What is the Indiana PTET rate?

Indiana's PTET rate is 2.95% flat. IN DOR PTET FAQ ('The tax rate would be the same as the individual income tax rate for the tax year') + IN DOR Rates Fees & Penalties ('Indiana Individual adjusted gross income tax rate for 2026 is 2.95%')

Is the Indiana owner credit refundable?

Indiana's PTET owner credit is refundable.

Does Indiana PTET affect composite-return filing?

Stacks. See the composite-vs-PTET page for the full matrix.

Indiana · IN

Indiana Pass-Through Entity Tax (PTET)

Indiana's PTET regime is one of the 37+ state workarounds to the federal SALT cap (IRC §164(b)(6)). The election is annual, statute-pinned below, and interacts with composite filing and §199A QBI in state-specific ways.

Statute: Ind. Code IC 6-3-2.1 (Pass-Through Entity Tax); SEA 2 (2023), retroactive to tax years beginning 2022
State DOR portal: https://www.in.gov/dor/tax-forms/other-forms/ptet/
Election deadline: [PLACEHOLDER: state DOR cite] — Form IN-PTET election deadline to be pinned to in.gov/dor/files/ptet-instructions.pdf.
Election form: Form IN-PTET (Pass Through Entity Tax Election); IT-20S (S corp) or IT-65 (partnership)
Entity-level rate: 2.95% — IN DOR PTET FAQ ('The tax rate would be the same as the individual income tax rate for the tax year') + IN DOR Rates Fees & Penalties ('Indiana Individual adjusted gross income tax rate for 2026 is 2.95%')
Eligible entities: s-corp, partnership, llc-as-s, llc-as-partnership
Owner credit: refundable
Composite interaction: stacks
§199A QBI base reduction: Yes — Reduces federal flow-through income (Notice 2020-75).
Last verified: 2026-05-12

Source: in.gov/dor/tax-forms/other-forms/ptet/ + Form IN-PTET (forms.in.gov/Download.aspx?id=15526). IN was a late adopter (2023, retroactive to 2022).

IRC §164(b)(6)Notice 2020-75 IRC §199A

Reference computation

For a Indiana pass-through entity with $500,000 of qualified net income allocated to this state, at a 37% federal marginal bracket, the entity-level PTET and federal-deduction math is:

Indiana — reference example

QBI allocation·IN rate= Entity-level tax

$500,000×3%=$14,750

Ind. Code IC 6-3-2.1 (Pass-Through Entity Tax); SEA 2 (2023), retroactive to tax years beginning 2022

Entity tax·Federal bracket= Federal deduction (gross)

$14,750×37%=$5,458

At a 37% federal bracket, the entity-level deduction saves $5,458 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,092), aggregate benefit is approximately $4,366.

IRS Notice 2020-75

Run the picker pre-filled for Indiana

Election walkthrough

Verify eligibility. Indiana accepts: s-corp, partnership, llc-as-s, llc-as-partnership. Estates and trusts cannot elect.
Check the deadline. [PLACEHOLDER: state DOR cite] — Form IN-PTET election deadline to be pinned to in.gov/dor/files/ptet-instructions.pdf. Estates and trusts cannot make the PTET election themselves (but can pass through PTET to beneficiaries).
Compute the entity-level tax. Apply the 2.95% rate to qualified net income.
Pay and file. Use Form IN-PTET (Pass Through Entity Tax Election); IT-20S (S corp) or IT-65 (partnership). Quarterly estimates may be required.
Owners claim the state credit. refundable credit on the personal state return.
Verify composite interaction. Composite interaction: stacks. See composite vs PTET.
Run the federal §199A QBI math. PTET reduces the QBI base proportionally; net the federal SALT-arbitrage against the §199A offset.

Indiana PTET — common questions

Annual deadline reminder

State PTET law revises annually. Indiana's data was last verified on 2026-05-12. Re-confirm with the state DOR primary source before electing or filing. Last full-site review: 2026-05-12.

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Reference computation

For a Indiana pass-through entity with $500,000 of qualified net income allocated to this state, at a 37% federal marginal bracket, the entity-level PTET and federal-deduction math is:

Entity tax·Federal bracket= Federal deduction (gross)

$14,750×37%=$5,458

At a 37% federal bracket, the entity-level deduction saves $5,458 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,092), aggregate benefit is approximately $4,366.

IRS Notice 2020-75

Election walkthrough

Verify eligibility. Indiana accepts: s-corp, partnership, llc-as-s, llc-as-partnership. Estates and trusts cannot elect.

Check the deadline. [PLACEHOLDER: state DOR cite] — Form IN-PTET election deadline to be pinned to in.gov/dor/files/ptet-instructions.pdf. Estates and trusts cannot make the PTET election themselves (but can pass through PTET to beneficiaries).

Compute the entity-level tax. Apply the 2.95% rate to qualified net income.

Pay and file. Use Form IN-PTET (Pass Through Entity Tax Election); IT-20S (S corp) or IT-65 (partnership). Quarterly estimates may be required.

Owners claim the state credit. refundable credit on the personal state return.

Verify composite interaction. Composite interaction: stacks. See composite vs PTET.

Run the federal §199A QBI math. PTET reduces the QBI base proportionally; net the federal SALT-arbitrage against the §199A offset.

Indiana PTET — common questions