Indiana's New Over-65 Credit (SEA 1-2025): The $14,000 Deduction Is Gone, Replaced by a $150 Credit With $60K/$70K Income Limits
Updated April 2026
Senate Enrolled Act 1-2025 fundamentally restructured Indiana's senior property tax program for taxes due starting in 2026. The prior Over 65 Deduction (which removed up to $14,000 from assessed value) has been discontinued and replaced by a new Over 65 Credit capped at $150 on the property tax bill itself. Income limits rose substantially under the new framework, $60,000 AGI single / $70,000 AGI joint, materially higher than the prior deduction's $25,000-$40,000 cap depending on filing status. The application deadline is January 15, application is filed with the County Auditor (not the Assessor), and any third-party guide that still references the $14,000 deduction is reporting on the pre-2026 framework.
What Changed Under SEA 1-2025
Side-by-side comparison of the old and new Indiana senior framework:
- Pre-2026 (Over 65 Deduction): Up to $14,000 reduction in assessed value. Income limits roughly $25,000-$40,000 depending on filing status. Deduction-based mechanism (reduces taxable assessed value before rate is applied).
- 2026 onward (Over 65 Credit): Up to $150 credit applied directly to property tax bill. Income limits $60,000 single / $70,000 joint AGI. Credit-based mechanism (reduces tax owed after the bill is calculated).
Whether the new framework is better or worse for an individual senior depends on the home's value and the local property tax rate. For a low-value home in a low-tax area, the prior $14,000 deduction may have produced less than $150 in actual tax savings, meaning the new $150 credit is an upgrade. For a higher-value home in a higher-tax area, the prior $14,000 deduction may have saved $300-$500 in tax, meaning the new $150 credit is a reduction. The income-cap increase, on the other hand, is unambiguously broader: many seniors with $50,000 in income who didn't qualify under the old rules now qualify under the new $60K/$70K thresholds.
Eligibility: Age, Ownership, Income
For the 2026 cycle:
- Age 65 or older as of December 31, 2025 (the year preceding the tax year).
- Owned or buying the property for at least one year before claiming the credit. Recent buyers wait the year out.
- AGI for tax year 2024 at or below the limit, $60,000 for single filers, $70,000 for married joint filers. The county auditor will request a copy of your 2024 federal tax return for income verification.
- Primary residence requirement (the property must be your principal place of abode).
Application: file with the County Auditor's office by January 15 of the tax year. Note this is the auditor, not the assessor, different office, different role. Apply at the auditor's public counter or via your county's online portal where available.
Property Tax Caps and the 2% Senior Cap (Background)
Indiana's broader property tax framework includes constitutional caps on how much property tax can be charged relative to assessed value:
- 1% cap on owner-occupied residential property (Article 10, §1, Indiana Constitution). The total property tax bill cannot exceed 1% of gross assessed value for homesteads.
- 2% cap on non-homestead residential property and agricultural land.
- 3% cap on commercial and other property.
These caps apply to all property regardless of age and don't require senior status to claim, they're statewide constitutional protections that already limit property tax burden meaningfully. The Over 65 Credit applies on top of these caps; it's additional relief, not a replacement.
Other Indiana Senior Programs
Adjacent programs that may apply alongside the Over 65 Credit:
- Disabled Veteran Deduction: for veterans with service-connected disability, varies by rating; up to $24,960 reduction in assessed value for fully disabled veterans.
- Homestead Standard Deduction: available to all owner-occupants regardless of age, $48,000 reduction in assessed value (or 60% of value, whichever is less). The senior credit applies on top of this universal deduction.
- Disabled Person Deduction: for disabled persons under 65 with specific qualifying conditions; separate from the senior pathway.
Frequently Asked Questions
I read I could deduct $14,000 from my assessed value as a senior. Is that still true?
No, not for taxes due in 2026 or later. Senate Enrolled Act 1-2025 discontinued the Over 65 Deduction (which had reduced assessed value by up to $14,000 for qualifying seniors) and replaced it with the Over 65 Credit (a $150 reduction in the tax bill itself). Any guide written before the 2025 legislative session that still references the $14,000 figure is reporting on the prior framework. The $48,000 universal Homestead Standard Deduction remains in effect, that one is for all owner-occupants regardless of age and was not affected by SEA 1-2025.
My income is $65,000 (single). Do I qualify under the new rules?
No, the single-filer income cap is $60,000 of AGI. At $65,000 you're above the threshold for single filers but below the joint cap of $70,000 (which applies only to married couples filing jointly). The income test is based on tax year 2024 AGI for the 2026 tax cycle. If your income drops below $60,000 in a future year, eligibility opens then.
I missed the January 15 deadline. Can I still apply?
Some Indiana counties accept late applications with limited grace; others strictly enforce the January 15 deadline. Contact your County Auditor immediately if you missed the deadline; if they accept the late filing, the credit may apply to the current year. If not, file early in the next cycle to ensure the credit applies to the following tax year. Don't assume the deadline is flexible, most counties enforce it.
$150 isn't much. Is there anything else I qualify for?
The Homestead Standard Deduction ($48,000 of assessed value, available to all owner-occupants) is a much bigger lever than the senior credit and doesn't require senior status. Make sure you've claimed it. The Indiana property tax caps (1% for homesteads) also limit your maximum tax burden regardless of age. If you're a disabled veteran, the Disabled Veteran Deduction can reach $24,960 in assessed value reduction, much larger than the senior credit. The senior credit is real but modest; combining it with the universal homestead deduction and any veteran benefits captures more of the available relief.
