Indiana Tax Filing: State Tax, County Tax and Form IT-40

Updated October 22, 2026

State tax plus a county tax

Indiana taxes your income at the state level and then adds a county tax. Schedule CT-40 figures the county part. It uses a rate chart printed on the back of that schedule.

Two dates do the work. Your county of residence is the county where you kept your home on January 1. Your county of work is where your main work activity was on January 1. If you move to a new Indiana county later in the year, the old county still counts until next year.

• Two Indiana homes on January 1? The tie-breakers are where you were registered to vote, then where your car was registered, then where you spent most of your time.
• More than one job? Use the county where you worked the most hours and earned the most.
• Worked out of state? Enter county code 00.
• Retired or between jobs? Put your home county in both boxes.

Couples who lived in different counties on January 1 split their income and figure county tax separately. A credit is available for local income tax paid outside Indiana, but it only offsets the county tax.

Retirement, military and renter breaks

Indiana does not tax Social Security or railroad retirement benefits. You take those out on Schedule 2.

Service members can claim up to three separate deductions: one for active duty pay, one for military retirement or survivor benefits, and one for National Guard and reserve income. You cannot claim two of them on the same income. Combat zone pay is already untaxed, so it does not get a deduction. Enclose your military W-2 to claim the active duty deduction.

Renters may qualify for a deduction if the home they rented was subject to Indiana property tax. And if you claimed the federal earned income credit, you may qualify for Indiana's version. Fill out Schedule IN-EIC to claim it. Our estimated tax guide helps if you also have side income.

Which form, and how to file

• Form IT-40: full-year residents.
• Form IT-40PNR: part-year residents and nonresidents with Indiana income.
• Form IT-40RNR: full-year residents of Kentucky, Michigan, Ohio, Pennsylvania or Wisconsin whose only Indiana income is wages, salaries, tips or commissions.

If you filed a joint federal return, you file a joint Indiana return. If you filed separately, you file separately.

The Department of Revenue runs INTIME, an online portal for filing, paying and checking refunds. It also runs INfreefile for eligible taxpayers and a volunteer program that gives free return help to people with low incomes, older people and others with special needs. A refund on an e-filed return usually takes 10 to 14 business days. A mailed return can take up to 12 weeks.

The return is due April 15. A federal extension gives you an Indiana extension with no extra step. Without one, file Form IT-9 by April 15. Either way the new filing date falls in November, and the booklet for your tax year gives the exact day. Interest still runs on unpaid tax from April 15. See our extension guide.

Reciprocity, nonresidents and military

Indiana has reciprocity with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin, but only for wages, salaries, tips and commissions. People from those states with other Indiana income, such as rent or business profit, file Form IT-40PNR instead of IT-40RNR.

Nonresidents should be ready to prove it. The Department says it may ask for a driver's license, proof of home ownership or other proof of non-residency.

Military rules in the booklet:

• If Indiana was your home when you enlisted, you stay an Indiana resident wherever you are stationed.
• If you change your home of record during the year, file IT-40PNR and enclose Military Form DD-2058.
• If you are stationed in Indiana but live legally in another state, you do not file unless you earned non-military income in Indiana.
• If your spouse is a legal resident of another state and you filed a joint federal return, file IT-40PNR.

Moving to or from Florida

You are a full-year Indiana resident if your legal residence stays in Indiana from January 1 through December 31. Time away does not end that status when the stay is temporary. If you moved your legal residence during the year, you file as a part-year resident on Form IT-40PNR.

The booklet speaks directly to retirees who spend part of the year in another state. You can still be a full-year Indiana resident if you:

• keep your legal residence in Indiana and plan to come back during the year;
• keep your Indiana driver's license;
• keep your Indiana voting rights; and
• claim a homestead deduction on your Indiana home.

If you are leaving Indiana for good, those four ties are the ones to review. Our moving to Florida tax page covers the Florida side.

Withholding papers and estimated tax

Indiana asks you to report state tax withheld and county tax withheld separately. They usually show up in boxes 17 and 19 of your W-2. You must enclose your withholding statements and Schedule IN-W. If you skip them, your refund shrinks or your balance grows. The Department also asks for the best readable copy you have, because it checks every number against the statement.

Estimated tax is a known trouble spot. The booklet says not paying estimated tax properly is one of the most common errors on Indiana returns. If you expect to owe more than a set amount after withholding, use Form ES-40. INTIME lets you schedule all four payments up to a year ahead.

One more note. Indiana ties its tax code to the federal code as of a set date. The 2025 booklet used January 1, 2023, and 2026 legislation proposed moving that date forward. Check the Department's current booklet for your tax year.

Mistakes that delay an Indiana return

• Using the wrong county code. It is your January 1 home and job, not today's.
• Leaving out Schedule IN-W or the withholding statements.
• Filing separately for Indiana after a joint federal return. The two must match.
• Not marking the Amended box on a corrected return. The Department says this can delay processing.
• Late withholding statements or a business loss on Schedule C. The booklet names both as common reasons for a slower refund.
• Debts that take your refund. Indiana can apply it to overdue state taxes, child support, student loans and some other debts, and you get a letter explaining it.

See our tax deadlines page for federal dates.

Filing from Indiana with Zero Fuss Taxes

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FAQ

Nearby state guides

Sources

• in.gov/dor/i-am-a/individual/tax-filing-deadlines/
• forms.in.gov/Download.aspx?id=16915
• irs.gov/filing/individuals/when-to-file

General information, not tax advice for your specific situation. Rules can change, so check the official sources below. Zero Fuss Taxes is a PTIN-holding tax preparation firm. We are not a CPA firm, enrolled agents or attorneys.