State note: [VERIFY]
Decode a Indiana-resident QSBS exit
The decoder loads pre-filled with IN as the state of residence. Change any input — issuance date, gain, basis — to see how this state's conformity rule reshapes the all-in tax.
What a Indiana resident pays
$5,000,000 exit, 5+ year hold, post-OBBBA rules.
Example gain selected deterministically per state to reflect conformity profile; post-OBBBA rules, 5+ year hold, full federal 100% exclusion within the per-issuer cap. State arithmetic uses top marginal rate as a conservative upper bound — bracketed rates apply in practice. Change any input and open in the decoder to model your own facts, then cross-check the underlying citations on sources.
Residency test — which state's rule actually applies
State conformity applies based on the taxpayer's state of residence at the time of sale, not at the time of issuance. If you held QSBS while resident in one state, then established residency in Indiana before the exit, Indiana's rule generally controls the state-tax leg of the transaction.
Part-year residents typically apportion the gain across states by residency days within the tax year. Most states also apply a statutory residence test (often a 183-day physical-presence threshold or a domicile-plus-permanent-place-of-abode rule) that can pull a recent mover back into the prior state's tax base. Establish facts — driver's license, voter registration, primary home, days-in-state log — well before the sale, not after.
The decoder does not model multi-state apportionment or residency challenges. For relocation-timed exits, consult a CPA with state residency expertise; this is the single highest-impact lever in QSBS state planning. Residency at exit also interacts with the federal five-year holding period for state purposes — the federal clock keeps running across state lines, but the state-tax leg only attaches once you cross the state's residency threshold in the year of sale.
State-return reporting
Federally, the §1202 exclusion is reported on Form 8949 with adjustment code Q and the unexcluded slice flows to Schedule D with the 28% rate via the Schedule D 28% Rate Gain Worksheet.
The corresponding Indiana state-return line varies by tax year and form revision. Rather than pin a specific line number (which would stale within one filing season), this page directs you to the current Indiana DOR instructions for the year you are filing. If you would like a per-state line-number table maintained at this site, file a request via contact.
Recent Indiana legislative activity affecting QSBS
[VERIFY] No known recent Indiana legislative changes affecting §1202 state conformity as of 2026-05-11. Federal OBBBA (P.L. 119-21 §70431, signed 2025-07-04) modified federal §1202; state-level response varies by jurisdiction. This slot is reviewed during each conformity-manifest refresh.
Indiana QSBS — frequently asked
Does Indiana tax my §1202 QSBS gain at the state level?
Indiana generally conforms to federal §1202. The federal exclusion is honored at the state level, so state tax applies only to the federally-taxable portion of the gain.
What is Indiana's top marginal rate on capital gains?
Indiana's top marginal personal income rate on long-term capital gains is approximately 3.05% (reference figure for 2026; consult the state DOR for your exact bracket). Most states tax capital gains at ordinary-income rates.
If I moved to Indiana just before selling QSBS, does the state resident rule apply?
State conformity follows the taxpayer's state of residence at the time of sale, not at issuance. If you established Indiana residency just before selling QSBS, Indiana's rule generally applies — subject to that state's domicile, statutory-residence (days-physical-presence), and part-year apportionment tests. Pre-exit relocation is a common founder planning lever; the rules to clear are state-specific.
Does Indiana honor the federal §1045 rollover?
Indiana's treatment of an IRC §1045 rollover at the state level follows state conformity to federal §1045 — usually parallel to its §1202 conformity. Not modeled by this calculator; consult a CPA for state-specific guidance.
Where do I report the §1202 adjustment on the Indiana return?
For full-conformity states, the federal Form 8949 code-Q entry typically flows through to the state return without additional add-back. The exact state return line varies by year and form revision; consult the current Indiana DOR instructions.
Compare Indiana to other states
Same federal exclusion, different state rule. The 50-state grid colors each.