Find out how much Illinois state income tax you owe By using state of illinois income tax calculator — instantly. Works for single filers, married couples filing jointly, and filers with dependents. Free and updated for 2026.
What Is Illinois State Income Tax?
When you earn money in Illinois — from a job, a business, or investments — the state takes a small piece of it. This is called state income tax.
Think of it like this: imagine you earned $100 doing yard work. Illinois says, “We need $4.95 of that to help pay for roads, schools, and public services.” That’s it. Simple.
Illinois makes this especially easy to understand because every single person pays the same rate — it does not matter if you earn $20,000 a year or $200,000 a year. Everyone pays 4.95% and nothing more.
This is called a flat tax — one number, for everyone, always.
The Illinois Income Tax Rate — 2026
| What |
Rate |
| Illinois State Income Tax |
4.95% |
| Local / City Income Tax |
None |
| Standard Deduction |
None (Illinois uses exemptions instead) |
Illinois has charged this exact 4.95% rate since July 1, 2017, when Governor Bruce Rauner signed Public Act 100-0022 into law. Before that, the rate was 3.75%. Before that, it was temporarily raised to 5% back in 2011.
The rate cannot easily be changed to a higher-earner system. The Illinois Constitution (Article IX) says that income must be taxed at one uniform rate for everyone. In November 2020, Illinois held a vote to allow a graduated (tiered) tax — voters said no. So 4.95% it stays, for now.
Personal Exemptions — Your “Free Pass” Amount
Before Illinois calculates your tax, it gives you a personal exemption — a chunk of your income that is completely tax-free.
For 2026, here are the exemption amounts:
| Who |
Exemption Amount |
| You (the taxpayer) |
$2,925 |
| Your spouse (if filing jointly) |
$2,925 |
| Each dependent child or relative |
$2,925 |
| Additional if you are 65+ or legally blind |
$1,000 extra |
Important rule: If your income is above $250,000 (single) or $500,000 (married filing jointly), you cannot claim a personal exemption.
How Illinois Income Tax Is Calculated
Illinois keeps the formula short and clean. Here it is:
The Formula
(Adjusted Gross Income − Total Exemptions) × 4.95% = Illinois Tax Owed
That’s it. Three steps:
- Start with your income (called AGI — Adjusted Gross Income from your federal return)
- Subtract your exemptions
- Multiply what’s left by 4.95%
Formula Examples — Single, Joint, and With Dependents
Example 1: Single Filer
Emma is single, has no dependents, and earns $55,000/year.
| Step |
Amount |
| Adjusted Gross Income (AGI) |
$55,000 |
| Minus personal exemption (1 person) |
− $2,925 |
| Illinois Taxable Income |
$52,075 |
| × 4.95% |
× 0.0495 |
| Illinois Tax Owed |
$2,578 |
Emma pays about $215/month in Illinois state income tax.
Example 2: Married Filing Jointly (No Children)
Jake and Sara are married, file together, and their combined income is $90,000/year.
| Step |
Amount |
| Combined AGI |
$90,000 |
| Minus exemptions (2 people × $2,925) |
− $5,850 |
| Illinois Taxable Income |
$84,150 |
| × 4.95% |
× 0.0495 |
| Illinois Tax Owed |
$4,165 |
They pay about $347/month in Illinois state income tax — split between two people, that’s $174 each.
Example 3: Married Filing Jointly With 2 Dependents
The Rodriguez family — two parents and two kids — earns $90,000/year.
| Step |
Amount |
| Combined AGI |
$90,000 |
| Minus exemptions (4 people × $2,925) |
− $11,700 |
| Illinois Taxable Income |
$78,300 |
| × 4.95% |
× 0.0495 |
| Illinois Tax Owed |
$3,876 |
Because they have two kids, they save $289 more per year compared to Jake and Sara — that is the value of claiming dependents.
Quick Comparison Table
| Situation |
Income |
Exemptions |
Taxable Income |
Tax Owed |
| Single, no dependents |
$55,000 |
$2,925 |
$52,075 |
$2,578 |
| Married, no kids |
$90,000 |
$5,850 |
$84,150 |
$4,165 |
| Married, 2 kids |
$90,000 |
$11,700 |
$78,300 |
$3,876 |
| Married, 4 kids |
$90,000 |
$17,550 |
$72,450 |
$3,586 |
Every dependent you can claim saves you about $145 per year in Illinois state taxes ($2,925 × 4.95%).
What Counts as Income in Illinois?
Illinois taxes most types of income at 4.95%. Here is what is taxed and what is not:
Taxable (You Pay 4.95% On These)
- Wages and salaries from a job
- Self-employment and freelance income
- Rental income
- Investment income (dividends, interest, capital gains)
- Lottery winnings
- Unemployment compensation
Not Taxed in Illinois (You Pay $0 On These)
- Social Security benefits
- Pension and retirement plan distributions (401k, IRA, military retirement)
- Illinois state and U.S. government bond interest
- Workers’ compensation
Illinois is one of the most retirement-friendly states in the country because pension income is completely exempt from state tax.
Illinois State Tax vs. Federal Income Tax — What’s the Difference?
Many people confuse state income tax with federal income tax. They are completely separate.
|
Illinois State Tax |
Federal Income Tax |
| Who collects it |
Illinois government |
U.S. federal government |
| Rate |
Flat 4.95% for everyone |
Brackets from 10% to 37% |
| Your form |
IL-1040 |
Form 1040 |
| Where money goes |
Illinois roads, schools, pensions |
National defense, Medicare, etc. |
| Standard deduction |
None (uses exemptions) |
$16,100 (single, 2026) |
You file both separately. Your Illinois state tax return is due April 15, the same day as your federal return.
Does Illinois Have a Local Income Tax?
No. Unlike cities in Pennsylvania, Ohio, or Maryland, cities in Illinois — including Chicago — do not charge a local income tax on wages. You only pay the 4.95% state rate. No city tax on top of that.
How Does Illinois Collect This Tax?
Illinois collects state income tax in two main ways:
Withholding (W-2 Employees): Your employer automatically takes Illinois tax out of every paycheck and sends it to the state. At the end of the year, you file Form IL-1040 to settle up — if too much was taken out, you get a refund. If not enough was taken out, you pay the difference.
Estimated Quarterly Payments (Self-Employed): If you work for yourself, no one withholds for you. You are responsible for paying estimated taxes four times a year — in April, June, September, and January — to avoid penalties.
Frequently Asked Questions
What is the Illinois state income tax rate for 2026?
Illinois charges a flat income tax rate of 4.95% on all taxable income for 2026. Every resident pays the same rate regardless of how much they earn. This rate has been in place since July 1, 2017 under Public Act 100-0022.
Does Illinois have a standard deduction?
No. Illinois does not have a standard deduction like the federal system. Instead, Illinois offers personal exemptions — $2,925 per person for 2026. You can claim one exemption for yourself, one for your spouse, and one for each dependent.
What is the Illinois personal exemption for 2026?
The personal exemption is $2,925 per person for 2026, up from $2,850 in 2025. This amount is adjusted each year for cost of living. You subtract this from your income before calculating your Illinois tax.
Can I claim an exemption for my child?
Yes. You can claim a $2,925 exemption for each qualifying dependent — a child, a parent you support, or another qualifying relative — as long as their income is below $2,925. Each dependent reduces the income that gets taxed.
Does Illinois tax Social Security?
No. Illinois does not tax Social Security benefits at all. Retirement income from pensions, 401(k) plans, IRAs, and military retirement is also completely exempt from Illinois state income tax. This makes Illinois one of the most tax-friendly states for retirees.
Does Illinois tax capital gains?
Yes. Illinois taxes capital gains (profit from selling stocks, real estate, or other investments) at the same flat 4.95% rate as regular income. Illinois does not offer the lower federal rates (0%, 15%, 20%) for long-term capital gains.
Why does everyone in Illinois pay the same tax rate?
The Illinois Constitution (Article IX, Section 3) requires that income tax be applied at a uniform rate for everyone. This makes a graduated (higher-earner pays more) system illegal without a constitutional amendment. Illinois voters rejected a change to a graduated system in a November 2020 referendum.
When did Illinois start charging 4.95%?
The current 4.95% flat rate took effect on July 1, 2017 under Public Act 100-0022, signed during Governor Bruce Rauner’s administration. Illinois has had a state income tax since 1969, when the original Illinois Income Tax Act (35 ILCS 5) was passed.
Is there a local income tax in Chicago or other Illinois cities?
No. Illinois cities, including Chicago, do not impose a local income tax on wages or salaries. You only pay the 4.95% state rate — no city or county income tax on top of that.
What Illinois form do I use to file my state taxes?
You file Form IL-1040 (Individual Income Tax Return) with the Illinois Department of Revenue. The form starts with your federal Adjusted Gross Income (AGI) and then applies Illinois-specific adjustments and exemptions. The filing deadline is April 15 each year.
What if I live in Iowa, Wisconsin, Kentucky, or Michigan but work in Illinois?
Illinois has reciprocal tax agreements with Iowa, Kentucky, Michigan, and Wisconsin. If you live in one of these states and work in Illinois, your Illinois wages are exempt from Illinois state income tax. You pay income tax only to your home state. File Form IL-W-5-NR with your Illinois employer to claim this exemption.
What happens if I don’t file my Illinois state taxes?
If you fail to file or underpay Illinois taxes, the Illinois Department of Revenue can charge penalties and interest. The late filing penalty is 2% of the tax owed per month, up to 25% maximum. You can file for an extension (to October 15) but you must still pay any tax owed by April 15 to avoid interest charges.
Can I file Illinois state taxes online for free?
Yes. Illinois offers MyTax Illinois at mytax.illinois.gov, a free online filing system for state returns. Residents who qualify can also use IRS Free File partners, which often include free state return filing for lower-income filers.
Official Resources & References
- Illinois Department of Revenue — IL-1040 Individual Income Tax Return: tax.illinois.gov/individuals/individual-income-tax.html Official filing page, current tax rates, forms, and instructions from the Illinois Department of Revenue.
- Illinois Department of Revenue — FY 2026-15 (What’s New for 2026): tax.illinois.gov/research/publications/bulletins/fy-2026-15.html Official IDOR bulletin confirming the 2026 personal exemption increase to $2,925 and other changes.
- Illinois General Assembly — 35 ILCS 5/ Illinois Income Tax Act: ilga.gov/legislation/ilcs/ilcs5.asp?ActID=577 The full legal text of the Illinois Income Tax Act — the law that authorizes the 4.95% rate and personal exemptions.
- Illinois General Assembly — Public Act 100-0022 (4.95% Rate Enacted July 2017): ilga.gov/legislation/publicacts/fulltext.asp?Name=100-0022 The specific law that set the current 4.95% flat rate, effective July 1, 2017. Proof that the rate is legislatively established.
- Illinois Comptroller — 2026 State Income Tax Exemption Notice: illinoiscomptroller.gov/state-agencies/bulletins-forms/payroll-bulletins/illinois-state-income-tax-exemptions-2026 Official confirmation of the $2,925 personal exemption for 2026, used for payroll withholding statewide.
- MyTax Illinois — Free Online Filing Portal: mytax.illinois.gov File your Illinois state income tax return, make payments, and manage your account directly with the IDOR.
- IRS — Adjusted Gross Income (AGI) Explained: irs.gov/e-file-providers/definition-of-adjusted-gross-income Illinois income tax starts from your federal AGI — this IRS page explains exactly what that number is and how to find it.
Related Calculators
- Illinois Paycheck Calculator — See exactly how much Illinois state tax, federal tax, and FICA come out of each paycheck. Enter your hourly rate or salary and pay frequency for a full paycheck breakdown.
- Illinois Sales Tax Calculator — Calculate sales tax on purchases anywhere in Illinois, including Chicago’s category-specific rates for groceries (2.25%), medicine (1%), restaurants (10.75%), and general merchandise (10.25%).
- Illinois Maintenance (Alimony) Calculator — Estimate spousal support payments using Illinois’s statutory formula under 750 ILCS 5/504, including duration based on marriage length.
Tax rates and exemption amounts are verified for 2026 and sourced from the Illinois Department of Revenue, the Illinois General Assembly, and the Illinois Comptroller’s Office. This calculator is for estimation purposes only. For tax advice specific to your situation, consult a licensed CPA or tax professional.
