How Illinois Income Tax Works
Illinois uses a flat income tax rate of 4.95% for 2026. Every dollar of taxable income above the standard deduction is taxed at the same state rate. Federal income tax still uses the seven-bracket 10%–37% progressive system on top of state.
Illinois exempts retirement income — Social Security, pensions, and IRA/401(k) distributions — from state income tax, a relatively rare combination.
Illinois Job Market & Income Context
Finance and trading (CME Group), manufacturing, and agriculture; Chicago is the country's third-largest metro and a major freight hub.
How Illinois Income Tax Compares to Neighboring States
Total income tax (federal + state) on a $100,000 annual salary in 2026, single filer using the standard deduction:
| State | State Tax | Total Income Tax | vs. Illinois |
|---|---|---|---|
| Illinois (here) | $4,809 | $17,979 | — |
| Wisconsin | $4,148 | $17,318 | -$661 |
| Iowa | $3,800 | $16,970 | -$1,009 |
| Missouri | $3,819 | $16,989 | -$990 |
| Kentucky | $3,386 | $16,556 | -$1,423 |
| Indiana | $2,921 | $16,091 | -$1,888 |
A negative "vs." figure means that state collects less total income tax than Illinois. Federal portion is identical across states; only state tax varies.
Frequently Asked Questions
What is the Illinois state income tax rate for 2026?
Illinois has a flat 4.95% state income tax rate for 2026. The rate is the same regardless of income — applied to your taxable income after the standard deduction. Federal rates (10%–37%) layer on top.
How much income tax will I pay in Illinois on a $100,000 salary?
For a single filer earning $100,000 in Illinois in 2026, expect approximately $13,170 in federal income tax and $4,809 in Illinois state income tax — for a total income tax of about $17,979, an effective rate of 18%. This excludes FICA (Social Security and Medicare), which adds roughly 7.65% on top.
What's the difference between effective and marginal tax rate?
Your marginal rate is the rate applied to your last dollar of taxable income — the bracket your top dollar lands in. Your effective rate is your total income tax divided by your total income — the average rate across everything you earned. Effective is always lower than marginal because lower brackets cover the first portions of your income at lower rates.
Does Illinois tax retirement income, Social Security, or capital gains?
Federal rules: long-term capital gains use preferential rates (0%, 15%, 20%) — see our Capital Gains Tax Calculator. Social Security is taxable federally if your combined income exceeds certain thresholds. Illinois's treatment of retirement income, Social Security, and capital gains varies — many states fully or partially exempt Social Security, and some provide pension exclusions. Consult Illinois's Department of Revenue for specifics.
How is this Illinois income tax estimate calculated?
We apply the 2026 federal IRS tax tables (10%–37% across seven brackets) and Illinois's 2026 state tax schedule to your taxable income (gross income minus the standard deduction). The calculator handles wages, self-employment income (with SE tax and the deductible half), and other income; you can also switch to itemized deductions. Tax credits, AMT, and preferential capital gains rates are not modeled — this is an estimate of ordinary income tax only.