How to File LLC Taxes in Indiana (2026)
A single-member Indiana LLC reports its income on Form IT-40 with the Indiana Department of Revenue. A multi-member LLC files Form IT-65, an S-corp election files Form IT-20S and a C-corp election files Form IT-20.
Every one of those forms pairs with a federal return, and Indiana taxes income at a flat 2.95% individual rate and a 4.90% corporate rate.
Federal taxes still apply on top of these state forms, and a few extra state taxes can catch owners off guard.
Quick Summary
- Nail down your LLC's tax classification first. It sets which Indiana form and which deadline you're working with.
- Check the current individual and corporate rates on the DOR site before you calculate what you owe. Indiana's rate can change from year to year.
- Talk to a CPA before you elect PTET or S-corp treatment. The right fit for your ownership group makes those elections worth the paperwork.
Indiana LLC Tax Summary
How much your Indiana LLC owes depends on its classification. Use the table below to match your LLC's type to its federal form, state form, filing agency, deadline and rate.
| LLC Type | Federal Form | State Form | Filed With | Filing Deadline & Tax Rate |
|---|---|---|---|---|
| Single-member LLC | Schedule C (Form 1040) | Form IT-40 | Indiana DOR | April 15 2.95% flat rate (owner's personal return) |
| Multi-member LLC | Form 1065 | Form IT-65 | Indiana DOR | April 15 Pass-through (no entity-level tax unless PTET elected) |
| S-Corp election | Form 1120-S | Form IT-20S | Indiana DOR | April 15 Pass-through (no entity-level tax unless PTET elected) |
| C-Corp election | Form 1120 | Form IT-20 | Indiana DOR | May 15 4.90% flat corporate rate |
How Indiana LLCs Are Taxed
Indiana taxes LLCs as pass-through entities by default. The LLC itself never owes state income tax directly unless it elects PTET. Profit and loss flow through to the members, and each one reports their share on their own return.
Members can change that default by electing S-corp or C-corp treatment with the IRS, and Indiana simply follows whichever classification the IRS assigns.
That choice starts as soon as you start an LLC in Indiana. The file LLC taxes hub covers the federal rules behind each election.
1. Single-Member LLC (Form IT-40)
A single-member LLC is a disregarded entity by default. The owner reports LLC income on their personal Form IT-40, the same return anyone with Indiana income files, and there's no separate state LLC filing.
Form IT-40 is due April 15 for calendar-year filers, and the owner pays Indiana tax on that income at the state's flat individual rate.
2. Multi-Member LLC (Form IT-65)
2. Multi-Member LLC (Form IT-65)
A multi-member LLC files Indiana Form IT-65, the state partnership return, alongside the federal Form 1065. Each member gets a Schedule K-1 showing their share of profit or loss. Each member then reports that share on their own Form IT-40.
The LLC itself still owes no state income tax on that income unless it elects PTET. Form IT-65 is due the 15th day of the fourth month after the tax year closes. For a calendar-year partnership, that's April 15.
3. S-Corp Election (Form IT-20S)
3. S-Corp Election (Form IT-20S)
An LLC that elects S-corp status with the IRS files Indiana Form IT-20S instead of IT-65. The entity still passes income through to the shareholders' personal returns, and each shareholder reports their share on Form IT-40.
Form IT-20S shares that same April 15 deadline as the partnership return. S-corps and partnerships both close their books on the same schedule.
The S-corp election can cut the income subject to federal self-employment tax. Only wages paid to owner-employees carry that tax, and distributions don't.
4. C-Corp Election (Form IT-20)
4. C-Corp Election (Form IT-20)
An LLC that elects C-corp status files Indiana Form IT-20. It pays the state's corporate rate on its own income, separate from its owners' personal returns.
Form IT-20 is due the 15th day of the fifth month after a calendar-year close. For most LLCs, that's May 15, one month later than the partnership and S-corp deadlines.
C-corp owners face two layers of tax. The corporation pays Indiana's corporate rate first, and shareholders pay tax again on any dividends they receive.
5. Indiana Income Tax Rate for Tax Year 2026
5. Indiana Income Tax Rate for Tax Year 2026
Indiana's flat individual income tax rate is 2.95% for tax year 2026. It steps down to 2.90% for 2027 [1].
That rate applies to single-member LLCs. It also applies to multi-member LLCs and S-corps whose owners report their share on Form IT-40. Indiana's separate corporate rate, which applies to C-corp elections, is a flat 4.90%.
County income taxes add to that individual rate and vary by county. Confirm your county's current rate on the DOR site before you file.
Federal Taxes Indiana LLC Owners Pay
Any LLC member who reports business income on a personal return also owes the federal self-employment tax. It runs 15.3% total, split into 12.4% for Social Security and 2.9% for Medicare [2]. Indiana has no separate state-level version of that tax.
Members who don't have enough tax withheld elsewhere make quarterly estimated payments both federally and to Indiana. Those payments fall due April 15, June 15, September 15 and the following January 15. Use Form IT-40ES for the state portion.
Other Indiana Taxes That May Apply
Beyond income tax, your Indiana LLC may owe other taxes too. What applies depends on how and where you operate: unemployment insurance, sales tax or industry and local taxes.
1. Employer Taxes
An LLC with employees registers for unemployment insurance with the Indiana Department of Workforce Development through its Employer Self Service portal. Premiums apply to the first $9,500 of each worker's wages per year.
Most new employers pay a flat 2.50% rate for their first four calendar years in Indiana. Established employers pay anywhere from 0.50% to 7.40% based on their claims history [3].
2. Sales and Use Tax
2. Sales and Use Tax
If your LLC sells goods or tangible personal property in Indiana, you must register to collect a 7% sales tax before you make your first taxable sale.
Once you register, Indiana issues a Registered Retail Merchant Certificate, and you need a separate certificate for each retail location you operate.
3. Industry and Local Taxes
3. Industry and Local Taxes
Local and industry-specific taxes may apply depending on where and how your LLC operates. Confirm what applies with your county clerk's office or the Indiana DOR.
If you're still finalizing your formation paperwork, a registered agent in Indiana keeps you from missing any of these notices in the mail.
Indiana Pass-Through Entity Tax (PTET) Election
Indiana lets eligible partnerships and S-corps pay state income tax at the entity level instead of passing it to the owners [4].
Federal law caps the state and local tax deduction at $10,000 per individual return, and the PTET election skips that cap entirely.
The PTET rate matches the individual income tax rate for the entity's tax year. Single-member LLCs, C-corps and sole proprietorships can't make this election.
You elect by checking the PTET box on Form IT-20S or IT-65 and completing Schedule PTET, filed with your return by its due date or extended due date.
What Is Deductible for an Indiana LLC
Several Indiana tax credits pass through from the LLC to its owners on Schedule IN K-1. That reduces what the owners pay on Form IT-40 [5].
The Indiana Research Expense Credit rewards LLCs that increase qualified research spending in the state. The Hoosier Business Investment Credit and the Headquarters Relocation Credit are two more credits that pass through to LLC owners the same way.
The Qualified Business Income deduction under IRC Section 199A is a federal deduction only. It reduces what pass-through owners report to the IRS, and it sits apart from the Indiana credits above.
References
References:
- https://www.in.gov/dor/resources/tax-rates-and-reports/rates-fees-and-penalties/
- https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes
- https://www.in.gov/dwd/indiana-unemployment/employers/employer-guide/rate-computation/new-employer-premium-rate
- https://www.in.gov/dor/tax-forms/other-forms/ptet/faq/
- https://www.in.gov/dor/files/ib59.pdf
FAQs
What Is Indiana's County Income Tax Rate Range?
Indiana county income tax rates range from 0.5% to 2.95% depending on where you're located, as of Jan. 1, 2026. Check the Department of Revenue's county rate table for your specific county before you file.
When Must an Indiana LLC Make Its PTET Election?
An Indiana LLC must make its PTET election anytime during the tax year, or with its timely filed return, including extensions. There's no separate March deadline like some other states use.
