Indiana state tax: Overview
Indiana has relatively high state income tax rates compared to other states. While the Hoosier State has a flat income tax rate of 3.15%, some Indiana counties impose their own income tax rates as well.
The state's sales and property taxes are reasonable compared to those in other states. However, Indiana's general sales tax rate is relatively high, while the median property tax rate in Indiana is comparatively modest.
[Data for this state tax guide was gathered from a number of sources including the U.S. Census Bureau, the state’s government website, and the Sales Tax Handbook. Property taxes are cited as a rate percentage rather than the assessed value.]
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Indiana income tax rate
Indiana currently has a flat rate of 3.15% of state adjusted gross income after modifications. (Counties also levy income taxes.)
- Social Security benefits are not taxed by the state.
- Starting with the 2024 tax year, all military income will be exempt from state income tax. Military pensions and Railroad Retirement benefits are also exempt.
- All other retirement income is taxed at the 3.15% rate.
- 401(k) and IRA distributions are taxable.
Indiana sales tax
Indiana's state sales tax rate is 7%. There are no local sales taxes in the state.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
How much is property tax in Indiana?
In Indiana, the median property tax rate is 0.84% of owner-occupied housing value, according to the Tax Foundation.
Indiana Property Tax Breaks for Retirees
Indiana offers two property tax breaks for older adults aged 65 or over. One is the "over 65 or surviving spouse deduction" and the other is the state's "over 65 circuit breaker credit."
Indiana gas tax
| Product | Tax Amount |
|---|---|
| Gasoline | 18 cents per gallon |
| Diesel | 16 cents per gallon |
Source: The Sales Tax Handbook
Indiana taxes on alcohol and tobacco
Indiana Tobacco Taxes
| Product | Tax Amount |
|---|---|
| Cigarettes | $1 per pack of 20 |
| Snuff | $0.09 per one-ounce tin |
| Other Tobacco Products | 24% of wholesale price |
Source: The Sales Tax Handbook
Indiana Alcohol Taxes
| Product | Tax Amount |
|---|---|
| Beer | $0.12 per gallon |
| Wine | $0.47 per gallon |
| Liquor | $2.68 per gallon |
Source: The Sales Tax Handbook
Indiana estate and inheritance taxes
There are no estate or inheritance taxes in Indiana.
Related Content
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
FSA Contribution Limits Are Higher for 2025FSA A flexible spending account allows you to build tax-free savings for certain medical expenses.
-
Florida Tax Deadline Extension: What You Need to KnowTax Relief The IRS extended federal tax return file time due to severe storms.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
-
IRS Expands Tax Breaks for Breast Cancer Screenings, ContraceptivesHealthcare Now you can get a tax deduction or reimbursement for certain medical expenses, like over-the-counter birth control and condoms.
