YES! It is legal to homeschool in all 50 states. Each state has it's own laws concerning homeschooling and they vary state to state. Here in Indiana we have very friendly laws to work with. The legislators have decided to trust parents to teach and train their children without burdening them with excess paperwork.
Home School Legal Defense Association has worked tirelessly over the past 25 years to help make homeschooling legal. They have a very helpful website that will help you find out more about the legal requirements for each state. You can find out more about the requirements for Indiana here at the HSLDA page for Indiana. They also have a page on the general news and updates concerning Indiana here.
The Indiana Association of Home Educators also has a summary of the laws of homeschooling in the state of Indiana here.
I highly recommend joining Home School Legal Defense Association. Legal issues concerning homeschooling in Indiana are infrequent, but they do happen. Being a member of HSLDA will help ensure that your homeschooling rights will be defended by knowledgeable counsel, and will benefit homeschoolers across our nation.