State comparison
Alabama vs Indiana: which state is better to live in?
Indiana costs a median household about $1,100 a year less in state and local taxes than Alabama, mostly because its income tax takes 3.0% of a median income against 4.9% in Alabama.
Alabama
Moderate tax burden · COL index 87
Wins 5 categories
Indiana
Moderate tax burden · COL index 87
Wins 8 categories
Taxes: Alabama vs Indiana
Alabama has a graduated income tax topping out at 5%, which works out to 4.9% on a median income of $74,580, or $3,689 a year. Indiana has a flat 3.05% income tax, which works out to 3.0% on a median income of $74,580, or $2,200 a year. Indiana wins on income tax at 2026 rates.
Property tax is 0.39% of home value a year in Alabama and 0.71% in Indiana (Tax Foundation, 2023); on each state's median home that is $850 against $1,704, so Alabama has the lower rate.
Combined state and local sales tax averages 9.22% in Alabama and 7.00% in Indiana; Indiana is lower.
Add it up for a household earning $74,580 (the 2022 national median) and owning the median home: $6,602 a year in Alabama, $5,470 in Indiana. Indiana is cheaper on total state and local tax.
Housing and cost of living
Alabama's cost of living index is 87 and Indiana's is 87, where 100 is the national average; the two are level.
The median home costs $218K in Alabama and $240K in Indiana (Zillow, 2024), a $22K gap in Alabama's favor. A two-bedroom rents for about $1,050 a month in Alabama and $1,100 in Indiana.
Home insurance averages $2,400 a year in Alabama and $1,500 in Indiana, so Indiana is cheaper to insure.
Safety
Violent crime runs 547 incidents per 100,000 residents in Alabama and 396 in Indiana (FBI Crime Data Explorer, 2023); Indiana is the safer state by that measure, with a rate 38% lower. Property crime is 2,247 per 100,000 in Alabama against 1,767 in Indiana, again favoring Indiana.
Health
Life expectancy is 73.2 years in Alabama and 75.5 in Indiana (County Health Rankings, 2024), a 2.3-year edge for Indiana. The Commonwealth Fund's 2023 scorecard ranks Alabama's health system 41st of 50 and Indiana's 42nd, so Alabama scores better on care.
11.2% of Alabama residents have no health insurance against 8.9% in Indiana, which favors Indiana. Indiana expanded Medicaid and Alabama did not.
Schools
Education Week's 2023 Quality Counts report ranks Alabama's K-12 schools 44th in the country and Indiana's 27th, 17 places apart in Indiana's favor. Both states run school-choice voucher programs.
Laws and politics
In the 2024 presidential election Alabama went to Trump by 28 points and Indiana went to Trump by 19 points.
Alabama has permitless carry and a Giffords gun-law grade of F; Indiana has permitless carry and a grade of F.
Abortion is banned with narrow exceptions in both states, and marijuana is medical only in Alabama and illegal in Indiana as of 2026. The minimum wage is $7.25 an hour in Alabama and $7.25 in Indiana.
Climate and risk
Natural disaster risk is moderate in Alabama (tornado, flood) and moderate in Indiana (tornado, flood). Annual average air quality index is 38 in Alabama and 48 in Indiana (under 50 is good), favoring Alabama.
Tax figures use a household earning the national median income and owning each state's median home, at tax year 2026 rates, last checked against state sources on 2026-09-14. The table below has every number.
Taxes
Housing & Cost of Living
Crime & Safety
Healthcare
Education
Childcare
Utilities & Daily Costs
Social Policy
Category wins
5
Alabama
8
Indiana
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Score For My Profile →Questions people ask
Is Alabama or Indiana better to live in?
Indiana wins more of the measures that decide a move. Indiana on taxes ($5,470 a year for a median household against $6,602); Indiana on safety (396 violent crimes per 100,000 against 547); Indiana on schools (ranked 27th against 44th).
Which is cheaper, Alabama or Indiana?
Day-to-day costs are level: both states sit at a cost of living index of 87. The median home is $218K in Alabama and $240K in Indiana (2024). On state and local taxes Indiana saves a median household about $1,100 a year.
Does Alabama or Indiana have lower taxes?
Indiana. A household earning $74,580 pays about $6,602 a year in Alabama ($3,689 income tax, $850 property tax on the median home and $2,063 in sales tax) and $5,470 in Indiana ($2,200 income tax, $1,704 property tax on the median home and $1,566 in sales tax), at 2026 rates.
Which is safer, Alabama or Indiana?
Indiana, on the FBI's 2023 figures. Violent crime is 547 per 100,000 residents in Alabama and 396 in Indiana; property crime is 2,247 against 1,767.
Which has better schools, Alabama or Indiana?
Indiana. Education Week's 2023 Quality Counts report ranks Alabama 44th of 50 for K-12 and Indiana 27th.
Is Alabama or Indiana better for retirees?
Alabama is friendlier to retirees on paper. Alabama does not tax Social Security, exempts pensions and has no estate or inheritance tax; Indiana does not tax Social Security, partly exempts pensions and has no estate or inheritance tax. Property tax on a median home is $850 a year in Alabama and $1,704 in Indiana.