INDIANA — As the calendar turns to 2026, Hoosiers are facing a wave of legislative changes that will impact everything from their bank accounts to their grocery carts. From a historic $1.3 billion property tax overhaul to the launch of Smart SNAP, here is a breakdown of the new laws that went into effect on January 1.
Property Tax Overhaul: Senate Enrolled Act 1
In one of the most significant shifts to Indiana’s tax code in years, Senate Enrolled Act 1 is designed to provide massive relief to homeowners. While the full impact will be felt over the next three years, the first changes appear on 2026 tax bills.
- Deduction Shift: The traditional $48,000 standard home deduction is beginning to phase out. To compensate, the supplemental deduction—which applies to the remaining value of the home—will rise from 37.5% to 40% this year, eventually hitting 66% by 2031.
- Automatic Credit: Homeowners will receive a new credit of either $300 or 10% of their total tax bill (whichever is lower).
- Senior Relief: Eligible seniors will see increased property tax credits, ensuring savings even for those whose home values have already hit the state’s property tax caps.
- Tax Deferral: Counties now have the option to allow residents to defer up to $500 annually (capped at $10,000) on their property taxes until the home is sold.
Smart SNAP Restrictions Launch
Under a new executive order from Governor Mike Braun, Indiana has become a national leader in nutritional reform for the Supplemental Nutrition Assistance Program (SNAP). As of January 1, SNAP benefits can no longer be used to purchase candy or sugary drinks.
“This is about tackling the root causes of our public health challenges,” said Gov. Braun. “We are ensuring government programs support healthier communities.”
What is restricted?
- Candy: Any sugar or sweetener-based bars, drops, or pieces (excluding items that require refrigeration).
- Sugary Drinks: Non-alcoholic beverages with natural or artificial sweeteners.
- Exemptions: Milk, soy/milk substitutes, and 100% natural fruit or vegetable juices remain eligible for purchase.
Income Tax Reduction
Continuing a multi-year effort to lower the state’s tax burden, Indiana’s flat individual income tax rate has dropped from 3% to 2.95%. This is part of a scheduled descent that aims to make Indiana one of the most competitive tax environments in the country; the rate is currently slated to drop again to 2.9% in 2027.
New Privacy Rights: Consumer Data Protection Act
For the first time, Hoosiers have a formal “Data Consumer Bill of Rights” as the Indiana Consumer Data Protection Act goes into effect. Enforced by Attorney General Todd Rokita, the law gives residents more control over their digital footprint.
Under the new law, you have the right to:
- Know: Confirm if a company is processing your personal data.
- Access: Obtain a copy of your data once a year for free.
- Correct: Fix inaccuracies in the data a company holds about you.
- Delete: Request the removal of your personal information.
- Opt-Out: Stop the sale of your data or its use for targeted advertising and profiling.
Companies that violate these rights face a 30-day “cure period” to fix the issue before facing fines of up to $7,500 per violation.
