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Indiana Retirement Tax Calculator for Pensions and IRAs (2026)

Indiana does not tax Social Security, railroad retirement or military retirement pay. Other pensions and IRA withdrawals are taxed at the 2026 state rate of 2.95%, plus county income tax, and federal civil-service retirees 62 and older deduct up to $16,000 less the benefits they received.

Checked against sources 4 official sources linked How we verify

Indiana resident retirement worksheet

Use the year income is received, not the filing year. Later years use a separately approved assessment until the next return rules are verified.

Approved taxable federal benefit amounts and separate income categories, positive ordinary federal AGI, prepared Indiana exemptions and other modifications. Full return credits, loss adjustments and nonresident allocation need separate preparation.

Includes taxable pensions, IRA withdrawals and federally included benefits. Federal standard or itemized deductions are not deducted again here.

Subtract only the amount actually included federally, not the gross benefits. Keep it separate from military and civil-service income.

2022-and-later deduction covers the qualifying included amount without the old age-60 condition. Active-duty pay is a separate category.

Combine your own and qualifying survivor annuities for one owner cap; omit private pensions and military retirement.

The civil-service offset uses all received benefit dollars, including the federally nontaxable portion. Do not use only the household included amount.

This spouse has a separate cap and their own benefit offset.

Do not apply your spouse’s receipts to your own civil-service deduction.

Enter the approved total, with a known zero if none applies.

Omit benefits and civil-service deductions computed above. Prepare eligibility and any 2026-only deduction separately.

Illustrative amount only. Supply the approved total for your actual filing facts; this tool does not determine exemptions.

Use the applicable annual CT-40 calculation and January 1 residence / employment facts. County withholding charts are not a complete annual return. Blank remains unknown; an approved zero is accepted.

Indiana · 2026 estimate

Waiting on a figure

Indiana state ordinary tax before credits —
Indiana taxable income
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Retirement benefit deductions
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Your civil-service deduction
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Spouse’s civil-service deduction
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Prepared annual county income tax
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State estimate + prepared county tax
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Calculation scopeConfirm prepared benefit eligibility and full-year resident scope

Illustrative defaults. Enter approved taxable amounts and confirm eligibility. The result covers the displayed worksheet conditions; a complete return may require other income, adjustments, deductions or credits.

Current-year rates and primary-source eligibility reviewed October 1, 2026. Use the federal tool separately; these inputs do not prepare a complete federal or state return.

Reviewed October 6, 2026. Separate Indiana pension deductions from county income tax

What Indiana taxes in retirement

Partly taxed: limits by age, plan, owner or income apply. Military retirement is covered in the guide. How these labels work.

Indiana retirement tax figures and sources

Indiana figures that decide 2026 retirement-income tax
RuleIndiana figureEffectivePrimary source
State income-tax rate2.95% for 2026; scheduled to drop to 2.90% in 20272026 tax yearIndiana DOR rates, fees and penalties
County income taxAdded on top of the state rate; rates vary by county and may be adjusted in January and OctoberPer county, per yearIndiana DOR rates, fees and penalties
Social Security and railroad retirementNot taxed: amounts in federal AGI are deductedContinuingIndiana DOR individual deductions
Military retirement and survivor benefits100% deductible, with no minimum ageTax year 2022 and laterIndiana DOR Information Bulletin #6
Federal civil-service annuityUp to $16,000, minus Social Security and railroad tier 1 and 2 received; age 62+, or any age for a surviving spouseBulletin effective January 1, 2025Indiana DOR Information Bulletin #6
Exemptions for retirees$1,000 for each exemption claimed federally (you and a spouse), plus $1,000 for each spouse 65 or older, plus $500 more each when federal AGI is under $40,000Current DOR guidanceIndiana DOR guidance for seniors

Separate Indiana pension deductions from county income tax

Estimate Indiana retirement tax at the 2026 state rate of 2.95%, with Social Security, military and civil-service deductions and a separate prepared county tax.

Indiana’s 2026 individual income-tax rate is 2.95%. The state starts with federal adjusted gross income, then applies approved addbacks, deductions and exemptions. That starting point differs from federal taxable income: a federal standard deduction is not an extra Indiana deduction. The worksheet keeps the state estimate before credits separate from a prepared annual county liability.

Social Security and railroad retirement benefit amounts included in federal AGI are deducted for Indiana. Qualified military retirement and survivor income is fully deductible for 2022 and later; the former age-60 requirement does not govern this 2026 calculation. A private pension or ordinary IRA distribution does not receive that military treatment. Enter only approved qualifying amounts and avoid deducting the same income in another field.

For federal civil-service annuities, qualify each recipient separately: age 62 or older at year end, or an eligible surviving spouse without that minimum age. The deduction is the positive balance of the lesser of their included annuity or $16,000 after their gross Social Security and railroad tier 1 and tier 2 receipts. The current Bulletin #6 expressly includes both railroad tiers. Combine an owner’s own and survivor annuities before applying their single cap; another spouse’s unused room is not transferred.

Consider the illustrative joint example: federal AGI is $80,000, included Social Security or railroad benefits are $15,000, and qualifying included military retirement is $10,000. One age-65 owner has a $25,000 civil-service annuity and $5,000 gross benefit receipts. Their civil-service deduction is $11,000. The other owner has no civil-service annuity. With approved exemptions of $4,000 and no other modifications, taxable income is $40,000 and state ordinary tax is $1,180 before credits. A blank county amount leaves the combined figure unknown. A prepared $400 county liability makes the displayed state estimate plus county tax $1,580.

Use the actual year’s county schedule and January 1 residence or employment facts. Indiana’s current rate page distinguishes the January/October withholding chart from annual individual-return rates. This calculator does not select a county or infer a zero county bill. Other deductions, disability treatment, personal and age exemptions, credits, losses and residency changes require their own preparation. Confirm the resident scope and approved categories before replacing the illustrative inputs with a calculated result.

Prepare these Indiana records

Official Indiana source. June 2025 Bulletin #6, effective January 2025 and continuing; current 2026 rate page; county and exemptions need the applicable annual return.

Calculate the federal portion separately

Use the federal retirement-tax worksheet to prepare federally included benefits and ordinary income. Its federal deduction and rates do not replace the Indiana rules above.

Compare Indiana with nearby states

Illinois, Michigan, Ohio and Kentucky border Indiana. Run each one’s worksheet with the same household figures before deciding where a move would leave you.

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Updated / verified · Retirement Income Tax Calculator Editorial Team