Illinois has a flat 4.95% income tax — the same rate applies to all income levels, making it simple but not always favorable.
Illinois Tax Rate 2026
| Tax Type | Rate |
|---|---|
| State income tax | 4.95% (flat) |
| Chicago city tax | None |
| Capital gains | 4.95% (same as income) |
Illinois is one of about a dozen states with a flat income tax rate.
How Illinois Flat Tax Works
| Taxable Income | Tax Rate | Tax Amount |
|---|---|---|
| $25,000 | 4.95% | $1,238 |
| $50,000 | 4.95% | $2,475 |
| $75,000 | 4.95% | $3,713 |
| $100,000 | 4.95% | $4,950 |
| $150,000 | 4.95% | $7,425 |
| $200,000 | 4.95% | $9,900 |
| $500,000 | 4.95% | $24,750 |
| $1,000,000 | 4.95% | $49,500 |
The flat rate means high earners pay a lower effective state rate than they might in a steeply progressive state.
Illinois Personal Exemption
Illinois’s personal exemption is inflation-adjusted annually. Confirm the exact current-year amount with the Illinois Department of Revenue before relying on a specific figure — this site’s sources gave slightly different figures in different places, and the amount should be verified directly rather than assumed.
| Filing Status | Exemption Amount (confirm current figure) |
|---|---|
| Single | Confirm current amount (recently in the roughly $2,600-$2,800 range) |
| Married (each spouse) | Confirm current amount |
| Each dependent | Confirm current amount |
Illinois Tax Calculation Example (Illustrative)
Single filer earning $75,000:
- Gross income: $75,000
- Personal exemption: confirm current amount (illustrative: ~$2,750)
- Taxable income: ~$72,250
- Tax rate: × 4.95%
- Tax owed: ~$3,576 (illustrative)
Illinois vs. Neighboring States
| State | Rate (confirm current figures) | Type |
|---|---|---|
| Illinois | 4.95% | Flat |
| Iowa | 3.8% (flat, transition complete as of 2025) | Flat |
| Wisconsin | Up to 7.65% | Progressive |
| Indiana | 2.95% (2026, state only) + county tax | Flat |
| Missouri | Confirm current top rate | Progressive |
| Kentucky | 3.5% (2026, cut from 4.0%) | Flat |
Indiana and Iowa both have lower flat state rates than Illinois; Wisconsin has a higher top rate for high earners.
Illinois Retirement Income
Illinois is very tax-friendly for retirees:
| Income Source | Illinois Tax |
|---|---|
| Social Security | Not taxed |
| 401(k)/403(b) withdrawals | Not taxed |
| Traditional IRA | Not taxed |
| Pension (public & private) | Not taxed |
| Roth distributions | Not taxed |
| Investment income | Taxed at 4.95% |
Illinois is one of the few states that completely exempts retirement account and pension distributions from state tax.
Illinois Property Tax
While income tax is moderate, property taxes are among the highest in the nation. Confirm the current average effective property tax rate and national ranking with the Tax Foundation or Illinois Department of Revenue — this guide previously cited inconsistent figures across different pages on this site and the exact current rate should be verified directly rather than assumed.
Illinois Sales Tax
| Rate Type | Amount |
|---|---|
| State sales tax | 6.25% |
| Local additions | Confirm current range |
| Chicago total (confirm current rate) | Historically among the highest combined rates in the nation |
Who Must File Illinois Taxes?
You must file if:
- Illinois resident with a federal filing requirement
- Part-year resident with Illinois income
- Nonresident with Illinois source income
There is no separate Illinois-specific filing threshold in most cases — if you file federal, you likely need to file Illinois.
Illinois Tax Credits
| Credit | Amount (confirm current figures) |
|---|---|
| Property Tax Credit | A percentage of property taxes paid — confirm current percentage |
| Earned Income Credit | A percentage of the federal EITC — confirm current percentage |
| Education Expense Credit | A percentage of qualifying K-12 expenses, up to a cap — confirm current figures |
| Angel Investment Credit | A percentage of qualifying investment — confirm current percentage |
Illinois Standard Deduction
Illinois does not have a standard deduction. You start with federal AGI and subtract the personal exemption.
| Step | Amount |
|---|---|
| Federal AGI | Your federal adjusted gross income |
| Minus: Personal exemptions | Confirm current per-person amount |
| Equals: Illinois taxable income | What you pay 4.95% on |
Illinois Tax Brackets Comparison
How Illinois compares to progressive states — confirm current figures for each state before relying on a specific comparison, as several states’ rates changed for 2026:
| State | Tax on $100K (confirm current figures) |
|---|---|
| California | Confirm current figure (California’s brackets are inflation-indexed annually) |
| New York | Confirm current figure |
| Illinois | ~$4,950 (flat 4.95%, before exemption) |
| Pennsylvania | ~$3,070 (flat 3.07%) |
| Texas | $0 |
Illinois Tax on High Earners
Illinois’s flat rate structure generally benefits high earners relative to steeply progressive states like California, New York, and New Jersey, where marginal rates climb well above 4.95% at high income levels. Confirm current comparison figures for each state rather than relying on a fixed historical table, since several of these states adjust brackets annually.
Illinois Filing Options
| Method | Cost |
|---|---|
| MyTax Illinois | Free (state e-file) |
| Commercial software | Confirm current cost range |
| Tax professional | Confirm current cost range |
Filing deadline: April 15
Illinois Tax Strategies
1. Maximize Retirement Contributions
Reduce federal AGI (which is the starting point for Illinois tax).
2. Property Tax Credit
Always claim if you own your home — it’s automatic in most tax software but often missed on paper returns.
3. Education Credit
Save receipts for K-12 educational expenses.
4. Time Income (Flat Rate Benefit)
No bracket creep in Illinois — lumpy income isn’t penalized by moving into a higher bracket.
Illinois Business Taxes
| Tax | Rate (confirm current figures) |
|---|---|
| Corporate income tax | Confirm current rate |
| Corporate replacement tax | Confirm current rate |
| S-Corp/LLC (pass-through) | 4.95% (personal rate) |
Is Illinois a High-Tax State?
Mixed picture overall:
- Income tax: 4.95% (moderate, and favorable for high earners due to the flat structure)
- Property tax: Among the highest in the nation (confirm current rate)
- Sales tax: Can be high in combined local rates, especially in Chicago
Tax-friendly for:
- Retirees (no retirement income tax)
- High earners (flat rate can be better than steeply progressive states)
- Those who rent (avoid property tax)
Bottom Line
Illinois has a flat 4.95% income tax — simple and often favorable for high earners compared to steeply progressive states. However, property taxes are among the highest in the nation, and sales taxes can be high in combined local rates. The bright spot is retirement income — Illinois exempts Social Security, pensions, and 401(k)/IRA withdrawals entirely, making it attractive for retirees despite other high taxes.
For a side-by-side comparison of every state’s income tax rates, see state income tax rates by state 2026 and best and worst states for taxes 2026. Federal income tax applies on top of state taxes — see 2026 federal income tax brackets to calculate your combined liability.
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