Self-employment tax in Indiana
Indiana taxes self-employed income at 2.95% for 2026, with a $1,000 personal exemption and no standard deduction - and every Indiana county adds its own local income tax on top, paid on the state return.
What a Indiana freelancer owes
- Federal self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare).
- Federal income tax on your net profit (after the deductible half of SE tax).
- Indiana income tax at 2.95% for 2026, plus a county income tax - for example, Marion (Indianapolis) 2.02%, Hamilton 1.10%, Porter 0.50%, and Pulaski 2.85% - on top of the state rate.
Estimate your Indiana taxes
Free 1099 self-employment tax calculator — add Indiana's 2.95% + county tax state rate. No sign-up.
Enter Indiana's 2.95% + county tax in the State Tax field for a full estimate.
States with no income tax are set to 0%. Estimate only — adjust for local taxes.
Estimates use 2026 US federal figures (IRS Rev. Proc. 2025-32): self-employment tax of 15.3% (12.4% Social Security up to the $184,500 wage base + 2.9% Medicare) plus federal income tax on your net profit after the standard deduction. State and local taxes are only included if you set a state rate above. Simplified estimate for planning only — not tax advice.
Guide: Self-employment tax in Indiana — 2.95% plus county tax
Indiana taxes freelancers twice at the state level: once for the state, once for the county. The state rate is a flat 2.95% for 2026 (2025: 3.00%; the Department of Revenue states the rate will adjust to 2.90% in 2027), with no brackets. There is no standard deduction. The personal exemption is $1,000 for each exemption claimed on the federal return, plus $1,500 for certain dependent children and additional $1,000 age-65-or-blind exemptions in specified cases. Partnerships and S corporations should also note the elective pass-through entity tax (PTET).
The federal layer is the same in every state. Self-employment tax is 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of your net profit, and it applies once your net earnings reach $400. The Social Security wage base is $184,500 for 2026; Medicare is uncapped. The deduction for half of your SE tax lowers your income tax only — it does not lower your net earnings or your SE tax.
The county layer is the part Indiana freelancers most often miss: every Indiana county levies its own Local Income Tax (LIT), paid on the state return (Schedule CT-40) on top of the state rate. Your county of residence (and principal business or employment) is fixed on January 1 for the whole year, and residents pay their county rate on their entire AGI. Example county rates (Departmental Notice #1, effective October 1, 2026): Porter 0.50%, Hamilton 1.10%, Marion (Indianapolis) 2.02%, and Pulaski 2.85% (2025 cross-checks: Adams 1.6%, Allen 1.59%, Bartholomew 1.75%, Cass 2.95%). Combined, the typical rate is 2.95% state (2026) plus about 0.5% to 2.95% county.
Worked example. Take a single freelancer with $60,000 of net profit living in Marion County (Indianapolis). After the $1,000 personal exemption, taxable income is $59,000. State tax is $59,000 x 2.95% = $1,740.50, county tax is $59,000 x 2.02% = $1,191.80, and the combined state-plus-county bill is $2,932.30 — a combined rate of 4.97%. Federal SE tax on the same profit is $60,000 x 92.35% = $55,410, x 15.3% = $8,477.73.
Indiana estimates are required if you owe $1,000 or more in state-plus-county tax not covered by withholding, with installments due April 15, June 15, and September 15, and January 15, on Form ES-40 / IT-40ES. Keep every receipt and invoice in MoneyFeed via WhatsApp, so your net profit — and your January 1 county — is ready when each estimate comes due.
FAQ
A flat 2.95% for 2026 (2025: 3.00%; the Department of Revenue states the rate will adjust to 2.90% in 2027), on top of federal self-employment and income tax — plus county tax.
Every Indiana county levies its own Local Income Tax, paid on the state return (Schedule CT-40) on top of the state rate. Your county of residence (and principal business or employment) is fixed on January 1 for the whole year, and residents pay their county rate on their entire AGI. Combined, the typical rate is 2.95% state (2026) plus about 0.5% to 2.95% county.
Per Departmental Notice #1, effective October 1, 2026: Porter 0.50%, Hamilton 1.10%, Marion (Indianapolis) 2.02%, and Pulaski 2.85%. 2025 cross-checks: Adams 1.6%, Allen 1.59%, Bartholomew 1.75%, and Cass 2.95%.
No. Indiana has no standard deduction. The personal exemption is $1,000 for each exemption claimed on the federal return, plus $1,500 for certain dependent children and additional $1,000 age-65-or-blind exemptions in specified cases.
Estimates are required if you owe $1,000 or more in state-plus-county tax not covered by withholding. Installments are due April 15, June 15, and September 15, and January 15, on Form ES-40 / IT-40ES.
Indiana freelancer tax — FAQ
Do freelancers pay state income tax in Indiana?
Yes. Indiana taxes self-employment income at a flat 2.95% for 2026 (2025: 3.00%; DOR states the rate will adjust to 2.90% in 2027), on top of federal taxes, plus county tax.
How does Indiana county tax work?
Every Indiana county levies its own Local Income Tax, paid on the state return (Schedule CT-40) on top of the state rate. Your county of residence (and principal business or employment) is fixed on January 1 for the whole year, and residents pay their county rate on their entire AGI. Combined, the typical rate is 2.95% state (2026) plus about 0.5% to 2.95% county.
How do I estimate my Indiana 1099 taxes?
Use the free MoneyFeed 1099 calculator for the federal estimate, then add Indiana tax at 2.95% plus your county rate - for example, in Marion County (Indianapolis) that is 2.95% + 2.02% = 4.97% combined.
Figures are 2026 headline guidance for freelancers and the self-employed, not tax advice. Check current IRS and state rules or a CPA for your situation.