2009 Tax Guide
State taxes
taxes
State taxes: Indiana

Indiana's state tax rate is a flat 3.4 percent of a taxpayer's federal adjusted gross income. Counties also assess separate income taxes. More on Indiana taxes can be found in the tabbed pages below.

Personal income tax

  • Indiana collects from its residents a flat tax of 3.4 percent of federal adjusted gross income with modification.
  • Indiana tax returns are due on April 15, or the next business day if that date falls on a weekend or holiday.
  • Most Indiana counties also collect income tax. The state of Indiana's Department of Revenue releases a list of counties and their tax rates.

Sales taxes

  • On April 1, 2008, Indiana's state sales tax rate increased to 7 percent.
  • The increase, the first since 2002, was due to the addition of a penny to the state sales tax to offset property tax cuts.

Personal and real property taxes

  • Property taxes are administered at the local level with oversight by the Indiana Department of Local Government Finance.
  • The Department of Local Government Finance has developed summaries to provide taxpayers information about property taxes in their counties. Each county summary provides a property tax breakdown for 2006 and 2007 and shows the shift of property tax burden between property classes. Additionally, the summaries break down where each property tax dollar goes, show a 2006-2007 comparison of local spending by unit and list recent debt issued by unit.

Inheritance and estate taxes

An inheritance tax return, IH-6, must be filed by an estate's personal representative within nine months of an Indiana resident's death. The return is not required if the amount left to an heir is less than the allowable exemption, which ranges from the entire estate, if left to a spouse or charitable organization, to $100 for other beneficiaries.

Other Indiana tax facts

  • Qualified Indiana taxpayers can file state returns at I-File, the Indiana Department of Revenue's free Web-based tax filing service.
  • The Indiana military service deduction limitation has been increased from $2,000 to $5,000 per person. This deduction is available to offset active, reserve, Indiana National Guard and retirement pay. In addition, a new Indiana income tax deduction is available for certain service members who have been called up to active duty on involuntary orders, or if their unit was federalized. More details on these changes can be found on the Indiana government Web site.
  • A list of Indiana's various taxes and their rates can be found on the Indiana Department of Revenue Web site.
 
Additional information is available at the Indiana Department of Revenue Web site.

To download tax forms on this site, you will need to install a free copy of Adobe Acrobat Reader. Click here for instructions.

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