2026 Tax Tables
Indiana's state income tax rate dropped to 2.95% for 2026 as part of Indiana's multi-year phased reduction. Employers collect exemptions via Form WH-4, with each personal exemption (Line 5) reducing annual income by $1,000. Note that Indiana also requires county income tax (COIT) withholding based on the employee's county of residence — county rates range from roughly 0.5% to 3.85% and must be looked up separately.
Calculate IndianaWithholding →State Tax Rate
2.95% flat
State W-4 Form
WH-4
Tax Year
2026
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Indiana's state income tax rate is 2.95% for 2026, reduced from 3.05% in 2025 as part of Indiana's phased rate reduction plan. This is the state rate only — county income tax (COIT) also applies.
Each personal exemption claimed on Line 5 of the Indiana WH-4 reduces the employee's annualized wages by $1,000. An employee claiming 3 exemptions would reduce their annual taxable income by $3,000 before the 2.95% rate is applied.
Indiana requires employers to withhold county income tax (COIT) based on the employee's county of residence — not the work location. County rates range from roughly 0.5% to 3.85%. Withhold Right calculates the state portion only. Look up the county rate at the Indiana Department of Revenue website.
No. Indiana requires its own WH-4 form (Withholding Exemption and County Status Certificate). The WH-4 also captures the employee's county of residence for COIT purposes.