Key Tax Facts: Illinois
- Flat 4.95% rate - constitutionally prohibited from using graduated rates
- Social Security, pension, and retirement income are fully exempt
- No deduction for federal income taxes paid
- Chicago and other municipalities impose additional taxes
Estimate Your 2026 Federal and Illinois State Income Tax
Illinois State Income Tax Overview
Illinois imposes a flat income tax rate of 4.95% on all net income for individuals, regardless of income level or filing status. Unlike most states, Illinois does not use graduated brackets -- every dollar of net income above the personal exemption is taxed at the same 4.95% rate whether you earn $30,000 or $300,000. Illinois does not allow a standard deduction. Instead, the state provides a personal exemption of $2,425 per return for tax year 2025 (single filers and married filing separately), $4,850 for married couples filing jointly, and $2,425 per dependent. These exemptions are modest compared to the federal standard deduction, meaning Illinois residents pay state income tax on a larger share of their income than the federal exemption alone would suggest. One of the most significant features of Illinois tax law is its broad retirement income exemption. Social Security benefits, pension income from qualified government and private pension plans, distributions from 401(k) and 403(b) plans, traditional IRA withdrawals, and military retirement pay are all fully exempt from Illinois state income tax regardless of the amount. This makes Illinois considerably more favorable for retirees than the flat rate alone implies -- a retiree living entirely on Social Security and IRA distributions pays zero Illinois state income tax. To illustrate: a single Illinois resident earning $70,000 in wages has net income after the $2,425 personal exemption of $67,575. At 4.95%, state income tax owed is approximately $3,345 -- an effective rate of about 4.78% on gross income. Illinois has a combined state and local sales tax burden that ranks among the highest in the nation. The state rate is 6.25%, but Chicago and collar county municipalities commonly add local rates pushing the combined rate to 10% or above. Property taxes in Illinois are also among the highest nationally, particularly in the Chicago metropolitan area where effective rates often exceed 2% of assessed value annually.
What Is Different About Illinois's Income Tax
Deductions and exemptions
Illinois has no standard deduction and does not allow itemized deductions. Each taxpayer and dependent receives a personal exemption of $2,775 for 2025, plus an extra $1,000 for filers 65 or older or legally blind, and the exemption is eliminated entirely for filers with adjusted gross income above $250,000 single or $500,000 joint.
Credits worth knowing
The state earned income credit is 20% of the federal credit. A property tax credit equal to 5% of Illinois property tax paid on a principal residence is available under an income cap, along with an education expense credit of up to $750 and a K-12 instructional materials credit for teachers. A child tax credit began in 2024 for families eligible for the earned income credit.
Retirement, capital gains, and other income
Illinois exempts all retirement income: Social Security, pensions, 401(k) and IRA distributions, and military retirement pay are not taxed at all, which sets the state apart from most of its neighbors. Capital gains and dividends are taxed at the 4.95% flat rate.
Rules summarized from the Illinois Department of Revenue guidance for tax year 2026. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Illinois Income Tax Rate (2026) projected
Illinois uses a flat income tax rate -- the same percentage applies to all taxable income regardless of how much you earn.
Source: Illinois Department of Revenue
What a Illinois Resident Actually Pays: A Worked Example
| Taxable Income | $65,000.00 |
| Illinois Flat Rate | 4.95% |
| Estimated State Tax | $3217.50 |
| Effective Rate | 4.95% |
Where Illinois Stands Among the 50 States
Illinois's top rate of 4.95% ranks #24 of the 41 states that tax wages. The median top rate across those 41 states is 5.2%, so Illinois is below the middle of the pack. It is one of 14 states with a single flat rate, so every taxable dollar is taxed at 4.95% and the effective rate never climbs with income the way it does in the 27 graduated-rate states.
On sales tax the picture is different: Illinois's combined state and average local rate of 8.82% ranks #8 of 50, against a national median of 7.00%.
Illinois State Tax at Five Income Levels (2026, single filer)
| Taxable income | Illinois tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $1,980 | 4.95% | 4.95% |
| $65,000 | $3,218 | 4.95% | 4.95% |
| $100,000 | $4,950 | 4.95% | 4.95% |
| $150,000 | $7,425 | 4.95% | 4.95% |
| $250,000 | $12,375 | 4.95% | 4.95% |
Brackets applied directly to the taxable-income figure shown, before Illinois-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Illinois vs. Its Neighbors on $75,000 of Taxable Income
A Illinois resident with $75,000 of taxable income pays about $3,713 in state income tax. Of Illinois's 5 neighboring states, 5 would tax that income less and 0 would tax it more -- Illinois is the most expensive state in its region on this measure.
Frequently Asked Questions -- Illinois Income Tax
Does Illinois have a state income tax?
Yes. Illinois imposes a state income tax with a flat rate of 4.95%. This is separate from your federal income tax obligation.
What is the Illinois income tax rate for 2026?
Illinois uses a flat income tax rate of 4.95% on all taxable income, regardless of income level or filing status.
Do I have to file a Illinois state tax return?
Most full-year Illinois residents with income above the state filing threshold must file a state return. Check the Illinois Department of Revenue for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2026 brackets and standard deduction. The Illinois figure applies the 2026 single-filer rate schedule to the same taxable income; it does not model Illinois-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the Illinois Department of Revenue or a tax professional before filing.
How does Illinois compare with nearby states?
On $75,000 of taxable income, Illinois collects about $3,713. Indiana collects $2,250, Iowa collects $2,850, Kentucky collects $3,000, Missouri collects $3,349, Wisconsin collects $3,579. See the comparison table above.
Where does Illinois rank on state income tax?
Illinois's top rate of 4.95% ranks #24 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 8.82% ranks #8 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2026 federal income tax using the official IRS 2026 brackets, then applies the Illinois rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official Illinois tax forms?
Official forms, instructions, and filing guidance are available at the Illinois Department of Revenue.
What is the sales tax rate in Illinois?
Illinois's combined state and average local sales tax rate is 8.82%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Illinois 2026 state taxes due?
2026 taxes are generally filed in 2027. The Illinois filing deadline is April 15, 2027, the same as the federal deadline.
Understanding Your Illinois Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Illinois state tax owed to the Illinois Department of Revenue. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Illinois Bill
Pre-tax retirement contributions reduce your federal and Illinois taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Illinois-specific credits and deductions that don't exist at the federal level are listed at the Illinois Department of Revenue -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Illinois's combined state-plus-average-local sales tax rate is 8.82%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Illinois Department of Revenue or a qualified tax professional for guidance specific to your situation.