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On December 29, 2025, Indiana Governor announced significant changes to the state's tax laws that will go into effect starting January 1, 2026. The new tax law aims to simplify the tax code, promote economic growth, and provide relief to Hoosier taxpayers.One of the key changes is the reduction of the individual income tax rates across all brackets. The tax rates will decrease by an average of 10%, providing much-needed relief to Indiana residents. Additionally, the standard deduction for individuals and married couples filing jointly will increase, further benefitting taxpayers.Another significant change in the tax law is the increase in the corporate tax rate. The corporate tax rate will be raised by 2%, with the revenue generated from this increase being allocated to funding infrastructure projects and education initiatives in the state.In an effort to promote small business growth, the new tax law also includes provisions for a tax credit for small businesses that hire Indiana residents. This tax credit aims to incentivize businesses to create more job opportunities for local residents, ultimately boosting the state's economy.Governor also announced changes to the sales tax laws, including exemptions for certain essential items such as diapers and feminine hygiene products. This change aims to make these necessary items more affordable for Indiana residents, particularly those facing financial hardship.Overall, the new tax law changes are expected to have a positive impact on Indiana's economy and provide relief to taxpayers across the state. Governor believes that these changes will make Indiana a more attractive place to live, work, and do business, positioning the state for continued growth and prosperity in the coming years.