Illinois Salary Calculator 2026 — Free Take-Home Pay Estimator

Illinois Income Tax Summary

Illinois has a flat income tax rate of 4.95% on all individual income. The state taxes most forms of income, including retirement income, which makes it less tax-friendly for retirees. Illinois also has relatively high property taxes. The state's flat tax system is straightforward but offers limited deductions. [Source: Illinois Department of Revenue, 2026]

Illinois Income Tax Rules

• Flat income tax rate of 4.95% on all taxable income [Source: Illinois Department of Revenue, 2026]
• Standard deduction: none (Illinois does not allow a standard deduction) [Source: Illinois Department of Revenue, 2026]
• Personal exemption: $2,775 per exemption (phaseouts apply)
• All income types are taxable: wages, salaries, tips, interest, dividends, capital gains
• Social Security benefits are not taxed at the state level
• Retirement income from pensions and IRA distributions is taxable (except for qualifying government pensions)
• No deduction for federal income tax paid

Illinois Payroll & Withholding Rules

Employers must withhold Illinois income tax at the flat 4.95% rate. Unemployment insurance tax is employer-paid only with no employee portion. There are no mandatory local income taxes statewide, but the City of Chicago has its own taxes. Cook County also has unique tax provisions.

Local Taxes in Illinois

Illinois does not have county or city income taxes on individuals. However, the City of Chicago imposes a personal property replacement income tax on certain entities. Local governments rely heavily on property taxes, which are among the highest in the nation.

Cost of Living Context

Illinois's cost of living is about 8% below the national average outside of Chicago. Housing costs in Chicago are moderate for a major city but above state averages. Property taxes are very high. Transportation and utilities are near average. Overall, Illinois offers affordable living outside of the Chicago metro area. [Source: Illinois Department of Revenue, 2026]

Real-World Example: Illinois

For a single filer earning $55,000/year in Chicago, Illinois:

• Federal taxable income: ~$40,400 (after $14,600 standard deduction)
• Illinois state tax: ~$2,590 (using 2026 brackets)
• Estimated take-home: ~$3,983/month (pre-FICA, pre-insurance)

Note: Actual results vary based on deductions, credits, and local taxes.

Illinois FAQs

Q: What is the Illinois income tax rate? [Source: Illinois Department of Revenue, 2026] A: Illinois has a flat income tax rate of 4.95% on all taxable income. [Source: Illinois Department of Revenue, 2026]

Q: Does Illinois tax Social Security benefits? A: No, Social Security benefits are not taxed in Illinois.

Q: Does Illinois tax retirement income? A: Yes, most retirement income including IRA and 401(k) distributions is taxable, though some government pensions are exempt.

Q: Does Illinois have a standard deduction? [Source: Illinois Department of Revenue, 2026] A: No, Illinois does not allow a standard deduction on state returns. [Source: Illinois Department of Revenue, 2026]

Q: Does Illinois have a state sales tax? A: Yes, Illinois has a state sales tax rate of 6.25%, with local additions. [Source: Illinois Department of Revenue, 2026]

Q: Are capital gains taxed in Illinois? A: Yes, capital gains are taxed as ordinary income at the flat 4.95% rate.

Q: Does Chicago have a city income tax? A: No, Chicago does not impose a city income tax on individuals.