Before you start

An SSN or ITIN
Form W-4 for federal withholding and Indiana Form WH-4 for state and county withholding
Your county of residence as at 1 January, which sets the local rate
Records of foreign income and foreign financial accounts

Step-by-step

1
Complete Form W-4 and Indiana Form WH-4 on day one
The WH-4 tells your employer your county of residence and county of principal employment as at 1 January, which is what determines the local rate withheld. Getting the county wrong on this form is the single most common Indiana payroll error and it produces a surprise at filing.
Via employerWho: YouFirst week of employment
2
Check the current state and county rates
The state rate is 2.95% for 2026 and scheduled to fall to 2.90% for 2027. County rates are published annually by the Department of Revenue in Departmental Notice #1 and they change — Marion County is 2.02% for 2026. Look up the notice rather than trusting an article.
OnlineWho: You
3
Determine your US tax residency
The substantial presence test counts weighted days across three years to decide whether the US taxes your worldwide income or only US-source income. Your visa category does not decide this.
OnlineWho: You
4
Check for an applicable tax treaty
The US has treaties with around 70 countries that can reduce or exempt tax on particular income. Indiana starts from federal adjusted gross income, so a treaty exclusion that reduces federal AGI generally flows through — but confirm the state treatment rather than assuming it always does.
OnlineWho: You
5
If you buy, file the homestead deduction and understand SEA 1
Indiana's homestead deductions must be claimed; they do not arrive with the deed. Senate Enrolled Act 1 of 2025 phases out the fixed standard homestead deduction in favour of a larger supplemental deduction across six years from the 2026 bills, and adds a new credit worth 10% of the tax bill up to a $300 maximum starting with 2026 bills. The constitutional 1% cap on a homestead remains the ceiling above all of it.
OnlineWho: You
6
Budget the sales tax, and note there is no local addition
Indiana charges 7% sales tax statewide and — unusually — no county or city may add to it, so the rate is the same in Indianapolis as anywhere else in the state. Unprepared food is exempt; prepared food is not, and Marion County adds a food and beverage tax on restaurant meals.
OnlineWho: You
7
File your federal and Indiana returns
The tax year is the calendar year. The Indiana individual return reports state and county tax together, so there is one state filing rather than two. Indiana's deadline follows the federal one in most years — check the Department of Revenue's calendar.
OnlineWho: YouBy mid-April annually
8
File an FBAR if foreign accounts exceed $10,000
Aggregate foreign account balances over $10,000 at any point in the year trigger a FinCEN filing, separate from your tax return and with its own penalties.
OnlineWho: You

Documents you’ll need

Form W-2 from each employer, issued by 31 January
Form 1099s for freelance, interest and investment income
Forms W-4 and WH-4 filed with your employer
Passport and travel history for the substantial presence day count
Property tax statement and homestead deduction filing, if you own property
Foreign account statements for FBAR reporting

Things most newcomers don’t know

The county tax follows where you SLEEP, not where you work.

Ohio's municipal tax and Detroit's city tax are levied where you work as well as where you live. Indiana's is a residence tax fixed by your county on 1 January. That means moving from Marion County to Hamilton or Hendricks County changes your local rate and moving your desk does not — and it makes the WH-4 form, which most people fill in without reading, the document that sets part of your tax rate.

Source: Indiana Department of Revenue — Departmental Notice #1

The property tax cap is in the state constitution, which is a stronger promise than a statute.

Indiana amended its constitution in 2010 to cap property tax at 1% of gross assessed value for homesteads, 2% for other residential and farmland, and 3% for business. Texas has no state cap on the rate at all; Ohio's limits are statutory. A constitutional ceiling cannot be lifted by a legislative majority, which is a genuine long-run planning factor for a buyer.

Source: Indiana Department of Local Government Finance

SEA 1 of 2025 changes property tax bills over six years, not overnight.

The 2025 reform phases out the fixed standard homestead deduction in favour of a larger supplemental deduction across six years, adds a new 10% credit capped at $300 from the 2026 bills, and gives non-homestead residential property and farmland a new deduction on the same schedule. A bill from 2024 is therefore a poor guide to what 2028 will look like. Model the schedule, not last year's number.

Source: Indiana Department of Local Government Finance

Indiana forbids local sales tax additions, which is genuinely rare.

In Texas the state rate is 6.25% and locals add up to 2%; in California the local layer varies city by city. Indiana's 7% is the rate everywhere in the state with no municipal or county addition, so the sticker price maths is the same in Indianapolis, Fort Wayne and Evansville. Marion County's food and beverage tax on restaurant meals is the one exception you will actually notice.

Source: Indiana Department of Revenue

Common mistakes to avoid

Filling in the WH-4 with the wrong county and under-withholding all year.
Assuming the county rate follows your workplace, as Ohio's and Michigan's city taxes do.
Using a pre-2026 rate table when the state rate steps down each year.
Buying a home and never claiming the homestead deduction.
Modelling future property tax from an old bill rather than the SEA 1 phase-in schedule.
Missing the FBAR because a home-country account did not feel 'foreign'.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.

Make it your personal checklist

Globe Quest turns this into a tracked, AI-personalized plan for Indianapolis — timed to your move date, with reminders so nothing slips. Free to start.