This tool is freely available and is designed to help you accurately estimate your 2024 tax return. The general merchandise sales tax applies to almost all other products purchased for use in Illinois. However most areas have additional local taxes between 1% and 4.75%. The highest combined sales tax in Illinois is 10.75% which belongs to the cities of Berwyn and Cicero. Qualified education expenses over $250 are eligible for a tax credit. All 32 states with a progressive income tax also tax some form of retirement income, including Connecticut, the last state to enact a progressive income tax.

This system will only be available until 2026, by which time the law requires the certification of a new system. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. Illinois has a flat state income tax rate of 4.95%, meaning all taxpayers in Illinois pay the same. FICA taxes consist of Social Security tax (flat rate of 6.2% ) and Medicare tax (flat rate of 1.45%).

Illinois Tax Rates, Collections, and Burdens

For married individuals over 65 (or legally blind) that filed tax returns jointly, you’re allowed an additional $1,000. The amendment also grants lawmakers the ability to tax retirement income at a different rate than regular income, which could allow for rates to rise over time illinois income tax rate so the hikes generate less unified public opposition. The property tax credit is equal to 5% of the Illinois property tax paid on your primary residence. You can’t claim this credit if your federal AGI exceeds $250,000, or $500,000 if you’re married and file a joint return.

And Missouri has effectively exempted social security payments from taxation. The Illinois marginal tax rate used in our example calculation above on this page is 4.95%. That is the tax rate applied to each additional dollar of taxable income you earn.

Education Expense Credit

More recently, individual income tax levels have been volatile due to COVID and inflation. Census is for FY2021, we can use data from the Illinois Comptroller for FY2022 & FY2023. In FY2023, individual income taxes as a percentage of GSP decrease; will this be the trend nationally? Historically, the State and the national average have moved in tandem. Additionally, a number of states have decreased income tax rates due to the increased revenue they have been receiving. The State distributes a percentage of income taxes through the Local Government Distributive Fund (LGDF).

• Illinois’ corporate income tax  collections are clearly above average, partially due to Illinois’ high corporate income tax rate (7% corporate income tax rate plus the 2.5% personal property replacement tax rate).
• While we take all precautions to ensure that the data on this site is correct and up-to-date, we cannot be held liable for the accuracy of the tax data we present.
• In addition, the wage base has also been increased to $52,800, up from $50,900.
• Seventy two counties receive amounts below the state average.
• A big reason for this disparity is the popularity of pass-through entities, which are taxed on the individual level.
• All other rates remain unchanged, including the top marginal rate.

While the amount of income received but not taxed under this exemption grew by almost 60% during this time period, the income tax base grew by less than 20%. However, almost all of the growth in the tax base occurred in 2021, while the size of the retirement exemption remained flat in 2021. As with overall collections, time will tell if this is a shift in the trend, or an anomaly. Colorado citizens voted down Proposition HH in November 2023, prompting the governor to call a special legislative session to address the impending statewide increases in property taxes. That session yielded SB23B-001, which reduces the assessment on residential property from 6.765 percent to 6.7 percent and increases the exemption on a home’s value from $15,000 to $55,000.

What is Illinois’s marginal tax rate?

The Equal Pay Act prohibits employers with four or more employees from paying unequal wages to men and women for doing the same or substantially similar work. The state of Illinois collects 39.2 cents for every gallon of regular gasoline. The diesel tax rate is also quite high at 46.7 cents per gallon.

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