How Indiana income tax works
Indiana taxes individual income with a single flat rate of 3.00%.
Indiana applies its rate to taxable income, with limited or no standard deduction, so most income is taxed.
Flat ~3% state rate; counties add their own income tax on top.
Indiana income tax rates for 2026
Every dollar of taxable income is taxed at 3.00%, so your marginal and average rates are the same before deductions.
Your effective rate is the total tax divided by your gross income; your marginal rate is the rate on your next dollar earned. The calculator shows both.
Indiana taxes capital gains as ordinary income at the flat state rate (plus county tax).
Lowering your Indiana tax bill
Pre-tax contributions to retirement accounts, health savings accounts and other deductions reduce the taxable income this calculator starts from.
Remember this estimate covers IN state income tax only. Federal income tax and payroll taxes apply on top, and this is a planning estimate — verify with the Indiana Department of Revenue (in.gov/dor) or a tax professional.
Frequently asked questions
How much is Indiana state income tax?
Indiana charges a flat 3.00% on taxable income.
What is the difference between effective and marginal rate?
Your marginal rate is the rate on your last dollar of income; your effective rate is your total tax divided by total income, which is lower because of brackets and deductions.
Does this include federal tax?
No. This calculator estimates IN state income tax only. Federal income tax and payroll taxes are separate and apply on top.
How are capital gains taxed in Indiana?
Indiana taxes capital gains as ordinary income at the flat state rate (plus county tax).