Compare taxes and see how much you save moving from Illinois to Indiana
Both states have flat income taxes, but the comparison isn't straightforward. Illinois: 4.95% flat, NO local income tax. Indiana: 3.15% state + 0.5-2.9% county tax = 3.65-6.05% total. CRITICAL: 91 of Indiana's 92 counties levy income tax. Marion County (Indianapolis): 2.02% = 5.17% total. Lake County (near Chicago): 1.5% = 4.65% total. At $100,000: Illinois ~$4,950 vs Indiana (Marion) ~$5,170—Illinois is CHEAPER in Indianapolis! The math only favors Indiana in low-tax counties like Hamilton (0.84% = $3,990 total). Property taxes: Illinois 2.23% vs Indiana 0.84%—Indiana wins big here. Choose Illinois if: you're in Indianapolis metro, want simpler filing, or value Chicago job market. Choose Indiana if: you're in a low-county-tax area, own expensive property, or are retired.
Flat Tax
No local income tax
Flat Tax
Plus 0.5-2.9% county tax
At $100,000 (county dependent) income:
That is Varies by county back in your pocket!
| Income | IL Tax | IN Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 (Marion County) | ~$2,475 (4.95%) | ~$2,585 (3.15% + 2.02%) | Illinois saves $110 | $1,100 |
| $75,000 (Hamilton County) | ~$3,713 (4.95%) | ~$2,993 (3.15% + 0.84%) | Indiana saves $720 | $7,200 |
| $100,000 (Lake County) | ~$4,950 | ~$4,650 (3.15% + 1.5%) | Indiana saves $300 | $3,000 |
| $100,000 + $400K home | ~$4,950 + $8,920 property | ~$5,170 + $3,360 property | Indiana saves ~$5,340 total | $53,400 |
| $150,000 (Marion County) | ~$7,425 | ~$7,755 | Illinois saves $330 | $3,300 |
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Moving from Illinois to Indiana? Multi-state returns are tricky—partial-year residency, different deadlines, avoiding double taxation. Get matched with a CPA who specializes in state moves. Virtual meetings, fixed pricing.
Get Matched With a CPA →Not always! Indiana's 3.15% state rate is lower, but 91 of 92 counties levy additional income tax (0.5-2.9%). Marion County (Indianapolis) adds 2.02% = 5.17% total, MORE than Illinois's 4.95%. Indiana only wins clearly in low-tax counties like Hamilton (0.84%) or Hendricks (1.25%). Always add your specific county rate.
Lake County (Gary, Crown Point, Schererville) is closest to Chicago with a 1.5% county rate = 4.65% total, saving 0.3% over Illinois. Porter County is 1.72% = 4.87% total. LaPorte County is 1.44% = 4.59% total. Savings are modest—commute and property taxes matter more.
Indiana wins decisively. Illinois: 2.23% average (highest in Midwest). Indiana: 0.84% average with 1% homestead cap. On a $400,000 home: Illinois ~$8,920/year, Indiana ~$3,360/year = $5,560 annual savings. This often outweighs income tax differences.
Depends on your situation. If your Indiana county rate keeps total under 4.95%, and you own an expensive home (property tax savings), Indiana wins. But Chicago salaries are 15-30% higher for many fields. A $20,000 salary cut to save $2,000 in taxes is a bad trade. Retirement relocations make more sense than working-age moves.
Partial taxation in both. Illinois exempts Social Security and most retirement income (pensions, 401k, IRA) from state tax—major retiree benefit. Indiana taxes retirement income but excludes $3,000/person from pensions/401k (modest exemption). For retirees, Illinois is actually more favorable despite higher rates.