Indiana Guide for Canadians

Quick Facts

State Income Tax	Flat 3.0% (2025) + local taxes (varies by county)
Sales Tax	7% state only (no local sales tax)
Driver's License Grace Period	60 days for residents
Residency Requirement for Tax	183+ days or domicile in Indiana
Vehicle Registration Deadline	60 days for residents
REAL ID Deadline	May 7, 2025 for domestic flights
Enhanced Driver's License	Not available

First 90 Days Checklist

Week 1-2: Essential Documents & Registration

• Register with USCIS if staying 30+ days (required by April 11, 2025)
• Gather required documents for driver's license
• Open US bank account
• Set up Indiana mailing address

Week 3-4: Official Registration

• Apply for Indiana driver's license (within 60 days)
• Register vehicle if brought from Canada (within 60 days)
• Register to vote (if eligible)
• Update address with financial institutions

Month 2-3: Establishing Residency

• Establish Indiana ties and connections
• Research healthcare options and insurance
• Connect with local Canadian communities
• Consider property ownership or long-term lease

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents:

• Original valid Canadian passport (proof of legal presence)
• Social Security Number documentation (if applicable)
• Two proofs of Indiana residential address
• Out-of-country driver's license in English or with verified translation

Testing Requirements:

• Written knowledge test required for Canadian citizens
• Road skills test required - Indiana does not recognize foreign licenses
• Vision screening required
• Canadian license can be used for 60 days after establishing residency

REAL ID Option:

• Available for qualifying Canadian residents
• Required for domestic air travel after May 7, 2025
• Additional documentation required
• Must apply at BMV branch office

Important Notes:

• 60-day limit to get Indiana license after residency
• REAL ID required by May 7, 2025 for air travel
• Must provide English translation of foreign documents
• Vision test and knowledge exam required

Vehicle Registration

• Register within 60 days of establishing residency
• Annual safety inspection required
• Emissions testing in certain counties
• Indiana insurance required for registration

Tax & Residency Considerations

Indiana State Tax Structure

• **Flat income tax** 3.0% (2025), reducing to 2.9% by 2027
• **Local income tax** added by all 92 counties (varies)
• **No state estate tax** - repealed
• **Moderate property taxes** (0.81% effective rate)
• **High sales tax** 7% state only (no local additions)

Establishing Indiana Tax Residency

Indiana residency is based on domicile and statutory residence:

• Domiciled in Indiana (intent to make permanent home)
• Statutory resident: 183+ days in tax year
• Maintaining permanent place of abode in Indiana

Documentation to Establish Residency

• Indiana driver's license and voter registration
• Bank accounts and utility bills in Indiana
• Employment or business activities in Indiana
• Professional licenses, club memberships
• Property ownership or long-term lease

Business-Friendly Tax Environment

Indiana has one of the most business-friendly tax environments in the US. The flat income tax rate is simple and competitive, with planned reductions through 2027. Property taxes are reasonable, though local income taxes vary by county.

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
New Requirement: Canadians staying 30+ days must register with USCIS by April 11, 2025.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• Indiana has expanded Medicaid with limited access for non-citizens
• Travel insurance strongly recommended
• Consider US health insurance if staying permanently
• Quality medical facilities in Indianapolis, Fort Wayne, Evansville

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Research pharmacy options and discount programs

Special Considerations for Snowbirds

New US Registration Requirements (2025)

• Canadians staying 30+ days must register with USCIS
• Registration required by April 11, 2025
• Print and carry latest I-94 as proof of legal entry
• Failure to register may affect future US travel

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• Indiana domicile-based residency requires careful planning

Property Considerations

• Affordable property values compared to coastal states
• Low property tax rates (0.81% effective)
• Various local tax exemptions available
• Impact on Canada's principal residence exemption

Climate & Lifestyle Factors

• Four distinct seasons with moderate winters
• Central location with easy access to major cities
• Low cost of living compared to national average
• Growing Canadian communities in major metropolitan areas

Geographic Advantages

• Central US location - 'Crossroads of America'
• Within driving distance of Chicago, Cincinnati, Louisville
• Good highway system and Indianapolis International Airport
• Reasonable distance to Canadian border via Detroit/Windsor

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Enhanced Driver's License not available in Indiana
• I-94 registration now required for 30+ day stays

Economic Opportunity

Indiana offers excellent value with low taxes, affordable cost of living, and a business-friendly environment. The state's central location provides easy access to major markets and transportation networks. Indianapolis is a major economic hub with diverse industries.

Key Contacts & Resources