Indiana vs Kentucky Taxes: Take-Home Pay Compared (2026)
On a $75,000 salary, a single filer keeps $324 more a year in Indiana than in Kentucky ($27 a month).
Indiana
2.95% flat state income tax
$59,409
take-home on $75,000 · $4,951/month
14th of 51 states for take-home pay
Indiana paycheck calculator ›Kentucky
3.5% flat state income tax
$59,085
take-home on $75,000 · $4,924/month
23rd of 51 states for take-home pay
Kentucky paycheck calculator ›Take-home pay in Indiana and Kentucky by salary
| Salary | Indiana | Kentucky | Difference |
|---|---|---|---|
| $40,000 | $33,169 | $33,038 | $131 more in Indiana |
| $50,000 | $40,909 | $40,723 | $186 more in Indiana |
| $60,000 | $48,649 | $48,408 | $241 more in Indiana |
| $75,000 | $59,409 | $59,085 | $324 more in Indiana |
| $100,000 | $76,259 | $75,798 | $461 more in Indiana |
| $125,000 | $93,045 | $92,446 | $599 more in Indiana |
| $150,000 | $109,395 | $108,659 | $736 more in Indiana |
| $200,000 | $143,056 | $142,045 | $1,011 more in Indiana |
Single filer, standard deduction, no local tax. To match $75,000 in Indiana you would need about $75,500 in Kentucky; to match $75,000 in Kentucky you would need about $74,500 in Indiana.
How Indiana and Kentucky tax wages
| 2026 | Indiana | Kentucky |
|---|---|---|
| Income tax | a flat 2.95% income tax | a flat 3.5% income tax |
| Top rate | 2.95% | 3.5% |
| Standard deduction | None (exemptions or credits only) | $3,360 single |
| State tax on $75k | $2,183 (2.9%) | $2,507 (3.3%) |
| Local wage taxes | Yes (11 modeled) | Yes (15 modeled) |
| Reciprocity | Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin | Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, Wisconsin |
| 2026 change | Indiana cut its flat rate from 3.0% to 2.95% on January 1, 2026, with 2.9% scheduled for 2027. | Kentucky cut its flat rate from 4.0% to 3.5% on January 1, 2026 after meeting its revenue triggers. |
Moving between Indiana and Kentucky
Moving from Indiana to Kentucky
Moving to Kentucky from Illinois or Virginia lowers your state tax at most salaries, and the 2026 cut to 3.5% makes the state rate more competitive with Indiana. Budget for local tax as well: Kentucky's occupational license taxes run from 1.65% in Henderson to 2.75% in Lexington among our city pages. Whether you live inside Louisville Metro changes your rate, so compare addresses before you sign.
Moving from Kentucky to Indiana
Moving to Indiana from Illinois or Michigan generally lowers your state income tax, since the 2.95% flat rate applies after only a $1,000 exemption. Budget for the county tax too: among the larger counties, rates run from 1.25% in Vanderburgh County (Evansville) to 2.25% in Madison County (Anderson), so the same salary can cost several hundred dollars more depending on where you rent. Hammond and Gary, on the Chicago side of the state, sit in Lake County at 1.5%.
Indiana paychecks in brief
Indiana taxes wages at a flat 2.95% in 2026, down from 3.0% last year, after a $1,000 personal exemption. A single filer earning $75,000 owes $2,183 in state income tax and takes home $59,409, or $2,285 every two weeks. What sets Indiana apart is the county income tax every county levies on top: 2.02% in Marion County (Indianapolis) costs another $1,495 at the same salary, and your county is fixed by where you lived on January 1. Read the Indiana guide.
Kentucky paychecks in brief
Kentucky cut its flat income tax from 4.0% to 3.5% on January 1, 2026, applied after a $3,360 standard deduction. A single filer earning $75,000 pays $2,507 to the state and takes home $59,085, or $2,273 every two weeks. The cost that surprises newcomers is local: Kentucky cities and counties levy occupational license taxes on wages earned inside their borders, which add $1,650 in Louisville and $2,063 in Lexington at the same salary. Read the Kentucky guide.
Indiana vs Kentucky: FAQ
Does Indiana or Kentucky have lower income taxes in 2026?
On a $75,000 salary, a single filer keeps $324 more a year in Indiana than in Kentucky ($27 a month). Indiana has a flat 2.95% income tax for 2026. Kentucky has a flat 3.5% income tax for 2026.
What salary in Kentucky equals $75,000 in Indiana?
To take home the same $59,409 that $75,000 leaves in Indiana, you would need about $75,500 in Kentucky, based on income, payroll, and state taxes only. Housing and other living costs are not included.
How much more do high earners keep in Indiana than in Kentucky?
At $150,000 the gap is $736 a year: $109,395 in Indiana versus $108,659 in Kentucky. With flat or no state tax, the gap grows roughly in line with salary.
Do Indiana and Kentucky have a reciprocity agreement?
Yes. If you live in one of these states and work in the other, you can usually file a nonresident exemption form with your employer so only your home state withholds income tax.
Do local taxes change the Indiana vs Kentucky comparison?
Indiana has local wage taxes in places like Indianapolis (2.02% (Marion County)), Fort Wayne (1.59% (Allen County)), Evansville (1.25% (Vanderburgh County)). Kentucky has local wage taxes in places like Louisville (2.2% / 1.45%), Lexington (2.75% / 2.25%), Bowling Green (2%). Those are on top of the statewide figures above, so check the city calculators if you live or work in one of them.