Does Indiana have a special capital gains tax rate?

No. Indiana taxes capital gains as ordinary income at its flat 3.05% state income tax rate (2024). There is no reduced rate for long-term gains at the state level, and your county's local income tax applies on top.

How are long-term federal capital gains taxed?

Long-term gains use preferential federal rates of 0%, 15%, or 20% depending on your total taxable income. The gain stacks on top of your ordinary income, so part may fall in the 0% band while the rest is taxed at 15% or 20%.

What is the net investment income tax?

The NIIT is an extra 3.8% surtax on investment income, including capital gains, for taxpayers with modified adjusted gross income above $200,000 single or $250,000 married filing jointly. It applies only to income above that threshold.

Does my Indiana county tax capital gains too?

Yes. Every Indiana county levies a local income tax (LIT) that applies to the same income as the state tax, including capital gains. County rates typically run from about 0.5% to 3%, so enter your county's rate for an accurate estimate.

How can I lower my capital gains tax?

Holding assets longer than a year to qualify for long-term federal rates, harvesting losses to offset gains, and timing sales into lower-income years can all reduce the bill. This tool estimates the tax under current rules but is not personalized advice.

Indiana Capital Gains Tax Calculator

Email me this result

Get this tool's output sent to your inbox, plus one useful tool a week. No spam, unsubscribe any time.

Selling an investment while you live in Indiana triggers two taxes: the federal capital gains tax and Indiana’s state income tax (plus your county’s local income tax). Because Indiana gives no break for long-term gains, the state side is simply your flat rate. This calculator combines both so you can see the full cost of a sale.

How it works

The federal treatment depends on how long you held the asset. Long-term gains (held more than a year) use preferential rates that stack on your other taxable income:

0%  up to $47,025 single / $94,050 joint of total income
15% from there up to $518,900 / $583,750
20% above those thresholds

Short-term gains (held a year or less) are taxed at your ordinary federal rate. A 3.8 percent net investment income tax applies to gains above 200,000 dollars single or 250,000 dollars joint of modified AGI. Indiana then taxes the entire gain as ordinary income at its flat 3.05 percent state rate, and your county adds a local income tax (roughly 0.5 to 3 percent).

Example

A single filer with 80,000 dollars of other income and a 20,000 dollar long-term gain has already used the 0 percent band, so the federal gain is taxed at 15 percent (3,000 dollars). Indiana adds 3.05 percent (610 dollars), and a 1.6 percent county tax adds 320 dollars. Total tax on the gain is about 3,930 dollars, leaving roughly 16,070 dollars after tax.

Notes

This is a simplified model. Real returns involve loss carryovers, the exact NIIT calculation, qualified dividends, and Indiana add-backs and deductions, none of which are fully modeled here. Use it for planning and confirm with the current rules at irs.gov and in.gov/dor.