📅 2026 Update: Recent Changes to Indiana State Tax

Since the original article was published, Indiana has made significant changes to its tax laws. One of the most noteworthy updates is the introduction of a Pass-Through Entity Tax (PTET) in February 2023. This law is similar to entity-level taxes seen in other states, such as Illinois.

Readers can find more detailed information in the earlier sections below.

🏛️ Indiana Pass-Through Entity Tax (PTET)

Indiana's PTET allows certain business entities, like partnerships and S corporations, to pay taxes at the entity level. This change aims to provide potential tax savings for business owners. It mirrors similar laws passed in several other states, including Iowa and Kentucky, enhancing Indiana's tax landscape.

📊 Filing Requirements for PTET

Entities that elect to pay the PTET must file specific forms with the state. This includes providing information about their income and deductions. The filing requirements help ensure compliance with the new tax structure.

💸 Impact on Business Owners

The introduction of PTET may affect how business owners plan their taxes. By allowing businesses to pay taxes at the entity level, owners might benefit from reduced personal tax liability. This change can lead to more strategic financial planning for partnerships and S corporations.

⏰ Important Deadlines

The deadlines for filing the PTET-related documents are crucial. Business owners should be aware of these timelines to avoid penalties. Filing on time can help ensure compliance and maximize potential tax benefits.

📌 Key Points Summary

  • 🏛️ Indiana introduced a Pass-Through Entity Tax in February 2023.
  • 📊 Filing requirements are specific for the PTET.
  • 💸 The PTET may benefit business owners by reducing personal tax liability.
  • ⏰ Important deadlines must be followed for filing PTET documents.

💡 Tips for Indiana State Tax Filings

It's essential to go over the details of your own situation with your attorney. This ensures you understand the nuances of Indiana's tax laws.

🔍 Understand the New PTET

Familiarize yourself with the new Pass-Through Entity Tax if you own a partnership or S corporation. Knowing how it works can help you better navigate your tax obligations.

📝 Keep Accurate Records

Maintaining accurate financial records is vital for filing taxes. This includes tracking income, expenses, and deductions related to your business activities. Good record-keeping simplifies the filing process.

📅 Be Aware of Deadlines

Mark important tax deadlines on your calendar. This includes deadlines for the PTET and other related business tax filings. Staying organized helps avoid late fees and penalties.

📞 Use Free Assistance Programs

Explore free assistance programs available through the IRS. Programs like Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer valuable support in preparing your tax returns.

📚 Review State Resources

Visit Indiana's official tax website for the latest updates on tax rates and regulations. This resource provides essential information for staying compliant with state tax laws.

🏆 Indiana State Tax Services Ranked by User Reviews (2026)

This section highlights various tax services available to Indiana taxpayers. Each service's ranking comes from Trustpilot reviews checked in October 2026. Ratings can change based on customer feedback, and star ratings are just one aspect of performance; unhappy customers often leave more reviews.

🥇 1. SMAART Tax

SMAART Tax holds a Trustpilot score of 4.4. It has been known for its virtual tax services, catering to clients in all 50 states. However, some users mention limited in-person consultation options, which may not suit everyone.

🥈 2. KBO Tax & Accounting Services

KBO Tax & Accounting Services has a Trustpilot score of 4.5. It is recognized for nationwide tax preparation services and additional bookkeeping and accounting support. Users should note that it has limited in-person office locations.

🥉 3. Jackson Hewitt Tax Service

Jackson Hewitt Tax Service averages a rating of 4.2. It is known for its wide range of tax preparation services available at locations nationwide. Some reviewers have raised concerns about customer service responsiveness, which potential clients should consider.

4️⃣ Libre Tax Service

Libre Tax Service has a Trustpilot score of 4.1. It specializes in online tax preparation and provides IRS audit defense services. Some users report challenges with website navigation, which could impact the user experience.

5️⃣ TaxSlayer

TaxSlayer holds a Trustpilot score of 4.0. It offers online tax preparation software at affordable prices. However, there are occasional reports of software glitches that users might encounter.

6️⃣ Advanta Tax

Advanta Tax has a Trustpilot score of 4.3. It provides nationwide tax services, including IRS resolution and state tax debt assistance. Customers have reported some delays in service, which could affect timely resolutions.

🆓 Free Tax Assistance Options

Many free assistance programs are available to help with tax preparation. These include IRS Free File for eligible taxpayers and the Volunteer Income Tax Assistance (VITA) program. Both options provide valuable resources for individuals needing assistance with their tax filings.

🔎 Factors to Compare When Choosing a Tax Service

  • 💬 User reviews can give insight into customer experiences.
  • 📍 Location matters for in-person versus online services.
  • 💻 Service offerings should align with your specific tax needs.
  • 📞 Customer support responsiveness can affect your experience.
  • 💰 Pricing is crucial for budget-conscious clients.

❓ Frequently Asked Questions

❓ What is the Pass-Through Entity Tax in Indiana?

The Pass-Through Entity Tax in Indiana allows certain business entities to pay taxes at the entity level. This can potentially lower personal tax liabilities for business owners.

📅 When are the deadlines for filing the new tax forms?

Important deadlines for the new PTET must be followed to avoid penalties. These dates are specified by the Indiana Department of Revenue and should be checked regularly.

💡 What resources are available for tax help in Indiana?

Indiana taxpayers can access various resources, including the state tax website and free support programs like VITA. These resources can assist with tax preparation and filing.

📝 What forms do I need for the Pass-Through Entity Tax?

Businesses must file specific forms related to the PTET to comply with the new law. These forms include details about income and deductions for the entity.

💸 How can I maximize my tax savings in Indiana?

To maximize tax savings, keep accurate records of income and expenses. Understanding the new PTET and utilizing available credits and deductions can also help reduce tax liability.

📞 Is professional help necessary for filing taxes?

While many taxpayers handle their own filings, professional help can be beneficial, especially for complex situations or new laws like the PTET. Evaluating personal circumstances can help determine the need for assistance.

⚖️ Recent Court Cases Related to Indiana State Tax

Several recent court rulings have addressed issues related to Indiana's tax laws. These rulings can affect how taxes are applied and interpreted in the state.

For more information, you can browse more rulings on the news page.

End of October 2026 Update





There are a number of taxes applicable to the state of Indiana, which includes one of the highest sales tax rates in the nation.

Indiana state sales tax – 7%, food and drugs exempt.  Increased to compensate for capping property taxes.

 

Indiana State Tax

Indiana personal income tax 


 

3.4% of federal adjusted gross income, flat tax

Tax returns are due on April 15

There are 92 counties in Indiana, each with a unique tax rate for residents and non-residents.  These taxes can range from less than 1% to slightly over 3%.  Information on these tax rates is available from the State of Indiana Department of Revenue.  The highest rate is Pulaski County, at 3.14%, followed by Jasper County at 3.05%.

 


Indiana property taxes

📝 See Also

Fund local governments but approved by state

No more than 1% of property value

2% cap on farmland, rentals

 


 


Indiana excise taxes

Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes.

Funds road repair and health programs

$.99 tax on cigarettes

$2.68 tax per gallon of liquor

 


Indiana inheritance tax 

There are no inheritance taxes on estates left to spouses or charitable organizations.  Parents and children can be exempted on estate taxes, up to $100,000 each.  Brothers, sisters and their children re exempted up to $500 each.  There are also no taxes on amounts paid to other beneficiaries totaling less than $100.  Any amounts exceeding the exemptions must be reported to the state on Form I-H6.  This also applies to non-residents as well as residents of Indiana.

 


Indiana payroll taxes

State Disability Insurance – none

State Unemployment Insurance - .565% to 8.362%

 


Exemptions

$1,000 exemptions for

Federal exemptions

Persons age 65 and older

Persons suffering from blindness

There is a $1,500 tax exemption for some children and an addition $500 exemption for seniors with an income less than $40,000.

 


Taxable income

Wages

Salaries

Commissions

Tips

Interest

Dividends

Royalties income

Rental income

Farm income

Business income

Pensions

Annuities

Partnership/shareholder income

Gain from sale of property

 


Corporate income tax - 6.5%


 


 


Misc

Social Security, railroad retirement and life insurance benefits are not taxed under Indiana law.  Gaming winnings from the lottery, casinos or horse racing are taxed.

Military personnel receive a 180 day extension to file taxes upon leaving a combat zone.  They must write “combat zone” on the tax form above their social security number.  Property tax depends on the county but will generally not be assessed for those that did not reside in the county at the start of the year.

Tax forms need not be filed if the exemptions exceed gross income.  Any income that was withheld to pay taxes can be claimed as a refund by this resident.  One should notify the Indiana tax authorities if this is the case to ensure that you truly do not need to file a tax return and how you can claim your tax refund.