 3.05% | 4.80% |
| Tippecanoe (Lafayette) | 2.80% | 3.05% | 5.85% |
| Monroe (Bloomington) | 2.35% | 3.05% | 5.40% |
| Delaware (Muncie) | 2.50% | 3.05% | 5.55% |
Personal exemption: $1,000 (single) / $2,000 (married). County tax is based on your county of residence, not work location.
Estimates only. IN state 3.05% + county rate. Personal exemption $1,000 (single) / $2,000 (married). Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| Indiana State Tax (3.05%) | −$0.00 |
| Indiana County Tax | −$0.00 |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
Indiana has a flat 3.05% state income tax on wages for 2026. This rate has been reduced several times in recent years (it was 3.23% in 2022). On top of the state rate, all 92 Indiana counties levy a local income tax ranging from 0.5% (some rural counties) to 3.38% (Pulaski County). For most Hoosiers, the combined effective rate is roughly 4.5%–5.5% of gross income.
Indiana county income taxes are based on where you live, not where you work. Your employer withholds county tax based on your county of residence. If you live in Hamilton County (1.10%) but work in Marion County (2.02%), you pay Hamilton County's rate. Both state and county taxes use the same taxable income base: gross wages minus the $1,000 personal exemption (single).
An Indiana paycheck has five withholding categories: federal income tax (progressive 10%–37%), Indiana state income tax (3.05%), Indiana county income tax (0.5%–3.38% based on your county), Social Security (6.2% up to $184,500), and Medicare (1.45%). Indiana has no statewide SDI or state unemployment tax on employees.
Indiana's combined state + county rate makes it competitive but not the lowest in the region. Illinois charges 4.95% with no local income tax on wages. Michigan charges 4.25% flat. Ohio has a state rate around 3.5% at $75k but adds significant municipal income taxes (up to 3%) in cities like Columbus and Cleveland. Tennessee has no income tax. Kentucky charges a flat 4.5% with some local taxes. Indiana residents in low-tax counties (like Hamilton at 1.10% county) have some of the lowest combined rates in the Midwest.
Indiana does not tax Social Security benefits at the state level. This makes Indiana a relatively retiree-friendly state compared to those that fully tax Social Security income. Pension income from certain Indiana public pensions may also qualify for partial exemptions. Private retirement account distributions (IRA, 401k) are taxable in Indiana.
Indiana's personal exemption is $1,000 for single filers and $2,000 for married filing jointly. This is relatively modest compared to the federal standard deduction ($16,100 for single in 2026). Indiana does not use the federal standard deduction — it uses its own exemption system. Additional exemptions are available for dependents ($1,500 each) and for individuals over age 65 ($1,000 each).
Yes — Indiana passed legislation to gradually reduce the state income tax rate. The rate was 3.23% until 2022, reduced to 3.15% in 2023, 3.05% in 2024, and is scheduled to decrease further in coming years (potentially reaching 2.9%). Check the Indiana Department of Revenue for the most current rate schedule. County rates can also change annually based on local government decisions.