If you lived in Indiana during the year or earned income from an Indiana source, you likely need to file an Indiana state tax return on Form IT-40, due April 15. The state charges a flat 2.95% income tax for 2026, and your county of residence on January 1 adds its own rate on top.
Who Has to File
Indiana requires a return from every resident whose gross income exceeds their personal exemptions.1Indiana General Assembly. Indiana Code 6-3-4-1 – Who Must Make Returns The base personal exemption is $1,000, so almost anyone with a paycheck or meaningful investment income is above the line.2Indiana Department of Revenue. Income Tax Information Bulletin 117 – Personal Exemptions and Special Rules Full-year residents owe Indiana tax on all income, no matter where it was earned. Work remotely from your Indianapolis apartment for an Illinois employer, and that income is still Indiana income.
Part-year residents file for the portion of the year they lived in the state. Nonresidents file if they received Indiana-source income such as wages from an Indiana employer, rent from Indiana property, or business profits sourced to the state.3Indiana Department of Revenue. Individual Income Tax Overview
One boundary matters for commuters: Indiana has reciprocal income tax agreements with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin.4Indiana Department of Revenue. Income Tax Information Bulletin 28 – Application of State and County Income Taxes to Residents with Out-of-State Income and Nonresidents with Indiana Source Income If you live in one of those states and your only Indiana income is wages, salaries, tips, or commissions, you file the short Form IT-40RNR and owe no Indiana state tax on those wages, only your home state’s tax. If your Indiana employer withheld Indiana tax anyway, the IT-40RNR is how you get it back, and submitting Form WH-47 to your employer stops the withholding going forward. Reciprocity does not cover rental income, self-employment, or business profits; for those, you file Form IT-40PNR as a regular nonresident.
What You’ll Owe: State Rate Plus County Rate
Indiana’s flat individual income tax rate is 2.95% for 2026 and is scheduled to drop to 2.90% in 2027.5Indiana Department of Revenue. Rates Fees and Penalties It applies to your Indiana adjusted gross income, which starts from your federal AGI and then gets adjusted up or down for items the state treats differently.
Every Indiana county also levies its own income tax, and the rate is locked in by where you lived on January 1 of the tax year. Move to a new county in March, and you still owe the old county’s rate for the whole year.6Indiana General Assembly. Indiana Code 6-3.6-8-3 – County Residency and Place of Business or Employment Determination For 2026, county rates run from 0.50% in Porter County to 3.00% in Randolph County.7Indiana Department of Revenue. How to Compute Withholding for State and County Income Tax Combined with the state rate, you’re paying somewhere between about 3.45% and roughly 6% depending on your county. The DOR publishes a county tax rate table each year.
Which Form, and What to Gather
Three forms cover almost everyone:
- Form IT-40 for full-year residents.
- Form IT-40PNR for part-year residents and nonresidents.
- Form IT-40RNR for residents of the five reciprocal states whose only Indiana income is wages.3Indiana Department of Revenue. Individual Income Tax Overview
Before you start, pull together Social Security numbers for yourself, your spouse, and your dependents; your W-2s and any 1099s; your completed federal return (your federal AGI is the starting number on the Indiana form); and your county of residence as of January 1.8Indiana Department of Revenue. What You Need to File a Tax Return Double-check the Indiana withholding in Box 17 of your W-2 so you get credit for what your employer already sent in.
Deductions and Credits That Move the Number
Indiana has a short list of deductions and credits that are easy to miss and worth claiming.
Personal and Dependent Exemptions
Every filer gets a $1,000 personal exemption, plus another $1,000 for a spouse on a joint return and $1,000 per dependent. Qualifying dependent children add an extra $1,500 exemption, which jumps to $3,000 in the first year the child qualifies. Adopted children receive a separate $3,000 exemption on top of the other amounts.2Indiana Department of Revenue. Income Tax Information Bulletin 117 – Personal Exemptions and Special Rules
Renter’s Deduction
If you rent your Indiana home, you can deduct up to $3,000 of rent paid during the year, or $1,500 if you’re married filing separately.9Indiana Department of Revenue. Income Tax Information Bulletin 38 – Renter’s Deduction At 2.95%, the full deduction is worth about $88 off your state tax. Small, but it takes no paperwork beyond knowing what you paid.
Homeowner’s Property Tax Deduction
If you own your home, you can deduct up to $2,500 of Indiana property taxes paid on your principal residence, or $1,250 if married filing separately.10Indiana Department of Revenue. Deductions
Indiana 529 Plan Credit
Contributions to an Indiana 529 education savings plan earn a credit of 20% of the amount contributed, capped at $1,500 per year ($750 if married filing separately).11Indiana Department of Revenue. Income Tax Information Bulletin 98 – Indiana 529 Savings Plan Credit A $7,500 contribution maxes it out. Because it’s a credit, every dollar comes straight off your tax bill. It covers contributions for college expenses or K-12 tuition.
Social Security and a Few Others
Indiana does not tax Social Security benefits, so you subtract any taxable Social Security that came through from your federal return.12Indiana Department of Revenue. Income Tax Information Bulletin 26 There are also deductions for private school and homeschool expenses ($1,000 per qualifying child), civil service annuities (up to $16,000 for filers 62 and older), and disability retirement income.10Indiana Department of Revenue. Deductions Low-income seniors 65 and older may qualify for the Unified Tax Credit for the Elderly, which can wipe out their state tax entirely.13Indiana Department of Revenue. Seniors
How to File and Pay
The DOR runs an online portal called INTIME (Indiana Taxpayer Information Management Engine) that accepts electronic filings.14Indiana Department of Revenue. INTIME Most commercial tax software also supports Indiana. E-filed returns process faster, and refunds come faster. Paper filers mail the IT-40 with W-2s and schedules attached to the P.O. Box listed in the form instructions, which differs depending on whether you owe money or expect a refund. Once filed, you can check status with the “Where’s My Refund?” tool on the DOR site using your Social Security number and exact refund amount.
If you owe, INTIME takes bank payments (ACH/e-check) at no fee, and Discover, MasterCard, and Visa debit and credit cards with a processing fee.15Indiana Department of Revenue. Payments and Billing You can also mail a check or money order, or pay in person at a DOR district office.
Deadline and Extensions
Indiana’s filing deadline is April 15, the same as federal.16Indiana Department of Revenue. Extension of Time to File If you can’t file by then, you have two routes:
- If you filed federal Form 4868, Indiana automatically gives you an extra month beyond the federal extension deadline. Federal runs to October 15, so Indiana’s extended due date lands in mid-November. For the 2025 tax year (filed in 2026), that’s November 16, 2026.16Indiana Department of Revenue. Extension of Time to File
- If you don’t have a federal extension, file Indiana Form IT-9 through INTIME or by mail to request the same extended deadline.17Indiana Department of Revenue. Income Tax Information Bulletin 18 – Instruction for Obtaining Extensions of Time to File Indiana Individual Income Tax Returns
An extension gives you more time to file, not more time to pay. The late-payment penalty is 10% of what you owe or $5, whichever is greater.17Indiana Department of Revenue. Income Tax Information Bulletin 18 – Instruction for Obtaining Extensions of Time to File Indiana Individual Income Tax Returns It’s waived if you pay at least 90% of your bill by April 15 and the rest by the extended deadline.16Indiana Department of Revenue. Extension of Time to File Interest on any unpaid balance still accrues from April 15 regardless.
Quarterly Estimated Payments
If you have income that isn’t subject to withholding (self-employment, rentals, significant investment gains), you may need to pay Indiana estimated tax quarterly. The trigger is owing $1,000 or more in combined state and county tax for the year after withholding and credits.18Indiana Department of Revenue. Income Tax Information Bulletin 03 – Payment of Indiana Estimated Tax by Individuals
Payments use Form ES-40 and follow the same quarterly schedule as federal estimates:15Indiana Department of Revenue. Payments and Billing
- April 15 for the first quarter.
- June 15 for the second quarter.
- September 15 for the third quarter.
- January 15 of the following year for the fourth quarter.
If a due date falls on a weekend or holiday, it moves to the next business day. Underpayment triggers a penalty computed on Schedule IT-2210, which you attach to your return. The simplest safe harbor is to pay at least 100% of last year’s total state and county tax across the four installments.