How much is Illinois income tax?
Illinois income tax at 3 levels of Illinois taxable income — what is left after Illinois's own deductions and exemptions. Local income taxes are not included.
| Taxable income | Single | Married filing jointly |
|---|---|---|
| $50,000 | $2,4755.0% effective · 4.95% marginal | $2,4755.0% effective · 4.95% marginal |
| $100,000 | $4,9505.0% effective · 4.95% marginal | $4,9505.0% effective · 4.95% marginal |
| $250,000 | $12,3755.0% effective · 4.95% marginal | $12,3755.0% effective · 4.95% marginal |
What is Illinois's income tax rate for 2026?
| Taxable income | Rate |
|---|---|
| All taxable income | 4.95% |
Source: 35 ILCS 5/201 · IDOR Income Tax Rates, checked September 11, 2026.
Can you deduct Illinois income tax on your federal return?
The federal deduction for state and local taxes (SALT) is capped at $40,400 for 2026 — $20,200 if married filing separately — and the cap shrinks toward $10,000 once modified AGI passes $505,000. A single filer with $250,000 of Illinois taxable income owes about $12,375 in Illinois income tax — 31% of that cap before any property tax.
SALT cap workaroundsDoes Illinois have a pass-through entity tax (PTET)?
Yes. A partnership or S corporation can elect to pay Illinois income tax at the entity level. The business deducts it federally, so that state tax is not limited by the SALT cap, and the owners claim an Illinois credit or exclusion for it. Deductsy's plan treats March 15 as the Illinois election or first-payment deadline; it is approximate, so confirm it with Illinois before relying on it.
PTET savings calculatorWhen are Illinois estimated tax payments due?
Illinois estimated tax is due April 15, June 15, September 15 and January 15 of the following year, in 4 equal instalments. Those are the same dates as the federal schedule. Source: IL-1040-ES, Estimated Income Tax Payments for Individuals 2026 (R-09/26); 35 ILCS 5/804(c)(1)(A).
Safe-harbor calculatorWhat is the penalty for underpaying Illinois estimated tax?
Illinois charges a flat 2% of a late instalment paid within 30 days, and 10% after that. Paying at least 90% of this year's tax or 100% of last year's on time avoids it. No estimated payments are required if you expect to owe less than $1,000. Source: Illinois PUB-103, Penalties and Interest for Illinois Taxes (R-09/25); 2025 IL-2210 (R-12/25).
Are HSA contributions deductible in Illinois?
Yes. Illinois follows the federal treatment, so an HSA contribution — up to $4,400 with self-only coverage or $8,750 with family coverage for 2026 — lowers Illinois taxable income as well as federal.
Does Illinois give a tax break for 529 plan contributions?
Yes. Illinois lets you deduct up to $10,000 a year of contributions to Illinois's own 529 plan ($20,000 on a joint return). Income limits, per-beneficiary caps and carryforwards differ by state, so check the plan's rules.
529 plan tax savings calculatorWhich states have tax reciprocity with Illinois?
Illinois has mutual agreements with Iowa, Kentucky, Michigan and Wisconsin: neither state taxes the other's residents on wages earned there, so those wages are taxed only where you live. Give your employer the exemption certificate and the state you work in stops withholding.
What is the property tax rate in Illinois?
Illinois's average effective property tax rate is 2.01% — the 2nd highest of 51 jurisdictions and 2.2 times the national average of 0.9%. That is about $2,010 a year for every $100,000 of home value; the rate varies widely by county and school district.
Itemize or take the standard deduction?How much does an LLC cost to keep in Illinois each year?
Deductsy budgets about $75 a year for an Illinois LLC — the annual report fee or minimum franchise tax, with a fee due every two years counted at half. Fees change, so confirm with Illinois's business filing office.
Illinois S-corp tax calculatorHow do Illinois taxes compare with neighboring states?
| State | Top income tax rate | Income tax on $100,000 (single) | Property tax (avg) |
|---|---|---|---|
| Illinois | 4.95% | $4,950 | 2.01% |
| Indiana | 2.95% | $2,950 | 0.74% |
| Iowa | 3.8% | $3,800 | 1.39% |
| Kentucky | 3.5% | $3,500 | 0.75% |
| Missouri | 4.7% | $4,555 | 0.85% |
| Wisconsin | 7.65% | $4,696 | 1.42% |
On $100,000 of taxable income a single filer's Illinois income tax is $4,950 — more than in all 5 neighboring states. The lowest is Indiana at $2,950; the highest is Wisconsin at $4,696. Illinois's average property tax rate is higher than in all 5.
Income tax is each state's own tax on the same state taxable income; local income taxes are not included.
Tax moves that matter most for Illinois
If you own an S corporation, partnership or multi-member LLC, Illinois's PTET election moves the Illinois income tax on that profit to the business, where it is deductible federally and outside the SALT cap.
That is the 2nd highest of 51 and 2.2 times the national average, so property tax does much of the work of filling the SALT cap. Bunching two years of property tax into one can push itemized deductions past the standard deduction in alternate years.
An S-corp election can cut self-employment tax once profit is large enough to pay yourself a reasonable salary and still cover payroll and filing costs. The Illinois calculator adds Illinois's own entity fees and taxes to that breakeven.
With 1099 income, a Solo 401(k) can take up to $72,000 a year (2026) — usually more than a SEP-IRA at the same income. Contributions lower both federal and Illinois income tax.
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