Disclaimer: This calculator gives you an estimate based on tax rates and details found online. These rates may change over time. For the most accurate and up-to-date information, please check the official IRS website and your state’s tax website. Always talk to a tax expert for advice about your personal tax situation.
How We Calculate the Result
To calculate your estimated Indiana income tax, we start with your total household income. Then we subtract contributions to retirement accounts like 401(k) and IRA, as well as either your standard or itemized deductions—whichever is higher. We also subtract personal exemptions (a fixed amount per person claimed). This gives us your taxable income.
Indiana uses a flat tax rate of 3.05% on all taxable income, regardless of how much you earn. So, once we get your taxable income, we multiply it by 3.05% to find your estimated state tax. We also check if your income meets the minimum requirement for federal tax filing, based on your age and filing status.
About Indiana Income Tax
Indiana is one of the states that applies a flat income tax rate. This means everyone pays the same percentage (3.05%) of their taxable income, whether they earn a little or a lot. This is different from progressive tax states, where people with higher incomes pay a higher rate.
There are no complex tax brackets in Indiana. No matter your filing status—single, married, or head of household—you pay 3.05% on the amount left after deductions and exemptions.
Residents can also reduce their taxable income through retirement contributions (401(k), IRA), itemized deductions, or the standard deduction (which Indiana allows based on filing status). You can also claim state personal exemptions, which reduce your income before the tax is calculated.
Remember, this tax applies only to state income tax. You may still owe federal income tax, which has different brackets and rules. Always check both when planning your taxes.
Frequently Asked Questions
What is the income tax rate in Indiana?
Indiana applies a flat income tax rate of 3.05% to all taxable income. This means everyone pays the same rate, whether your income is high or low. The tax is applied after subtracting deductions and exemptions from your total income.
When do singles start paying Indiana income tax?
Single individuals start paying Indiana income tax as soon as their taxable income is greater than zero. Since Indiana uses a flat tax rate, there is no lower limit. But for federal taxes, singles must file if their gross income exceeds $14,600 (under age 65).
When do married filers start paying Indiana income tax?
Married filers in Indiana also start paying income tax as soon as their taxable income is more than zero. The flat rate of 3.05% applies to all taxable income. Federally, married couples must file if they make $29,200 (both under 65), or more if older.
Are deductions and exemptions allowed in Indiana?
Yes, Indiana allows taxpayers to subtract standard or itemized deductions from their income. You can also subtract personal exemptions (a fixed amount per person). These help lower the amount of income that gets taxed.
What is considered taxable income in Indiana?
Taxable income in Indiana includes wages, salaries, business income, and other earnings. After subtracting allowed deductions (401k, IRA, itemized or standard) and personal exemptions, what’s left is taxed at the flat 3.05% rate.