Residents of Indiana have to pay state income tax. The state employs a flat income tax, meaning you pay the same tax rate regardless of income.
Indiana personal income tax rates: Table
All Indiana residents pay the same tax rate.
|Indiana personal income tax rates|
|Tax rate||Single||Married, filing jointly|
|3.23%||Greater than $0||Greater than $0|
|Source: Indiana Department of Revenue|
Indiana does not have standard deductions you can claim on your state income tax return. However, there are personal exemptions you can use to lower your tax liability. Single filers can claim $1,000, while married households can receive a $2,000 exemption. Indiana also has a dependent option, equaling $1,000 for every qualifying member.
Who has to file Indiana state taxes?
If you live in Indiana with income totaling more than your exemptions, you must file a tax return. The same applies if you lived in the state for a portion of the year and earned income while here. If you made money from a company based in Indiana, you must file. Residents of Ohio, Kentucky, Wisconsin, Michigan, or Wisconsin earning wages only in Indiana need to use the IT-40RNR.
Companies based in Indiana would also need to complete a state income tax return. The top corporate tax rate is 5.5 percent.
Indiana sales tax rate: Table
Indiana scores at the top nationally in its sales tax rate.
|Indiana sales tax rate|
|Sales tax rate||National rank|
|Source: Tax Foundation|
Other things to know about Indiana state taxes
Indiana will charge specific tax rates on a few items. The gasoline tax is 53.65 cents per gallon, making them one of the most expensive states in this regard. Moreover, the cigarette tax of $2.98 (dollars per 20-pack) is also high nationally (8th).
Meanwhile, Indiana makes it simple for residents and corporations to find the tax credits and forms they need through the Indiana Department of Revenue website. While there, you can also file your taxes online, make installment payments on your tax liability, and much more.