Indiana’s 2.95% state rate, plus county tax
Indiana taxes a resident’s gain at 2.95% for 2026, the state rate set by its scheduled reductions. A single filer whose Indiana taxable income goes from $60,000 to $110,000 owes $1,475 more in state tax, from $1,770 to $3,245.
That is not the whole Indiana bill. Each county levies its own local income tax on Indiana residents, at rates that vary by county, and that tax applies to capital gains too. Indiana offers no general capital gains preference, but it does not tax gains from selling a home that qualifies for the federal exclusion, because Indiana starts from federal AGI. The worksheet keeps county tax out of the state estimate; enter a prepared final liability if you want both together.
Indiana approved resident annual comparison
Indiana’s revenue agency publishes a 2.95% individual income-tax rate for 2026. The state estimate applies that rate to approved Indiana taxable income. A $10,000 increase in the state taxable base produces $295 of state tax before usable credits. County income tax is a separate calculation and is not included merely because the state rate is known.
Capital-gain preparation begins with the actual federal-to-Indiana reconciliation, state additions and subtractions, deductions and exemptions. Resident and nonresident treatment and county liability depend on the applicable taxpayer facts, including the relevant residence / employment rules. A federal long-term gain does not by itself authorize a special Indiana preferential rate or a county rate of zero.
Use the annual resident mode for independently prepared Indiana taxable balances and complete usable state nonrefundable credits without and with the sale. The calculator applies 2.95% to each balance, caps credits at annual state tax and retains the difference. Enter final state liabilities when the comparison includes county tax, unsupported special assessments or residency allocation. Estimated payments and withholding remain payment records rather than credit inputs.
Indiana preparation checklist
- Actual state taxable bases after approved basis, netting, deductions and exemptions
- 2026 state rate is 2.95%
- County income tax prepared separately