Indiana

SALES TAX

  • Statewide: 7.0%
  • Counties cannot levy an additional sales tax.
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
    • Prepared Foods: 9%
  • Gasoline Tax: 68.19 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 78.40 cents/gallon (Includes all state, local, and federal taxes)
  • Cigarette Tax: .995 cents/pack of 20

 

Personal Income Tax

  • Personal Income Tax Rate Range: 3.23%
  • Standard deduction: None
  • Personal Exemption Allowance: $1,000. Dependent Exemption: $1,000 (may take an additional $1,500 if dependents meet certain conditions)
  • Itemized Deductions Allowed?: Generally not allowed
  • State allows county- and city-level income tax. 
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates
    • Private pensions: Taxable at ordinary income tax rates
    • Public Pensions: Taxable at ordinary income tax rates except federal pensions for taxpayers 62 and older who may deduct $16,000 from Adjusted Gross Income less Social Security
  • Military Pay
    • Active Duty Pay: Up to $5,000 exempt. Remainder taxable to the extent included in federal AGI
    • Military Retirement Pay: Up to $6,250 exempt if 60 and over (plus 75% in 2021); new law will phase in an exemption that will be 100% for taxable years beginning with 2022 tax year.
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Up to $6,250 exempt (plus 75% in 2021). Fully exempt beginning with 2022 tax year.

 

Property Tax

  • Local municipalities average .85% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value
  • Relief programs for:
    • Owner-occupied: Can exempt the lesser of 60% of assessed value or $45,000; supplemental deduction available.
    • Mortgage:
      • 65 and over: Can exempt the lesser of half of assessed value or $14,000 on house value of less than $200,000 if income less than $30,000
      • 65 and over Freeze: Assessed value cannot increase more than 2% if income less than $30,000
      • Disabled Veterans/Surviving Spouse (not remarried): Can exempt up to $24,960 of assessed value if meet certain requirements (WWI surviving spouse: $18,720)    
      • Disabled: Can exempt $12,480 of assessed value if income less than $17,000
  • Personal Property Tax: Yes. Rates and exemptions vary.

 

Inheritance & Estate Taxes: None

 

Department of Revenue website: www.in.gov/dor

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