INDIANAPOLIS – As Indiana moves forward with a $1.1 billion tax cut plan, we’re taking a look how much it would save you and your family.

The new law will reduce the state’s income tax and eliminate the utility receipts tax.

Currently Indiana’s state income tax rate is 3.23%. Under the new law. it will drop to 3.15% next year. For Hoosiers with a $50,000 per year income, that would save $40 annually.

Additional cuts to the income tax would happen if the state can meet certain conditions for state revenue growth and pay off teacher pension debt. That would gradually bring the state income tax down to 2.9% by 2029.

The full income tax cut would save Hoosiers on a $50,000 salary $165 dollars per year.

According to Justin Ross, professor of economics at Indiana University, the overall economic impact would be small as the full tax cut is spread over seven years. But it would still help put additional money into the state’s economy.

“It does add up, so when you leave money in the pockets of families, they are going to use it in ways that they see that are beneficial,” Ross said. “So there should be some positive effects from that.”

The tax cut plan will also save you some money on your utility bill.

The utility receipts tax will end July 1. That’s a 1.4% tax, so the savings will vary widely for homeowners and businesses.

Homeowners could save a few dollars a month, but some businesses could save a significant amount of money.

According to Kevin Brinegar, president and CEO of the Indiana Chamber of Commerce, some manufacturers could save thousands of dollars.

“Arguably it’s not going to make or break any particular business in terms of their cost structure,” said Brinegar, who advocated for the tax cut plan. “But it’ll help with with the inflation. It makes our tax climate rankings better.”

Republican legislative leaders, who have backed the legislation, have previously said they feel “confident” the state will meet the conditions needed for the full income tax cut to go into effect in seven years.