Illinois’s tax system ranks 36th overall on our 2023 State Business Tax Climate Index. Property taxes vary by municipality, but northeastern Illinois — including Chicago — has significantly higher property taxes than the rest of the state. Lake County has the highest median property taxes paid at $8,040 according to 2021 data from the Tax Foundation, illinois income tax rate while Pulaski County near the Kentucky border has the lowest at $647. Most homeowners qualify for the general homestead exemption, which lowers your home’s equalized assessed value, or its partial value used when calculating your property taxes. Other exemptions include the senior citizens homestead exemption — more information is available below.
The state income tax rates are 4.95%, and the sales tax rate is 1% for qualifying food drugs and medical appliances and 6.25% on general merchandise. Illinois has a flat income tax rate which applies to both single and joint filers. The Federal Income Tax, in contrast to the Illinois income tax, has multiple tax brackets with varied bracket width for single or joint filers. The federal Tax Cuts and Jobs Act of 2017 (TCJA) increased the standard deduction (set at $12,950 for single filers and $25,900 for joint filers in 2022) while suspending the personal exemption by reducing it to $0 through 2025. While federal tax rates apply to every taxpayer, state income tax rates vary by state.
Illinois State Income Tax: Rates and Who Pays in 2023
Overall, the majority of Americans should see some tax relief with larger paychecks through 2024 which should help with affording the elevated cost of everyday expenses. It remains to be seen how much inflation will cool in 2024, which will dictate tax bracket adjustments for 2025. Five states in the top third forgo taxes on wage income (Florida, South Dakota, Tennessee, and Texas, as well as Washington, which taxes capital gains income but not wage income). Even the highest top marginal https://www.bookstime.com/ rate in that cohort—Maine’s 7.15 percent—is still lower than the average top rate in the bottom third of states, and lower than many of its Northeastern U.S. peers. The standard deduction, which Illinois does not have, is a deduction that is available by default to all taxpayers who do not instead choose to file an itemized deduction. Inflation-adjusted bracket widths for 2022 were not available as of publication, so table reflects 2021 inflation-adjusted bracket widths.
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- In Illinois, there are currently six tax brackets, with each bracket corresponding to a different tax rate.
- This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research.
- Illinois offers a homestead exemption up to a maximum of $10,000 in Cook County and $6,000 in all other counties.
- The only exception is railroad unemployment.More information is on the Illinois Department of Revenue’s website.
Remember that Illinois may have very different deduction laws from the Federal Income Tax, so you may have to write a whole new list of deductions for your Illinois income tax return. You can use the income tax estimator to the left to calculate your approximate Illinois and Federal income tax based on the most recent tax brackets. Most military pay, including retired pay, is not taxed in Illinois. There are a few exceptions, including military pay you received as a civilian.
Top 10 Homeowner Tax Deductions for Maximum Savings
The maximum tax credit per qualifying child is $2,000 for children under 17. For the refundable portion of the credit (or the additional child tax credit), you may receive up to $1,600 per qualifying child. 50, which increased the standard deduction for single filers from $3,000 to $3,500.
Any taxable income exceeding $25 million is subject to the top marginal rate of 10.9 percent. In 2022, the tax rate for nearly every low- and middle-income earner was reduced as legislators voted to collapse the two lower tax tables into one. (aa) Maine’s personal exemption begins to phase out for taxpayers with income exceeding $279,500 (single filers) or $335,400 (MFJ) (2021 inflation adjustments). The dependent personal exemption is structured as a tax credit and begins to phase out for taxpayers with income exceeding $200,000 (head of household) or $400,000 (married filing jointly).
Illinois State Income Tax Credits
Long-term capital gains are taxed using different brackets and rates than ordinary income. Still need to prepare and file an IL return for a previous Tax Year? You can complete and sign the forms here on eFile.com before you mail them to the Illinois Department of Taxation. Another story from the industry data that is less apparent in Census population data is regional competition, even among comparatively high-tax states.