Indiana Over-65 Property Tax Credit: $150 + 2% Cap (Jan 15)

Financial Real Estate Education · Southern Indiana & Louisville KY

Indiana Over-65 Property Tax Credit: Who Qualifies and How to Apply by January 15

Indiana replaced its senior deduction with a $150 credit and expanded its 2% cap. Here's what they're worth, who qualifies, and how to file.

Dollar examples on this page are illustrative. Your bill depends on your assessed value, tax district and eligibility.

If you live in Clark or Floyd County, or you're weighing a move from Louisville to Southern Indiana for retirement, this is one of the few property tax breaks you have to ask for.

In 2025, Indiana replaced its old Over-65 deduction with a $150 credit and expanded the 2% Circuit Breaker, and many homeowners haven't caught up with the change. Here's what each one is worth, who qualifies, and how to file before the deadline.

The old deduction is gone. The new credits don't apply themselves.

Key Terms, in Plain English

What Changed for Indiana Seniors?

The old Over-65 deduction is gone. A new $150 credit replaced it, and the existing Circuit Breaker credit got easier to qualify for. Under Senate Enrolled Act 1 (2025), the deduction no longer applies for assessment dates on or after January 1, 2025. Here's what that means:

A separate $125 credit replaced the deduction for blind or disabled homeowners, with no income limit.

The state's guidance says homeowners who had the old deduction must apply on the new form unless their county transfers them automatically. Once approved, you don't refile each year.

Locally, Sen. Chris Garten, whose district covers Clark County and part of Floyd County, urged seniors already receiving the benefit to apply anyway before the January 2026 deadline. The Clark County Auditor's page doesn't say prior recipients were moved over automatically, so the safe move is to call and confirm.

For the bigger picture on SEA 1, see what's changing on Clark and Floyd County bills.

How Much Is the Over 65 Credit Worth?

Up to $150 a year, subtracted directly from your bill. It's a credit, not a deduction, so it's the same $150 whether your home is worth $180,000 or $400,000.

The credit is reduced if someone on the deed other than your spouse is under 65. For example, an adult child listed as a co-owner can shrink it.

How Does the 2% Circuit Breaker Work?

It caps how much your tax bill can grow each year at 2% over the prior year's bill. If your assessment jumps or local rates rise, the increase above 2% comes off your bill.

This is the closest thing Indiana has to a "senior property tax freeze." It doesn't freeze the bill, but it puts a ceiling on how fast it can climb.

Who Qualifies?

You must be at least 65 by December 31 of the year before the taxes are due, and your income must be under the limit. For bills paid in 2027, that means turning 65 by December 31, 2026, with income measured on your 2025 federal return.

The Circuit Breaker limits rise each year with the Social Security cost-of-living adjustment (2.8% for 2027). The $150 credit's limits are not indexed. A surviving spouse can keep the benefit if they're at least 60.

Your AGI depends on how much you draw from pensions and IRAs, which Indiana's retirement income taxes also affect. For the full picture on living here in retirement, see is Indiana a good state to retire in.

What Could This Save on a Southern Indiana Bill?

Here's an illustrative example for a $250,000 home with a homestead deduction in the City of Jeffersonville. Its 2026 certified rate is about $2.96 per $100 of assessed value, which is high enough that many homestead bills there hit Indiana's 1% cap.

Illustrative only. The order the state applies credits in can shift the result by a few dollars, and your bill depends on your assessed value and district.

Now the Circuit Breaker. Say next year's bill would rise to $2,300. The 2% cap holds it to $2,142 ($2,100 × 1.02), which saves about $158 that year, on top of the $150 credit.

In lower-rate areas such as Georgetown or Greenville Township, where the cap may not apply, the $150 credit is still a flat $150.

How Do I Apply?

File the "Application for Senior Citizen Property Tax Benefits" (State Form 43708) with your county auditor by January 15. One form covers both the Over 65 Credit and the Circuit Breaker.

Timing: Applying by January 15, 2027 applies the credits to your 2026-pay-2027 bill, paid in May and November 2027. Filing in December gives you room to fix a missing document before the deadline.

How Does This Compare to Kentucky?

Kentucky has no 2% cap and no income limit. It takes $49,100 off your home's assessed value instead, which in Jefferson County is worth about $614 a year at the 2026 rate. See how Kentucky's senior homestead exemption works.

Indiana's flat $150 credit is smaller, but Indiana's 1% homestead cap and the 2% Circuit Breaker can limit the whole bill. Which side comes out ahead depends on the home's price and the district, which is why this Kentucky vs. Indiana retirement comparison runs the full numbers.

Common Mistakes

Your Next Steps

Frequently Asked Questions

The credits aren't large on their own, but together with Indiana's 1% cap they can keep a Southern Indiana tax bill predictable in retirement. The catch is that you have to ask, and the deadline is January 15.