Indiana Mileage Deduction 2026: State Tax + All 92 County Taxes

Indiana is one of the few states where every single county levies its own income tax. The state rate is a flat 2.95%, and county rates range from 0.5% to 2.86%. Your mileage deduction can reduce both layers.

Combined Rates

Your total Indiana income tax rate is state (2.95%) plus your county rate. For example, Marion County (Indianapolis) adds 2.02%, for a combined 4.97%. Jasper County adds 2.86%, for a combined 5.81%.

At 15,000 business miles in Indianapolis: $10,875 deduction saves roughly $541 in combined state + county taxes, plus $4,056 federal. Total: about $4,597.

How to File

Deduct on federal Schedule C, Line 9 at 72.5¢/mile. Indiana starts with your federal adjusted gross income, so the deduction flows through to your state return. You also need to file county income tax, check your county's rate at the Indiana Department of Revenue. Keep a mileage log with the date, destination, purpose, and miles for each trip.

Employer Reimbursement

Indiana does not require private employers to reimburse mileage.

FAQ

Does my county tax rate affect my mileage savings?

Yes. Higher county tax rates mean higher savings per deductible mile. Check your county's rate at the Indiana Department of Revenue.

Does my mileage deduction reduce Indiana state taxes?

Yes. Indiana uses your federal AGI as the starting point. Your Schedule C mileage deduction reduces that number, which directly reduces both your state tax (2.95%) and your county tax.

Can W-2 employees deduct mileage in Indiana?

No. The mileage deduction for W-2 employees was permanently eliminated under the One Big Beautiful Bill. Indiana does not require employer reimbursement, so if your employer does not reimburse, you have no tax remedy.

State tax plus county tax. Make sure you're deducting both. Start free →