What is the Indiana income tax rate in 2026?

Indiana has a flat 2.95% state income tax rate in 2026, reduced from 3.00% in 2025. Unlike most states, Indiana uses personal exemptions ($1,000 per person + $1,500 per dependent) instead of a standard deduction to compute taxable income.

Do all Indiana counties have an income tax?

Yes. All 92 Indiana counties levy a county income tax, ranging from 0.5% to 2.864%. The county tax is computed on your Indiana taxable income (not gross wages). Marion County (Indianapolis) charges 2.02%, Allen County (Fort Wayne) 1.48%, Lake County 1.50%, and Elkhart County 2.00%.

How much is the Marion County (Indianapolis) income tax?

Marion County levies a 2.02% county income tax on Indiana taxable income. On an $80,000 salary (single, no dependents), IN taxable = $79,000 after the $1,000 personal exemption, so county tax = $79,000 x 2.02% = $1,596. Combined with the 2.95% state tax ($2,331), total state+county tax is $3,927.

How does Indiana compare to neighboring states?

Indiana's combined state+county rate (3.45%–5.8%) is moderate. Ohio charges 2.75% state + 0–2.5% municipal. Illinois has a flat 4.95% with no local tax. Michigan is flat 4.25% + some city taxes. Kentucky has a flat 4.0%. Indiana's mandatory county tax makes the effective rate higher than it first appears.

Indiana Paycheck Calculator 2026

Flat 2.95% state tax plus mandatory county tax (0.5%–2.9%). Select your county to see your exact take-home pay.

Gross annual salary

Pay frequency

Filing status

Indiana countyAll 92 Indiana counties levy a county income tax (0.5%–2.9%)

Take-home per paycheck (biweekly)

$2,342.49

Gross pay (annual)$80,000

Deductions (annual)

Federal income tax−$9,049

IN state tax (2.95% flat)−$2,331

County tax (Marion County (Indianapolis) — 2.02%)−$1,596

Social Security (6.2%)−$4,960

Medicare (1.45%)−$1,160

Summary

Personal exemptions$1,000

IN taxable income$79,000

Annual take-home$60,905

Effective total tax rate23.9%

You keep per dollar76 cents

Calculate for other states

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2026 federal + IN state tax rates · Updated April 2026

How to Use This Calculator

Tab "Take-Home Pay"

Enter your gross annual salary, pay frequency, and filing status. Select your Indiana county from the dropdown — every Indiana resident pays county income tax, with rates ranging from 0.5% to 2.864%. Marion County (Indianapolis) charges 2.02%, Allen County (Fort Wayne) 1.48%, Hamilton County 1.11%. If your county isn't listed, choose "Other county" and enter the rate manually. Under "More options," add dependents (each worth a $1,500 exemption), 401(k) contributions, and health insurance premiums.

Tab "Tax Breakdown"

See a visual pie chart showing exactly where your money goes — federal tax, Indiana's 2.95% flat state tax, county tax, Social Security, and Medicare. The chart updates instantly as you change inputs.

Tab "Compare Filing Status"

Compare Single vs Married Filing Jointly vs Head of Household side by side. Indiana's flat 2.95% rate doesn't change by filing status, but MFJ filers get an extra $1,000 personal exemption (2 persons vs 1). The main difference is driven by federal brackets and standard deductions.

The Formulas

Federal Income Tax (2026 brackets):
1. Taxable income = Gross salary - Pre-tax deductions - Standard deduction ($15,750 Single / $31,500 MFJ / $23,500 HoH)
2. Apply progressive brackets (10% to 37%)

Indiana State Income Tax (2.95% flat):
IN taxable = Gross - Personal exemptions ($1,000/person + $1,500/dependent) - Pre-tax deductions
State tax = IN taxable x 2.95%
Note: Indiana does NOT use a standard deduction — it uses personal exemptions instead.

County Income Tax (mandatory, all 92 counties):
County tax = IN taxable income x County rate
County tax is computed on Indiana taxable income (not gross wages).
Rates: Marion 2.02% | Allen 1.48% | Hamilton 1.11% | Lake 1.50% | St. Joseph 1.75% | Elkhart 2.00%

FICA (Federal Insurance Contributions Act):
Social Security = 6.2% x min(Wages, $184,500)
Medicare = 1.45% x Wages
Additional Medicare = 0.9% x max(0, Wages - $200,000)

All figures use 2026 IRS rates. Indiana rate from in.gov/dor (2.95% effective 2026, reduced from 3.00% in 2025). County rates from Indiana Department of Revenue Departmental Notice #1.

Example

$80,000 salary, Single, Marion County (Indianapolis)

Filing Single, no dependents. IN taxable income = $80,000 - $1,000 personal exemption = $79,000. State tax = $79,000 x 2.95% = $2,331. County tax = $79,000 x 2.02% = $1,596.

Gross annual salary$80,000

Federal income tax-$9,049

Indiana state tax (2.95%)-$2,331

Marion County tax (2.02%)-$1,596

Social Security (6.2%)-$4,960

Medicare (1.45%)-$1,160

Annual take-home$60,904

Biweekly paycheck$2,342

The combined state + county tax in Marion County is 4.97% on taxable income — $3,927 on this salary. In a lower-tax county like Hamilton (1.11%), total state+county drops to $3,208, saving $719/year.

Frequently Asked Questions

How does Indiana's flat tax work?▼

Indiana levies a flat 2.95% income tax on all taxable income (reduced from 3.00% in 2025). Unlike most states, Indiana does not use a standard deduction. Instead, it provides personal exemptions: $1,000 per person ($2,000 for married filing jointly) plus $1,500 per dependent. Your Indiana taxable income is gross salary minus these exemptions and any pre-tax deductions. For example, on $80,000 single with no dependents: taxable = $79,000, state tax = $79,000 x 2.95% = $2,331.

Why does every Indiana county have an income tax?▼

Indiana is one of the few states where every county levies its own income tax. All 92 counties impose rates between 0.5% and 2.864%, set by county councils to fund local services, education, and infrastructure. Unlike Ohio's municipal tax (on gross wages), Indiana's county tax is computed on your Indiana taxable income — the same base used for the state tax. This means your personal exemptions and pre-tax deductions reduce both state and county tax.

What is the total tax burden in Indianapolis (Marion County)?▼

Indianapolis residents pay a combined state + county rate of 4.97% (2.95% state + 2.02% Marion County) on Indiana taxable income. On an $80,000 single-filer salary, that's $3,927 in state and county tax. Add federal tax ($9,049) and FICA ($6,120), and your total tax burden is about $19,096, leaving $60,904 take-home. Marion County's 2.02% rate is the most common rate among Indiana's major metros.

How does Indiana compare to Ohio, Illinois, and Michigan?▼

Indiana's combined state+county rate (3.45%–5.8%) sits in the middle. Ohio charges 2.75% state + 0–2.5% municipal (on gross wages). Illinois has a flat 4.95% with no local income tax. Michigan is flat 4.25% with some city taxes (Detroit 2.4%). Kentucky charges a flat 4.0%. On $80,000 single: Indiana (Marion) total state/local = $3,927; Ohio (Columbus) = $3,051; Illinois = $3,960; Michigan (no city) = $3,400. Indiana's mandatory county tax makes the effective rate higher than the 2.95% headline suggests.

Are Indiana tips and overtime tax-exempt?▼

Indiana conforms to federal treatment of tips and overtime for state tax purposes. If federal legislation provides deductions or exclusions for tip income or overtime pay, Indiana follows suit. For 2026, check whether the federal "No Tax on Tips" and "No Tax on Overtime" provisions have been enacted — if so, those amounts would be excluded from both federal and Indiana taxable income, reducing your state and county tax as well.

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