About Illinois State Income Tax

Illinois uses a flat tax system, meaning everyone pays the same tax rate regardless of income level. The current Illinois state income tax rate is 4.95%, which was increased from 3.75% in 2017.

Illinois Tax Features

• Flat Tax Rate: 4.95% on all taxable income
• No Brackets: Unlike most states, Illinois doesn't have progressive tax brackets
• Simplicity: Easy to calculate - just multiply income by 4.95%
• Standard Exemption: Illinois offers a personal exemption of $2,425 per person (2026)

How Illinois Tax is Calculated

Illinois state tax calculation is straightforward:

1. Determine your total taxable income
2. Subtract any eligible exemptions ($2,425 per person)
3. Multiply by 4.95% to get your Illinois state tax
4. Add federal tax based on your filing status and income bracket

Illinois vs. Other States

Illinois is one of only a handful of states with a flat income tax. While this makes tax filing simpler, Illinois residents generally pay higher overall taxes compared to neighboring states like Indiana (3.23% flat rate) or states with no income tax like Texas and Florida.

Frequently Asked Questions

Why does Illinois have a flat tax?

The Illinois Constitution requires a flat income tax rate. In 2020, voters rejected a constitutional amendment that would have allowed a progressive tax system. This means all taxpayers pay the same percentage regardless of income.

What is Illinois' current tax rate?

Illinois' current flat income tax rate is 4.95% as of 2026. This rate has been in effect since 2017.

Are there any deductions or exemptions in Illinois?

Yes, Illinois offers a personal exemption of $2,425 per person (2026). There are also various tax credits available, including the Earned Income Tax Credit, Property Tax Credit, and Education Expense Credit.

How does Illinois tax compare to neighboring states?

Illinois (4.95%) has a higher flat rate than Indiana (3.23%) but lower than Iowa's top bracket (6%). Wisconsin uses a progressive system with rates up to 7.65%. Missouri has rates from 2% to 4.95%.

Tips for Illinois Taxpayers

• Maximize your personal exemption claims
• Look into available tax credits to reduce your liability
• Consider retirement account contributions to reduce taxable income
• Keep track of property tax payments for potential credits
• File electronically for faster refunds