When spring 2026 property tax bills land in Indiana mailboxes this month, most homeowners will notice a brand-new line: a supplemental homestead credit equal to 10% of the bill, capped at $300. It is the single most visible piece of SB 1, the property tax reform package signed in 2025, and it's the one homeowners ask about most.
This post walks through who qualifies, where the credit shows up on the bill, how it stacks with the other SB 1 changes, and runs the math on a sample $250,000 home in Hamilton County so you can predict exactly what to expect.
What the Credit Is — and Isn't
The new credit is a dollar-for-dollar reduction of your property tax bill after all other deductions and credits have been applied. It is calculated as 10% of your remaining bill, with a hard ceiling of $300 per homestead per year.
It is not:
- A deduction (those reduce your assessed value before the tax rate is applied)
- An exemption (those zero out a portion of AV entirely)
- Means-tested (no income cap, no age cap, no asset test)
- Something you apply for separately
It is automatic. If your county auditor already has your homestead deduction on file, the credit lands on your spring 2026 bill without any action on your part.
Who Automatically Qualifies
You qualify if all four of the following are true on the assessment date (January 1, 2025):
- You owned the property
- The property is your primary residence
- You are an individual (LLCs, corporations, and most trusts don't qualify, with limited exceptions for revocable living trusts)
- The homestead deduction is already on file with your county auditor
If any one of those is missing, the credit is missing. The most common failure mode is the fourth: homeowners who bought during 2025 and never filed a new HC-10 application. The seller's homestead deduction does not transfer with the deed.
If you bought a home in 2025 and haven't filed Form HC-10 with the county auditor, you'll lose both the homestead deduction and the new $300 credit on your spring 2026 bill. File immediately — many counties accept retroactive filings, but you have to ask.
Where the Credit Appears on Your Bill
Indiana property tax bills are organized as a stack of additions and subtractions. The new credit sits near the bottom, after the 1%/2%/3% circuit breaker cap is applied. The order on your TS-1 statement is roughly:
- Gross assessed value
- Standard homestead deduction (−$48,000)
- Supplemental homestead deduction (−40% of the remainder, up from 35% in 2025)
- Other deductions (mortgage, over-65, disabled veteran, etc.)
- Net assessed value × your local tax rate = gross tax
- Circuit breaker cap reduction (if applicable)
- NEW: 10% supplemental homestead credit (max $300)
- Other credits (over-65 credit, blind/disabled credit)
- Net tax due
The credit appears on the spring installment (due May 10, 2026) and again on the fall installment (due November 10, 2026), split roughly in half.
For the full anatomy of the bill, see our line-by-line tax bill walkthrough.
The Math on a $250,000 Hamilton County Home
Consider a primary residence in Hamilton County assessed at $250,000 with a local tax rate of $20.00 per $1,000 of net AV.
Step 1: Apply the Homestead Deductions
| Item | 2025 (old rules) | 2026 (SB 1) |
|---|---|---|
| Gross AV | $250,000 | $250,000 |
| Standard deduction | −$48,000 | −$48,000 |
| Remainder | $202,000 | $202,000 |
| Supplemental deduction | −$70,700 (35%) | −$80,800 (40%) |
| Net taxable AV | $131,300 | $121,200 |
Step 2: Apply the Tax Rate
At $20/$1,000:
- 2025 gross tax: $131,300 × 0.020 = $2,626
- 2026 gross tax: $121,200 × 0.020 = $2,424
Step 3: Check the 1% Circuit Breaker
The homestead cap limits tax to 1% of gross AV = $2,500. In 2025 the gross tax of $2,626 exceeds the cap, so the bill drops to $2,500. In 2026 the gross tax of $2,424 is already below the cap, so no circuit breaker reduction.
Step 4: Apply the New 10% Credit
10% of $2,424 = $242.40, which is below the $300 ceiling. The full $242.40 is credited.
Final Bill
| Year | Net tax |
|---|---|
| 2025 | $2,500 |
| 2026 | $2,182 ($2,424 − $242) |
That's a $318 reduction year-over-year, or roughly 13%, on a home where the assessed value didn't move at all. The reduction comes from two stacking SB 1 changes: the supplemental deduction bumping from 35% to 40%, and the new 10% credit on top.
Who Hits the $300 Cap
The credit caps at $300, which means you stop benefiting once your bill exceeds $3,000. That covers most homesteads in lower-rate counties, but in higher-AV markets or counties with above-average rates the cap binds quickly.
A rough rule: if your post-deduction net AV is above $150,000 in a county with a $20+ tax rate, you'll hit the cap. That includes most of Hamilton, Boone, and Hendricks County homes above ~$300,000 AV, and many Marion County homes in higher-rate townships.
How It Stacks With Other 2026 Changes
The 10% credit is one of three SB 1 changes hitting your spring 2026 bill simultaneously:
- Supplemental homestead deduction rises from 35% to 40% (and continues climbing to 66% by 2031)
- Over-65 deduction converts to a flat $150 credit with relaxed eligibility — see our senior credit guide
- Local levy freeze prevents counties from clawing back the relief through higher levies
For the comprehensive breakdown of every SB 1 provision, read our SB 1 reform overview.
What If the Credit Isn't on Your Bill?
If your spring 2026 bill arrives without the credit and you believe you qualify, three things to check:
- Homestead deduction on file? Pull up your parcel record and confirm "Standard Homestead" appears in the deduction list. If not, file Form HC-10 with the county auditor.
- Property still your primary residence on January 1, 2025? The credit is anchored to that date. If you moved out before then, you don't qualify for the 2026 cycle.
- Bill issued correctly? Auditor errors happen. Call the county auditor's office (not the assessor) — most credit-application errors are corrected administratively without an appeal.
Verify Your Credit With Property Lookup
Pull up your parcel and confirm the homestead deduction status before May 10:
- Marion County — Indianapolis
- Hamilton County — Carmel, Fishers, Noblesville
- Allen County — Fort Wayne
- Lake County — Gary, Hammond
- St. Joseph County — South Bend