Retirement taxes by state
How Indiana taxes retirement income in 2026
Indiana has a flat 2.95% income tax. Here's how Indiana treats Social Security, retirement-account withdrawals, pensions and Roth conversions in 2026 — and what that means in dollars: a retired couple, both 67, with $98,000 of income pays about $1,357 in Indiana income tax.
Updated October 2026 · 2026 tax year
Indiana at a glance
- Flat 2.95% income tax.
- Social Security isn't taxed.
- Extra $1,000 deduction per person from age 65.
- Changes already passed into law for 2027 are included.
Indiana retirement tax questions
Does Indiana tax Social Security?
No. Social Security isn't taxed.
Does Indiana tax 401(k) and IRA withdrawals?
Yes, at the state's regular income tax rates. Indiana has no special exclusion for retirement-account withdrawals. Also: extra $1,000 deduction per person from age 65.
Does Indiana tax pensions?
Yes, at the state's regular income tax rates. Indiana has no special pension exclusion.
Does Indiana tax Roth conversions?
Yes. A Roth conversion counts as income in Indiana in the year you convert, taxed at the state's regular rates. Qualified Roth withdrawals later aren't taxed.
What is Indiana's income tax rate in 2026?
Indiana has a flat 2.95% income tax.
What retirees actually pay in Indiana: three examples
Calculated with Retirology's tax engine under 2026 law, using each state's standard deduction, its retirement breaks and the 2026 federal rules for how much Social Security is taxable. For the retired couple, Indiana ranks 47th lowest of the 50 states and DC.
| Household | Total income | Indiana tax | Share |
|---|---|---|---|
| Retired couple, both 67 $48,000 of Social Security, $40,000 drawn from IRAs and 401(k)s, and $10,000 of qualified dividends | $98,000 | $1,357 | 1.4% |
| Single retiree, 70 $30,000 of Social Security, a $25,000 pension and $15,000 of IRA withdrawals | $70,000 | $1,121 | 1.6% |
| Early-retired couple, both 56, converting to Roth A $60,000 Roth conversion and $20,000 of long-term gains and qualified dividends, living on savings | $80,000 | $2,301 | 2.9% |
State income tax only — before local taxes, property tax relief and credits not listed above. Federal income tax is extra and the same in every state.
Details and limits
2.95% for 2026, 2.9% from 2027. County income taxes (about 1.5% on average) aren't included.
Sources
Rates and rules for the 2026 tax year, from Retirology's state tax data (reviewed October 2026):
This page explains state tax rules in general terms. It isn't tax advice — check your state's official instructions or a tax professional for your situation.