Indiana Taxes for New Residents: Income, County, and Property Tax

Taxes are one of the first things people ask me about when they are weighing a move to Greater Lafayette. Fair question. You want to know what your paycheck and your house will actually cost.

Here is a plain-English overview of how Indiana taxes work for new residents. I am a REALTOR, not a tax professional, so treat this as a map, not advice. For your own return, talk to a CPA. I link every rule to the state page it comes from so you can check it.

The short version

• Indiana has a flat state income tax.
• Counties add a local income tax on top of it.
• The year you move, you likely file as a part-year resident.
• Property taxes are capped based on assessed value, and the lowest cap depends on filing for the homestead deduction.
• Vehicles carry an annual excise tax at registration.

State income tax

Indiana uses a single flat rate rather than brackets. The Indiana Department of Revenue's rates, fees, and penalties page lists the individual adjusted gross income tax rate for 2026 as 2.95% and notes a scheduled change to 2.90% in 2027.

A flat rate makes the state piece easy to estimate. The part that takes more thought is the county tax and your move-in year.

County income tax

Every Indiana county sets its own local income tax, and rates can change during the year. The Department of Revenue keeps the current and past rates on its county tax rates by year page, so look up Tippecanoe County or whichever county you are considering there rather than trusting a number from an old article.

The timing rule matters for new residents. The Department of Revenue's individual income tax FAQ explains that county tax is based on your county of residence, or for nonresidents your county of employment, on January 1.

So if you move here in the summer, your county tax situation for that first year can look different from every year after. This is one of the main reasons I suggest a CPA for the move year.

It also matters if you are choosing between counties. Greater Lafayette buyers sometimes look at homes just over a county line, and the local income tax is one factual piece of that comparison, along with commute, schools, and property taxes.

Your first Indiana return: part-year resident

The year you arrive, you are usually a resident of two states for part of the year each. The Department of Revenue's individual income tax overview says full-year residents file Form IT-40, while part-year residents who received income while living in Indiana file Form IT-40PNR. The same page lists April 15 as the annual due date.

You will likely also have a part-year return in the state you left, if that state has an income tax. How income gets split between the two, especially bonuses, relocation payments, or the sale of your old home, is exactly the kind of detail a CPA should handle.

Things to gather during the move year

• Your exact move date and proof of it, such as a lease end or closing date.
• Final pay stubs from your old job and first pay stubs from the new one.
• Any relocation package paperwork from your employer.
• Closing statements for the home you bought and any home you sold.

If your employer is covering moving costs, what relocation packages typically cover is worth a read, since some benefits can show up as taxable income.

Remote workers

If you moved here but still work for an employer in another state, withholding can get messy. Make sure your employer updates your work location and state withholding, and confirm with a tax professional which state gets which piece.

Property taxes for new homeowners

This is where I see new residents lose real money, and it is completely avoidable.

The caps

Indiana limits property taxes as a share of gross assessed value. The Department of Local Government Finance's citizen's guide to property tax explains that for a homestead, the caps keep you from paying more than 1 percent of gross assessed value, and the state's circuit breaker fact sheet covers the higher caps for other residential and commercial property.

That lowest homestead cap is tied to having the homestead deduction on your primary residence. Which brings us to the most important step.

File for the homestead deduction

The deduction does not follow the house from the seller to you. You apply with the county auditor. The DLGF's deductions and credits page explains that applications filed before the annual deadline apply to the next year's tax bill, and gives the example that filing on or before January 15, 2026 applies the deduction to the 2025 pay 2026 bill.

Your title company may handle the filing at closing, and it may not. Ask. I walk through the details in the Indiana homestead deduction after you buy.

Payments and escrow

The same DLGF citizen's guide says property taxes are due in two installments, May 10 and November 10. If you have a mortgage with escrow, your lender typically pays these for you, and your monthly payment adjusts when the bill changes.

Do not budget from the seller's tax bill

The listing may show what the current owner paid. That number reflects their deductions and their situation, not yours. A seller with extra deductions, or a home that recently changed value, can make last year's bill a poor guide. Indiana property taxes in plain English explains how to estimate your own.

If your first assessment looks off compared to what similar homes are worth, assessed value versus market value explains the difference and when an appeal might make sense.

Vehicle excise tax

When you register your car, Indiana charges an annual vehicle excise tax. The BMV's excise tax information page says it is based on the vehicle's class, set by its original manufacturer's retail price, and its age, and some counties and cities add their own vehicle taxes.

Where local knowledge fits

You can look up a tax rate anywhere. What you cannot easily find online is how a specific home's tax bill is likely to change once it is yours, whether a nearby area has different local levies, or whether a listing's advertised taxes include deductions you will not get.

When I help relocating buyers compare homes, property taxes are part of the real monthly cost, right next to the payment, insurance, and commute. It is one more reason The Relocation Runway has you lock in financing early. You want these numbers in your budget before you tour, not after you fall for a house.

Questions worth asking your CPA

You will get more out of that first appointment if you walk in with specific questions. Here are the ones I would bring.

• How should my income be split between Indiana and the state I left for the move year?
• How does the January 1 county rule apply to my move date?
• Are any parts of my relocation package taxable, and should I adjust withholding now?
• If I sold a home in my old state, how does that sale get reported?
• If I work remotely for an out-of-state employer, what should my withholding look like?
• Do I need to make estimated payments this year?

A good tax professional would rather answer these in September than untangle them in April.

My advice for your first year

• Keep a folder with your move date, pay stubs, and closing documents.
• Hire a CPA for the move year, even if you usually file yourself.
• Confirm the homestead deduction was filed, and check your first tax bill.
• Look up current county rates on the state site, not in a forum.

If you are planning a move and want help estimating what a home here will really cost each month, I am glad to walk through it with you. Grab a time on my calendar. A real person reads every message. No pressure either way. Let's get you home.