2026 tax year · Indiana
RSU tax in Indiana
A $60,000 vest costs $1,770 in Indiana tax on top of the federal bill. And the federal share withheld is $2,970 short.
What a $60,000 vest actually costs in Indiana
A single filer already earning $180,000 in salary. The vest stacks on top of that, so it fills the highest brackets rather than starting at the bottom:
| Withheld by your employer at 22.0% | $13,200 |
| Federal tax the vest actually costs | $16,170 |
| Federal shortfall, owed in April | $2,970 |
| Indiana income tax on the vest | $1,770 |
| Total still to find | $4,740 |
The withholding rate is flat, 22.0% below $1 million of supplemental pay. And takes no account of your salary. That is why the gap grows the more you earn.
The gap widens with salary
| Salary | Withheld | Actually owed | Shortfall | Indiana tax |
|---|---|---|---|---|
| $90,000 | $13,200 | $13,764 | $564 | $1,770 |
| $160,000 | $13,200 | $14,570 | $1,370 | $1,770 |
| $260,000 | $13,200 | $20,630 | $7,430 | $1,770 |
How Indiana treats a vest
Indiana taxes a vest as ordinary income like any other wages, adding $1,770 on top of the federal bill for $60,000 of vesting stock.
If you moved during the vesting period, the income is split between the states you worked in across it: Days worked in each state / total days in vesting period x RSU income = each state's allocation That is worked out day by day, not by where you lived on the vesting date.
Indiana specifics that change the number
On the 2026 rate itself: rate has been decreasing. Some counties add local income tax.
Indiana also has local income tax that the estimate above does not model, all 92 counties levy local income tax (0.50% to 2.90%).. Add it separately for where you live and work.
What the same vest costs around Indiana
Total income of $240,000 in the states Indiana borders:
| State | Its tax | vs Indiana |
|---|---|---|
| Ohio | $5,884 | −$1,196 |
| Kentucky | $8,400 | +$1,320 |
| Michigan | $10,200 | +$3,120 |
| Illinois | $11,880 | +$4,800 |
- Ohio would take $1,196 less, $5,884 against Indiana's $7,080.
- Kentucky would take $1,320 more, $8,400 against Indiana's $7,080.
- Michigan would take $3,120 more, $10,200 against Indiana's $7,080.
- Illinois would take $4,800 more, $11,880 against Indiana's $7,080.
RSU questions in Indiana
Should I sell at vest?
Selling immediately raises the cash for the $4,740 you still owe and leaves no capital gain, because the sale price equals the price you were already taxed on. Holding turns it into an investment decision, any further gain is a capital gain, and any fall is a loss you take on shares you were already taxed on at the higher value.
I moved to Indiana mid-vest, who taxes it?
Both states, split by workdays. The income is allocated across the vesting period, not assigned to wherever you happened to live on the vesting date. The state you left can still claim its share, and California, New York and Massachusetts pursue it hardest.