Illinois State Taxes
Quick Tax Facts
- Income Tax: 4.95%
- State Sales Tax: 6.25%
- Median Property Tax: $3,507
Illinois may seem like a great place to live with its flat income tax rate, but it’s actually considered the least tax-friendly for middle-class families and retirees. Residents pay some of the highest combined state and local tax rates in America. On top of high gas taxes, the state also levies the second-highest property taxes in the nation.
Illinois Income Tax
Illinois is one of a handful of states that has a flat income tax rate. The current rate is 4.95%, but there are rumblings that the legislation may attempt to change it to a graduated income tax rate moving forward. Governor J.B. Pritzker tried to do just that in 2020, leaving it up to voters to pass a constitutional amendment, but it failed to pass.
Who Must File?
If you are an Illinois resident, you must file an income tax return (Form IL-1040) if you are required to file a federal income tax return, or you are not required to file a federal return but your Illinois base income from Line 9 is greater than your Illinois exemption allowance.
Due to reciprocal agreements, residents who worked in Iowa, Kentucky, Michigan, or Wisconsin must also file and include any income earned in these states.
Part-Year & Non-Residents
Part-year residents must file a return and Schedule NR if any of the following are true:
- You earned income from any source while residing in Illinois,
- While living outside of the state, you earned income from an Illinois source, or
- You want a refund of any Illinois income tax withheld.
Non-residents must also file Schedule NR if they earned enough income through Illinois sources to have a tax liability.
Illinois Sales Tax
Illinois has two rate structures for its sales and use tax. General merchandise is taxed at 6.25% and 1% is levied on foods, drugs, and medical appliances. The sales tax rate may be different in various locations because local jurisdictions are allowed to impose their own sales taxes, too. Local rates are subject to change on January 1 and July 1 of each year.
The average combined sales tax rate (local, county, and state) in Illinois is 8.82%. Several cities, including Harwood Heights and Matteson, have combined sales tax rates of 10% or higher.
Illinois Property Taxes
Illinois levies property taxes at the county level. All counties, excluding Cook, assess a property’s value every four years. In Cook County, it is done every three years. This can be problematic in years when the real estate market declines because residents will be taxed on outdated, higher property values.
The median property tax in Illinois is $3,507 annually. Lake County has the highest property tax at an average of $6,285. The lowest amount is $447 in Hardin County.
Illinois Tax Holidays
There are no tax holidays scheduled in Illinois at this time.
Illinois Tax Resources
If you need assistance preparing your Illinois state taxes, you can speak with a tax professional from Tax Defense Network by calling 855-476-6920.
You can also visit the Illinois Department of Revenue website for additional resources.