Indiana Tax Preparer Requirements 2025-2026

Indiana imposes no state license, no exam, no surety bond, and no mandatory continuing education on non-credentialed paid tax preparers. What Indiana does require is a federal PTIN listed on every state return filed (IC 6-8.1-17), with a $50-per-return penalty for omissions. In exchange, preparers enter a market defined by four distinctive features: a flat income tax rate descending from 3.00% for TY2025 toward a potential 2.55% floor by 2030; a 92-county income tax system where every county levies its own rate and the January 1 residence rule governs which rate applies; a static conformity framework that brings the OBBBA tips and overtime deductions to Indiana only for TY2026, not TY2025; and a client landscape spanning pharmaceutical equity compensation (Eli Lilly), auto manufacturing, agriculture, college towns, motorsports, Amish manufacturing communities, and one of the largest Burmese refugee populations in the country. This guide covers every requirement, rate, and compliance point an Indiana paid preparer needs for TY2025 returns filed in 2026.

Does Indiana Require a State Tax Preparer License?

Indiana does NOT require non-credentialed paid tax preparers to obtain a state license, pass an exam, register with any Indiana agency, post a surety bond, or complete state-mandated continuing education. The Indiana Professional Licensing Agency (in.gov/pla) has no authority over non-credentialed tax preparers or bookkeepers. Any individual who obtains a federal PTIN may legally prepare Indiana individual income tax returns for compensation.

Indiana is not among the handful of states (California, Connecticut, Maryland, Nevada, New York, Oregon) that maintain standalone preparer licensing laws. There is also no Indiana public registry of paid preparers; the IRS RPO Preparer Directory at irs.treasury.gov/rpo/rpo.jsf covers credentialed and AFSP preparers nationwide, and Indiana DOR points practitioners there rather than maintaining a parallel state system.

Indiana's PTIN-on-Return Requirement (IC 6-8.1-17)

This is the single most important Indiana-specific compliance rule for non-credentialed preparers. Indiana Code IC 6-8.1-17 requires every income tax return preparer to include their IRS-issued PTIN on any Indiana income tax return they prepare. The requirement applies to all taxable years beginning after December 31, 2018.

Penalty for omission: $50 per return, capped at $25,000 per preparer per year. This is a distinct Indiana-level penalty layered on top of any federal penalty for PTIN omission. For a high-volume preparer, omitting a PTIN from returns can accumulate to the $25,000 cap in a single season.

PTIN and EFIN: Federal Requirements

PTIN 2026 fee: $18.75 ($10.00 IRS base fee plus $8.75 third-party contractor fee). Renew annually by December 31 at irs.gov/ptin. Renewal takes approximately 15 minutes online. There is no separate Indiana PTIN fee.

EFIN (Electronic Filing Identification Number) is required to e-file Indiana returns. Applications are processed through IRS e-Services. Indiana does not issue a separate state EFIN; participation in the IRS Fed/State e-File program covers Indiana automatically upon IRS acceptance.

Indiana E-File Mandate: 10-Return Threshold

Indiana's e-file mandate is stricter than the federal threshold. A paid preparer who files more than 10 Indiana individual income tax returns in a calendar year must file electronically for all Indiana individual returns. The federal threshold is 11 returns; Indiana's effective threshold of 10 is slightly tighter.

Penalty for non-compliance: $50 per paper return filed when e-filing was required, capped at $25,000 per year. The mandate applies firm-wide (all preparers in a firm count together toward the threshold). It applies to individual income tax returns as of TY2025.

Taxpayer opt-out: A taxpayer may elect paper filing by completing Form IN-OPT (Indiana Electronic Filing Opt-Out Declaration). The preparer must retain the signed IN-OPT for three years.

FTC Safeguards Rule (WISP)

Every paid tax preparer, including solo practitioners, must maintain a Written Information Security Plan (WISP) under the Gramm-Leach-Bliley Act (15 U.S.C. 6801(b)). Required elements include a designated responsible individual, multi-factor authentication (MFA) for all systems containing customer data, a risk assessment, and an incident response plan. FTC penalties reach up to $46,517 per violation per day. Free WISP template: IRS Publication 5708.

Annual Filing Season Program (Voluntary)

The IRS Annual Filing Season Program (AFSP) is voluntary for Indiana preparers but provides a meaningful credential. Completing the required CE hours (18 hours including 6 hours of federal tax law updates and 2 hours of ethics) earns an IRS Record of Completion and limited representation rights before the IRS. America's Tax Professionals is IRS CE provider P619F and offers AFSP-qualifying courses.

Consumer Protection Enforcement

The Indiana Attorney General's Consumer Protection Division holds authority under the Deceptive Consumer Sales Act (IC 24-5-0.5) to investigate complaints against tax preparers, seek injunctions, and pursue civil penalties up to $5,000 per violation with consumer restitution. Tax fraud (falsifying returns) is referred to the Indiana DOR fraud prevention unit. Preparers operating deceptively face both AG civil enforcement and DOR criminal referral.

Indiana Individual Income Tax for TY2025

Flat Rate Schedule: 3.00% for TY2025, Declining Through 2030

Indiana taxes individual income at a single flat rate applied to Indiana adjusted gross income (AGI). The rate schedule enacted under SEA 1 (2023) and HEA 1001 (2023):

Beginning January 1, 2030, Indiana's rate may drop further in 0.05 percentage-point increments in even-numbered years, reaching as low as 2.55%, provided state revenue triggers are met. For client planning, the trajectory is consistently downward.

Important note on combined rates: The state flat rate is only part of what most Indiana taxpayers owe. All 92 counties also levy income tax. A Marion County (Indianapolis) resident filing TY2025 owes 3.00% state plus 2.02% county, for a combined rate approaching 5.02%. See the county income tax section below.

Starting Point: Federal AGI, then Indiana Add-Backs and Deductions

Indiana adjusted gross income begins with federal AGI (Form 1040, line 11), then applies Indiana-required add-backs (Schedule 1) and Indiana-specific deductions and exemptions (Schedule 2 and Schedule 3) to arrive at Indiana taxable income. Indiana does not use a standard deduction in the federal sense. Instead, it uses a personal exemption structure plus a set of named deductions.

Personal Exemptions

Indiana provides personal exemptions rather than a standard deduction. Key exemptions for TY2025:

• $1,000 per taxpayer (basic personal exemption)
• $1,000 for a spouse (if MFJ)
• $1,000 per qualifying dependent (base exemption)
• $1,500 per qualifying child (under 19, or full-time student under 24 as of December 31); first-time claim for a child increases to $3,000 and requires Schedule IN-DEP
• $1,000 additional for each taxpayer or spouse who is age 65 or older and/or blind
• $500 additional for each person age 65 or older if federal AGI is below $40,000 ($20,000 MFS)

Social Security: Fully Exempt

Indiana does not tax Social Security benefits or Railroad Retirement Board benefits. One hundred percent of these amounts included in federal AGI are deductible on Schedule 2. There is no income limit, no age requirement, and no application process. This is a full exemption, not a partial exclusion.

Military Income: Fully Exempt

Indiana provides three fully exempt military income categories on Schedule 2:

• Military retirement pay and survivor benefits: 100% exempt for taxable years beginning on or after January 1, 2022. No dollar cap.
• Active duty military pay: 100% exempt for TY2023 forward (prior to TY2023, the cap was $5,000).
• National Guard and Reserve Component pay: 100% exempt for TY2023 forward. Covers Indiana Army National Guard, Indiana Air National Guard, and all reserve components including Space Force (TY2025 forward), Navy Reserve, Marine Corps Reserve, Air Force Reserve, Coast Guard Reserve, USPHS Commissioned Corps, and NOAA Commissioned Officer Corps.

A preparer cannot claim both the National Guard/Reserve Component deduction and the general Military Service Deduction for the same income. Choose the applicable deduction code on Schedule 2.

Renter's Deduction: Up to $4,000 for TY2025

Indiana taxpayers who rent their principal Indiana residence (subject to Indiana property taxes) may deduct the lesser of rent paid or $4,000 on Schedule 2. This cap increased from $3,000 to $4,000 effective for taxable years beginning after December 31, 2024, making TY2025 the first year at the $4,000 cap. Married filing separately: $2,000. This increase is set to expire January 1, 2028 unless extended by the General Assembly.

The renter's deduction is high-value in Indiana's college towns and urban rental markets. An IU Bloomington graduate student renting an apartment and paying $15,000 in annual rent claims the full $4,000 deduction, saving $120 at the 3.00% state rate plus additional county tax savings at Monroe County's rate.

Homeowner's Property Tax Deduction: Up to $2,500

Indiana homeowners may deduct up to $2,500 ($1,250 MFS) of Indiana property taxes paid on their principal residence on Schedule 2. This is a state income tax deduction, separate from the county-level homestead exemption on the property tax bill itself.

College Choice 529: 20% Tax Credit (Not a Deduction)

Indiana provides a 20% nonrefundable state income tax credit on contributions to Indiana College Choice 529 plans under IC 6-3-3-12. This is a credit against tax owed, not a deduction from income.

• TY2025: 20% credit on up to $7,500 in contributions; maximum annual credit $1,500
• TY2026: Cap increases to $12,500 in contributions; maximum annual credit $2,500 (MFJ/single) or $1,250 (MFS)

Because the credit is nonrefundable, it can only offset Indiana income tax liability dollar-for-dollar. It does not generate a refund if the credit exceeds the tax owed.

Indiana Earned Income Credit: 10% of Federal EITC, Refundable

Indiana provides a state Earned Income Credit equal to 10% of the federal Earned Income Tax Credit, and it is fully refundable. Taxpayers must qualify for and claim the federal EITC to claim the Indiana credit. The credit is reported on Schedule IN-EIC. Because it is refundable, it can produce a refund even when Indiana income tax liability is zero, making it materially valuable for low-income clients in a way the nonrefundable SC credit cannot match.

Additional Indiana Schedule 2 Deductions

• Civil Service Annuity Deduction: Taxpayers age 62 or older (or surviving spouses) may deduct the lesser of their civil service annuity income or $16,000, reduced by any Social Security or Railroad Retirement income received.
• Private school and homeschool deduction: Up to $1,000 per qualifying child for tuition paid to private schools or homeschool expenses.
• Long-term care insurance premiums: Premiums paid for Indiana Partnership long-term care policies are fully deductible (Schedule 2, deduction code 608).
• Unemployment compensation: Indiana taxes unemployment compensation as ordinary income but allows a partial Schedule 2 deduction. Confirm the exact formula from the current IT-40 instruction booklet or IB-60 for TY2025.

Indiana County Income Taxes: The Defining Complexity

No neighboring state approaches Indiana's county income tax system. All 92 Indiana counties levy a county income tax on top of the state flat rate, with combined state-plus-county rates ranging from roughly 3.50% to nearly 6.00% depending on where a taxpayer lived on January 1. Understanding this system is the single most important Indiana-specific competency for any preparer serving Indiana clients.

The January 1 Residence Rule: How County Rate Is Determined

Indiana county income tax is assessed based on the county where the taxpayer resided on January 1 of the tax year. This is a snapshot date, not an average or proration.

• A taxpayer who lived in Porter County (0.50% rate) on January 1 but moved to Cass County (2.95% rate) in March still owes the Porter County rate for the entire tax year. The new rate does not take effect until January 1 of the following year.
• Where a taxpayer works does not determine the county rate for a resident. An Indiana resident who works in a different county pays only their county-of-residence rate on Schedule CT-40.
• The county of employment on January 1 is also locked for withholding purposes via Form WH-4. Mid-year moves require updating the WH-4 so that withholding shifts on January 1 of the next year.

W-2 and return reconciliation: Indiana county tax withheld appears in W-2 Box 19 (local tax withheld) and Box 20 (locality name/code). Preparers must reconcile Box 19 withholding against the county tax calculated on Schedule CT-40 (full-year residents) or CT-40PNR (part-year residents and nonresidents). If withholding is insufficient because of a mid-year move or employer error, the difference is owed with the IT-40.

Nonresidents Working in Indiana: Same Rate, No Reduction

If a taxpayer does not reside in any Indiana county but has their principal place of employment in an Indiana county, they owe county income tax to the county where they work. There is no separate lower nonresident county rate; the county's single rate applies to both residents and nonresidents. An Illinois resident commuting to Hammond (Lake County) for work owes Lake County income tax on Indiana earnings.

30-day safe harbor (effective TY2024 forward): A nonresident employee who works 30 or fewer days in Indiana during the calendar year is exempt from Indiana state and county income tax for that year, provided the employee submits a completed Form WH-4AFF to their employer. If the employee exceeds 30 days, Indiana tax applies retroactively from day one.

Reciprocal Agreements Do NOT Eliminate County Tax

Indiana has reciprocal income tax agreements covering wages with Kentucky, Michigan, Ohio, Pennsylvania, and Wisconsin. However, these agreements specifically exclude county income taxes. A Michigan resident working in Allen County, Indiana, may be relieved from Indiana state income tax under the reciprocal agreement, but still owes Allen County income tax on Indiana earnings. This is a frequent and consequential preparer error.

Illinois is not in Indiana's reciprocal agreement network. Lake County (Gary-Hammond) residents who commute to Illinois, and Illinois residents commuting to Lake County, must file full non-resident returns in both states and claim a credit for taxes paid to the other state. This makes Lake County commuter returns among the most complex in Indiana.

Three County Tax Types: CAGIT, COIT, and CEDIT

Indiana counties levy income tax through one of three legal structures. The distinction matters for revenue allocation between schools and local government, but for the taxpayer and preparer, only the total combined county rate matters on the return:

• CAGIT (County Adjusted Gross Income Tax): Revenue split between school corporations and civil governments; schools use it to reduce property taxes.
• COIT (County Option Income Tax): Revenue goes to civil (non-school) governments only; no property tax offset requirement.
• CEDIT (County Economic Development Income Tax): Revenue restricted to capital projects or economic development. Most counties layer CEDIT on top of CAGIT or COIT.

The authoritative rate for each county is published annually in Indiana DOR Departmental Notice No. 1 (DN-1), available at in.gov/dor/files/dn01.pdf. County rates change periodically; always verify from the current DN-1 before advising clients on expected combined rates. The DN-1 rate for a given year is the withholding rate; TY2025 income tax returns use the DN-1 rates in effect during calendar year 2025.

Key Metro-Area County Rates (2026 DN-1 Withholding Rates)

The table below shows 2026 withholding-year rates from the Indiana DOR DN-1 for major metro areas, combined with the 2.95% TY2026 state rate for reference. For TY2025 returns filed in spring 2026, use the DN-1 rates in effect during 2025; six counties raised rates effective January 1, 2026 (confirmed: Carroll, Grant, Greene, Howard, plus two others), so their 2025 return rates differ from the figures below. Always verify the applicable-year DN-1 before publishing client-specific combined rates.

For all 92 counties, always consult the current Indiana DOR Departmental Notice No. 1 at in.gov/dor/resources/tax-rates-and-reports/rates-fees-and-penalties/ as the authoritative source. Rates change annually.

Indiana OBBBA Conformity: Critical TY2025 vs. TY2026 Distinction

Indiana is a static (fixed-date) conformity state. It does not automatically adopt federal tax law changes as they occur. Instead, Indiana conforms to the Internal Revenue Code as of a specific reference date set by the General Assembly.

Senate Bill 243, signed March 5, 2026, updated Indiana's IRC reference date from January 1, 2023 to January 1, 2026. This brings Indiana into general conformity with the OBBBA for taxable years beginning after December 31, 2025 (TY2026 forward). The conformity date shift is the source of the most consequential planning point in Indiana for the 2026 filing season.

Tips and Overtime Deductions: TY2026 Only, NOT TY2025

The OBBBA added two new above-the-line federal deductions effective for TY2025: the tips deduction (IRC 224) and the overtime pay deduction (IRC 225). Both apply federally for tax years beginning after December 31, 2024. Indiana's SB 243 conforms to these provisions only for taxable years beginning after December 31, 2025.

The practical result for TY2025 returns filed in spring 2026: A tipped restaurant worker or an hourly employee who received overtime pay in 2025 and claimed the federal deduction on their 1040 cannot claim that same deduction on their Indiana IT-40 for TY2025. The preparer must add back the federal tips or overtime deduction when computing Indiana AGI for TY2025. Failure to do so understates Indiana income and creates an audit exposure.

Indiana's conformity for these provisions is also time-limited. The one-year conformity window (TY2026 only under current law) means the 2027 General Assembly must act to extend tips and overtime deductions beyond TY2026. Monitor Indiana legislative sessions for continuity or expiration.

The federal tips deduction phases out for modified AGI above $150,000 (single) or $300,000 (MFJ); Indiana's TY2026 conformity tracks the same parameters.

Bonus Depreciation: Indiana Remains Decoupled (Add-Back Required)

Indiana has continuously decoupled from federal bonus depreciation under IRC 168(k) and SB 243 maintained that decoupling. Taxpayers who claim federal 100% bonus depreciation must add back the full federal bonus depreciation amount on Schedule 1 (Code 110) and depreciate those assets separately under MACRS without bonus for Indiana purposes.

SB 243 also explicitly decoupled Indiana from the new OBBBA IRC 168(n) bonus depreciation for qualified production property. Taxpayers claiming the federal 168(n) deduction must add it back on Schedule 1 (Code 120). This primarily affects manufacturers investing in new capital equipment.

Indiana Section 179 Cap: $100,000 for TY2025

Indiana increased its Section 179 expensing cap from $25,000 to $100,000, effective for taxable years beginning on or after January 1, 2025. The federal Section 179 limit substantially exceeds $100,000 for TY2025; amounts above Indiana's $100,000 cap require an Indiana add-back on Schedule 1. Manufacturing and agriculture clients with equipment purchases will frequently encounter this add-back.

Business Interest and R&E: Indiana Allows Current-Year Deductions

Indiana decouples from two significant federal limitations in ways that benefit business clients:

• Business interest expense (IRC 163(j)): Indiana allows the full current-year deduction of business interest expense, regardless of the federal limitation. Taxpayers who had business interest disallowed federally under 163(j) may deduct those amounts on the Indiana Schedule 2.
• R&E expenses (IRC 174): Indiana requires current-year expensing of both domestic and foreign research and experimental costs, contrary to the federal multi-year amortization. Taxpayers who amortized R&E federally must deduct those amounts in the current year for Indiana purposes (Schedule 2 subtraction).

Both decouplings were codified by SB 243 and benefit clients in manufacturing, technology, and pharma, all prominent Indiana industries.

Part-Year Residents and Nonresidents

Part-year Indiana residents (those who moved into or out of Indiana during the tax year) and nonresidents with Indiana-source income file on Form IT-40PNR with Schedule CT-40PNR for county tax. Full-year Indiana residents use Form IT-40 with Schedule CT-40.

What Counts as Indiana-Source Income

• Wages earned while a physical Indiana resident, or for services performed in Indiana
• Business income from activities conducted in Indiana
• Rental income from Indiana property
• Indiana pension income
• Prize and gambling income from Indiana sources (including motorsports prize money and casino winnings at Indiana riverboats)

College Students: County Tax and Residency

Nonresident students attending Indiana universities are not Indiana county residents for county income tax purposes unless they were present in an Indiana county on January 1. A student from Ohio who moves to Bloomington in August to attend IU does not owe Monroe County income tax for that tax year. If that student is still residing in Bloomington on January 1 of the following year, Monroe County tax applies starting the following tax year.

Graduate student stipends and fellowship income are generally includable in Indiana AGI. The federal exclusion for qualified scholarships (tuition and required fees) carries through to Indiana; amounts used for room and board, living expenses, or other non-qualifying purposes are taxable at both federal and Indiana levels.

Servicemembers Civil Relief Act (SCRA) and MSRRA

Military members stationed in Indiana who maintain legal domicile in another state are not Indiana residents for income tax purposes under the Servicemembers Civil Relief Act. Their military pay is taxed only in their domicile state, not Indiana. Under the Military Spouses Residency Relief Act (MSRRA), a military spouse who moves to Indiana solely to be with a servicemember may retain their prior-state domicile and exclude Indiana-source wages from Indiana tax, provided they meet the joint-domicile requirements. These rules create frequent IT-40PNR scenarios at Indiana's military installations.

Starting a Tax Preparation Business in Indiana

Sales Tax: Indiana Does Not Tax Preparation Services

Indiana's state sales tax rate is 7%. Indiana has no local or county sales taxes; the 7% rate is uniform statewide. Tax preparation services are not subject to Indiana sales tax. Services are generally exempt in Indiana unless specifically enumerated by statute, and tax preparation is not on Indiana's short list of taxable services (which is limited to telecommunications, cable/satellite, utilities, and short-term lodging under 30 days).

Exception: If a preparer bundles the sale of tangible goods (physical software packages, printed forms) with service fees in a single transaction, the bundled transaction may become taxable. Software delivered electronically is generally not taxable in Indiana. Contact Indiana DOR if you are unsure about a specific bundled offering.

LLC Formation

Indiana LLCs are formed through the Secretary of State's INBiz portal (inbiz.in.gov).

• Online formation fee: $95 ($75 statutory base plus $20 Enhanced Access surcharge)
• Paper filing: $100
• Publication requirement: None
• Franchise tax: None

Business Entity Report: Biennial, Not Annual

Indiana does not require annual reports from LLCs. A Business Entity Report is due every two years in the anniversary month of the entity's formation. Online filing: $32. Paper filing: $50. No report is required in the formation year. This biennial structure, combined with zero franchise tax, makes Indiana one of the lowest-maintenance states for LLC compliance.

Indiana BT-1 Registration

A tax preparer operating as a business must register with Indiana DOR via Form BT-1 (Indiana Business Tax Application, filed through INBiz) only if the business: (a) withholds Indiana income tax from W-2 employees, or (b) collects Indiana sales tax (not applicable for a pure service preparer). A Registered Retail Merchant Certificate (RRMC) costs $25 per location if applicable. A sole-practitioner preparer with no employees and no taxable goods sales does not need a BT-1.

Indiana Client Niches: High-Value Market Opportunities

Manufacturing: The Most Manufacturing-Intensive State in the U.S.

Indiana leads the nation in manufacturing as a share of state GDP (roughly 29%). Major employers generating complex individual and business tax situations include Eli Lilly and Company (Indianapolis, Marion County) in pharmaceuticals, Cummins Inc. (Columbus, Bartholomew County) in diesel engines, and a dense auto manufacturing corridor with Toyota (Gibson County), Subaru (Tippecanoe County), and Honda (Tipton County area).

Pharma and tech clients at Eli Lilly typically have equity compensation requiring Schedule D, Form 8949, Form 3922 (ESPP), and Form 3921 (ISO) competence. Manufacturing workers in overtime-heavy environments generate the TY2025-vs-TY2026 tips and overtime deduction question for every seasonal filing. The Indiana Section 179 cap ($100,000) and the 168(k) add-back requirement are daily issues for small manufacturers and contractors.

Agriculture: Top-10 Nationally for Corn, Soybeans, and Hogs

Indiana consistently ranks among the top five states nationally for corn and soybean production, and generates approximately 92,000 farm operations. Schedule F clients are a stable Indiana niche. Key Indiana-specific agricultural tax issues:

• Indiana's agricultural sales tax exemption ("double direct" test) for seeds, fertilizer, feed, and equipment requires the taxpayer to be "occupationally engaged" in farming and the item to be used directly in the production process.
• Cash-rent landlord income (Schedule E, passive) versus active farmer income (Schedule F, Schedule SE): the distinction determines self-employment tax exposure and eligibility for farm loss carryovers.
• Section 179 expensing on farm equipment, subject to the $100,000 Indiana cap for TY2025, versus the substantially higher federal limit.

Military Communities: Camp Atterbury, Crane NSWC, Grissom ARB

Indiana has eight military installations across four branches. Key sites for client development:

• Camp Atterbury (Edinburgh, Johnson County, 1.40%): Indiana National Guard training center; generates Guard and active-duty W-2 clients with fully exempt pay.
• Naval Surface Warfare Center Crane Division (Martin/Greene/Lawrence counties): Third-largest naval installation in the world by land area; major civilian contractor workforce plus active-duty Navy.
• Grissom Air Reserve Base (Miami County, 2.54%): Air Reserve unit generating reserve-pay exemption returns.
• Fort Wayne Air National Guard Base (Allen County, 1.59%): ANG unit; Guard pay fully exempt.

Indiana's combination of full military retirement exemption, full active duty/Guard pay exemption, and complete Social Security exemption creates a powerful value proposition for retiring servicemembers and their families. A military retiree with $55,000 in military pension and $28,000 in Social Security pays zero Indiana income tax on either amount.

College Towns: IU, Purdue, Notre Dame

Indiana's three major university cities produce concentrated, recurring tax needs:

• Bloomington (Monroe County, 2.14%): Indiana University with approximately 45,000 students and 10,000 staff. Nonresident IT-40PNR returns, graduate student stipend and fellowship income, international student ITIN returns, and adjunct faculty multi-state returns.
• West Lafayette (Tippecanoe County, 1.28%): Purdue University with approximately 47,000 students. Strong engineering and agriculture student population; graduate research stipends; corporate recruiters paying signing bonuses and relocation.
• South Bend (St. Joseph County, 1.75%): University of Notre Dame. University employees with housing allowances and clergy-adjacent income; large international faculty population with W-8BEN and treaty considerations.

County rates in college towns also make the renter's deduction particularly valuable. A Purdue graduate student renting in Tippecanoe County and paying the full $4,000 renter's deduction saves $120 in state tax plus approximately $51 in county tax at Tippecanoe's rate.

Motorsports: Indianapolis Motor Speedway and the MID

Indiana designated the Indianapolis Motor Speedway and surrounding area as a Motorsports Investment District (MID). The Indiana DOR has a dedicated motorsports tax guidance page and publishes IB-88B specifically for race team members. Key planning points:

• Race team members (drivers, pit crew, mechanics, spotters): all Indiana-source income is taxable regardless of home state; non-Indiana residents file IT-40PNR with Marion County county tax on Indiana earnings.
• Multi-state allocation of prize money and sponsorship income across events held in multiple states.
• Race team sales of racecars and parts are exempt from Indiana sales tax; tires and accessories are not exempt.
• Venture Capital Investment Credit: 20% of Indiana motorsports investments against Indiana income tax.

Amish Manufacturing Communities: LaGrange, Elkhart, Kosciusko Counties

The Elkhart-LaGrange Amish settlement is one of the largest in North America. Contrary to the farming stereotype, most Amish adults in this area work in recreational vehicle (RV) manufacturing. The critical tax distinction:

• IRC 1402(g) SE tax exemption (Form 4029): This is a one-time, permanent election by self-employed individuals to be exempt from Social Security and Medicare contributions and benefits. It is available only to self-employed individuals who are members of a recognized religious sect with objections to insurance. Amish W-2 factory employees do NOT qualify; they owe full FICA on their wages regardless of religious affiliation.
• Income tax (federal and Indiana) still fully applies to all Amish workers, including those with a valid 4029 election. The 4029 exemption covers only SE tax, not income tax.
• LaGrange County 2026 DN-1 rate: 1.65%. Elkhart County: 2.00%. Kosciusko County: 1.00%.

Fort Wayne Burmese Community

Fort Wayne and Indianapolis are major resettlement cities for Burmese refugees, including the Karen ethnic subgroup. Fort Wayne's Burmese community is one of the largest in the United States. The tax profile for these clients typically involves W-2 income from manufacturing and food-processing employers (Allen County, 1.59% rate), ITIN or ATIN returns for family members without Social Security numbers, EITC eligibility review, and language access. Bilingual preparation services (Burmese/Karen or engaging community interpreters) create a strong referral base in this community.

Lake County: Steel, Gaming, and Illinois Commuter Complexity

Lake County (Gary, Hammond, East Chicago) sits in the Chicago metro orbit and generates some of Indiana's most complex returns. Key factors:

• Steel industry: U.S. Steel Gary Works and feeder manufacturers generate hourly union W-2 workers with overtime pay, shift differentials, and pension income.
• Gaming: Hard Rock Casino Gary, Horseshoe Hammond, and other Indiana riverboat casinos; W-2G withholding, Form 5754 multi-payee winnings, and professional gambler Schedule C issues.
• Illinois commuters: Indiana has no reciprocal agreement with Illinois. Indiana residents commuting to Illinois jobs and Illinois residents commuting to Lake County jobs must file full non-resident returns in both states. The county income tax adds a layer that even the reciprocal agreement would not have relieved.

Indiana Tax Forms Reference for Preparers

Professional Associations and Resources

Indiana NATP Chapter

The National Association of Tax Professionals (NATP) has an active Indiana chapter (indiananatp.com). NATP is the primary professional home for non-credentialed tax preparers nationally, providing CE, a research help desk, and tax publications. Indiana chapter events bring preparers current on state-specific changes including county tax mechanics and conformity updates.

Indiana Society of Enrolled Agents (INSEA)

INSEA (indianaenrolledagents.com) represents Enrolled Agents in Indiana. For preparers pursuing the EA credential, the EA exam is the logical next professional step; INSEA provides networking and CE resources. America's Tax Professionals offers IRS-approved CE qualifying toward the EA and AFSP credentials.

Indiana CPA Society (INCPAS)

INCPAS (incpas.org) is the primary professional organization for Indiana CPAs. While membership requires CPA licensure, INCPAS's legislative advocacy work on Indiana conformity issues (including SB 243 and annual conformity bills) directly affects all preparers. Monitoring INCPAS's tax policy communications is a practical way to stay current on Indiana legislative developments.

Indiana Department of Revenue Resources

The Indiana DOR Tax Practitioners FAQ (in.gov/dor/i-am-a/tax-professional/tax-prac-faq/) is the authoritative starting point for preparer-specific questions. Key DOR resources for Indiana preparers:

• Departmental Notice No. 1 (DN-1): annual county income tax rates (in.gov/dor/files/dn01.pdf)
• IB-27: Military AGI deductions
• IB-32: Local income taxes and county tax mechanics
• IB-60: Unemployment compensation deduction
• IB-88B: Motorsports income tax guidance
• IB-98: College Choice 529 credit
• Indiana DOR Military page: in.gov/dor/i-am-a/individual/military/

Frequently Asked Questions