For the 2025 tax year, the Indiana state individual income tax rate is a flat 3.0%.
This is a reduction from the 3.05% rate for the 2024 tax year and is part of a plan to gradually decrease the rate to 2.9% by 2027.
Key Tax Details for Indiana
State Income Tax: A flat 3.0% rate is applied to all individual taxable income, regardless of income level or filing status.
Local Income Tax: In addition to the state tax, all 92 Indiana counties impose their own local income taxes, which vary by county and range from approximately 0.5% to 3.0%. You can find the specific rate for your county on the Indiana Department of Revenue website.
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Sales Tax: Indiana has a statewide sales tax rate of 7%, with no additional local sales taxes.
Other Taxes: Indiana does not have an inheritance or estate tax. Groceries and prescription drugs are exempt from sales tax, but clothing is taxable.
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