Illinois Income Tax Calculator IL Tax Rates 2024

If you have more than one job, you’ll need to split your allowances between your jobs. You can’t claim the same allowances with more than one employer in a single tax year. An alternative is to divide your allowances between the two jobs on the Form IL-W-4 you give to each employer, or you could claim all your allowances with one job and none with the other. If you double-claim allowances while holding more than one job, you’ll owe more money at tax time.

Filing and payment requirements

Recent policy changes in Illinois have had a significant impact on state income tax rates. In 2021, Illinois passed a bill that increased the state’s flat income tax rate from 4.95% to 4.99%. This slight increase was part of the state’s effort to generate more revenue to support various programs and services.

• Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product.
• A person that is an affiliate of a marketplace facilitator is not a marketplace seller.
• For example, there is a use tax for out-of-state purchases used within the state.
• Among these are tax credits, which are designed to reduce a taxpayer’s tax bill by some amount.

Calculate your income tax in Illinois

While most states use a marginal bracketed income tax system similar to the federal income tax, every state has a completely unique income tax code. Forms RUT-25 and RUT-25-LSE must be filed and taxes must be How to Invoice as a Freelancer paid on the date the Illinois title and registration is applied for, but not more than 30 days after the date the item is brought into Illinois. The retailer uses its gross receipts to calculate its retailers’ occupation tax liability, and as a part of the same transaction, the retailer satisfies its statutory obligation to collect the use tax owed by the customer. In effect, this use tax collection reimburses the retailer for its retailers’ occupation tax liability. If a retailer does not collect use tax on a sale of tangible personal property to a customer who will use that property in Illinois, the customer must pay the use tax directly to the State of Illinois.

How to File Illinois State Income Tax?

You must attach a letter of explanation from your il state tax rate employer to your IL-1040. If a motor fuel distributor’s average monthly liability is $20,000 or more, quarter-monthly payments must be made. Payments are due the 7th, 15th, 22nd, and last day of the month.

Testimony: Digital Services Taxes in the European Union

However, Illinois’s flat rate is slightly higher than that of some states with similar systems. For comparison, Pennsylvania imposes a lower flat tax rate of 3.07%, and Michigan is also lower at 4.25%. Combined with the state sales tax, the highest sales tax rate in Illinois is 11.5% in the cities of Harvey, Harwood Heights, Matteson and Richton Park. In 2020, Illinois voters rejected a proposed constitutional amendment that would have allowed for a graduated income tax system.

State Individual Income Tax Rates and Brackets, 2025

As of July 2025, there have been no changes to the Illinois flat income tax rate or the lack of tax brackets. However, tax policy is always a topic of discussion in the state legislature. Some lawmakers and advocacy groups have called for a move to a progressive tax system, which would introduce tax brackets and higher rates for higher earners. If you want to compare all of the state tax rates on one page, visit the list of state income taxes. For info on 2011 federal income tax and federal tax refunds, visit the federal income tax and federal tax refund pages.

The Earned Income Tax Credit (EITC) helps low to moderate-income households. Illinois’s state income tax rate of 4.95% is unique due to its flat nature. Many states use a progressive tax rate system, increasing with higher income levels. Calculating the Illinois state income tax involves applying the flat tax rate to your taxable income. Illinois offers several tax deductions and credits that can reduce your taxable income or lower your tax liability. Below is a table of the general merchandise sales tax rates for all of the counties in Illinois.

• The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare.
• Americans may be surprised to see just how much they are taxed for renting a car.
• Not sure if your child or an other person will qualify to be a dependent on your tax return?
• While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.

There are three types of residency statuses when it comes to Illinois state tax. Here are some key tax reduction programs in Illinois, and how to qualify. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. We believe everyone should be able to make financial decisions with confidence. Understanding these brackets is crucial for effective financial planning CARES Act and ensuring compliance with state tax laws.

• Additionally, e-filing can expedite refunds, as electronic submissions are processed more quickly by the Illinois Department of Revenue.
• While this system offers simplicity and predictability, it does not provide the progressive taxation found in other states.
• As a result, Illinois’ corporate income tax rate is among the highest in the country at 9.5 percent, and its 6.45 percent rate on partnerships, S corporations, and trusts is also on the high side regionally and nationally.
• Qualifying deductions might include an itemized deduction, the Illinois standard deduction, exemptions for dependants, business expenses, etc.
• This article aims to provide a comprehensive guide to Illinois tax brackets, including current rates, the structure of taxation, and how to file taxes in the state.

For further information about changes effective January 1, 2026, please review our website for updated sales tax forms and instructions, and related bulletins and publications. You must adjust your cash register and any computer program so that beginning on January 1, 2026, you will collect and pay the correct sales tax. You need to contact your software vendor if you use software to create your forms.