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Illinois State Income Tax 2023 – 2024

Illinois State Income Tax is a crucial revenue source for the state, funding various public services and initiatives. However, the amount you owe is independent of your income, as Illinois employs a unique flat tax system.
Illinois State Income Tax
Illinois State Income Tax 2023 – 2024
This guide will help you determine your Illinois state income tax obligations, explore standard deductions, and identify who must pay.
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The Illinois state income tax rate for 2022-2023 is a flat 4.95%, distinguishing it from the federal government and many other states that employ progressive tax brackets. Regardless of income, all taxpayers contribute at the same percentage rate. The tax deadline for this period was April 18, 2023, aligning with the federal deadline. An automatic six-month extension is available for those unable to meet the initial deadline, but owed taxes must be paid on time to avoid penalties. 

Additionally, a noteworthy update advises individuals who paid taxes on certain state refunds or special state payments before February 10, 2023, to consider filing an amended tax return if IRS determinations render these payments nontaxable.

Join us as we navigate the intricacies of Illinois State Income Tax rates and regulations to assist you in effectively managing your tax responsibilities. Use Beem to get a quick and accurate estimate of your federal and state taxes and get the maximum refund.

Illinois State Income Tax

Does Illinois Have State Income Tax?

Illinois does have a state income tax. This tax is a crucial component of the state’s revenue system, funding essential services like education, healthcare, and infrastructure. Understanding the Illinois State Income Tax and its rates is essential for all residents and taxpayers in the state.

Illinois State Income Tax – How much will the income after tax in Illinois with Filing Status

Annual IncomeFiling Status –
Single
Filing Status –
Married Filing Jointly
Filing Status –
Head of Household
$12000$11,524$11,641$11,641
$15000$14,170$14,493$14,493
$20000$18,423$19,245$19,185
$22000$20,124$21,146$20,886
$30000$26,792$28,340$28,881
$35000$30,945$32,593$31,924
$36000$31,775$33,443$32,754
$42000$36,758$38,546$37,737
$45000$39,250$41,098$41,520
$48000$41,741$43,618$42,720
$52000$45,063$46,940$46,042
$54000$48,258$50,262$49,364
$60000$51,180$53,584$52,686
$62000$52,641$55,245$54,347
$65000$54,832$57,737$56,839
$70000$58,485$61,889$60,991
$75000$62,137$66,042$65,144
$80000$65,790$70,194$68,826
$85000$69,442$74,347$72,479
$90000$73,095$78,499$76,131
$92000$74,556$80,160$77,592
$95000$76,747$82,652$79,784
$114000$90,387$97,976$93,552
$115000$91,098$98,707$94,263
$140000$108,860$116,969$112,025
$150000$115,965$124,274$119,130
$160000$123,070$131,579$126,235
$165000$126,623$135,232$126,623
$190000$143,825$153,494$147,506
$185000$140,673$149,842$143,998
$260000$187,027$203,510$190,901
$300000$211,047$231,930$213,535
$350000$241,072$267,455$234,881
$120000$94,650$102,359$97,815
$135000$105,308$113,317$108,473
$170000$130,175$138,884$133,340
$180000$136,272$146,189$146,189
$250000$181,022$196,405$184,896
$28000$25,131$26,639$25,989
$32000$28,453$30,041$29,391
$40000$35,097$36,845$36,076
$44000$38,419$40,247$39,398
$53000$45,894$47,771$46,873
$56000$48,258$50,262$49,364
$58000$49,719$51,923$51,025

Illinois State Income Tax Rates and Tax Brackets

Illinois employs a flat-rate system for state income tax, which means everyone, regardless of income, pays the same rate. As of 2022-2023, the Illinois state income tax rate is 4.95% of your federal adjusted gross income. This flat-rate structure simplifies tax calculations but may impact lower-income individuals more significantly than those with higher incomes.

What is Illinois’ Standard Deduction?

In contrast to the federal tax system, Illinois takes a unique approach to deductions. The state doesn’t employ traditional itemized deductions or a standard deduction. Instead, Illinois offers taxpayers a specific set of allowable expenses that can be subtracted from their taxable income. These deductions encompass contributions made to college savings accounts, contributions to ABLE accounts designed for individuals with disabilities, and income stemming from tax-exempt bonds issued by either the state or local Illinois governments. This distinct deduction structure gives Illinois residents an alternative means of reducing their taxable income while navigating the state’s tax landscape.

How to Calculate Illinois State Income Tax

Calculating your Illinois state income tax is straightforward due to the flat-rate system. Multiply your federal adjusted gross income by the tax rate of 4.95% to determine your state income tax liability. Remember to subtract any applicable deductions to arrive at your final taxable income.

Also Read: Missouri State Income Tax: Rates and Who Pays in 2022-2023

Do I Have to Pay Illinois State Income Tax?

Illinois state income tax obligations hinge on several factors:

  1. Illinois Residency: If you’re an Illinois resident and must file a federal tax return, you must also file an Illinois state tax return.
  2. Illinois Residents with Income: Even without a federal filing requirement, Illinois residents must file if their income surpasses their exemption allowance.
  3. Nonresidents with Illinois Income: Nonresidents who earned income from an Illinois source during the tax year may be liable for Illinois state income tax.
  4. Part-Year Residents: Individuals who resided in Illinois for part of the year and had income during that time are subject to Illinois state income tax.

Moreover, Illinois has tax agreements with neighboring states (Iowa, Kentucky, Michigan, and Wisconsin), exempting Illinois residents working in these states from filing taxes in those states. Similarly, residents of these neighboring states working in Illinois may only need to file an Illinois state income tax return if they earned specific non-wage income in Illinois.

How to Pay Illinois State Income Tax

Paying your Illinois state income tax is a straightforward process. You can file your state income tax return electronically or by mail. Many taxpayers opt for electronic filing for convenience and faster processing times. Also, online tax filing software options like Beem are available for your use. Be sure to submit your payment and return by the tax deadline to avoid penalties.

Am I a Resident for Illinois Income Tax Purposes?

Illinois state income tax categorizes individuals into three residency statuses: Illinois residents, nonresidents, and part-year residents. Accurate identification of one’s residency status is vital for precise income tax compliance in Illinois.

Resident Status Rules

In Illinois, residency for income tax purposes involves dwelling in the state for the entire tax year or maintaining a domicile intending to return after temporary absences. Such absences can include U.S. armed forces service, foreign residency, or out-of-state living for educational purposes. This classification results in taxation on all income, both in-state and out-of-state. Discerning one’s residency status is crucial for precise income tax compliance, as it delineates the extent of income subject to Illinois taxation.

Part-Year Resident Status Rules

In Illinois, part-year residents face specific income tax guidelines that depend on their residency duration. They must report income earned while they were Illinois residents and income originating from Illinois sources during their nonresident periods.

Part-year residency applies to those who either establish Illinois residency during the year or shift from an Illinois resident to a resident of another state within the same tax year. Comprehending these rules is essential for accurately determining the taxable portion of income for part-year residents in Illinois.

Also Read: Kansas State Income Tax

Nonresident Status Rules

Nonresident status in Illinois taxation pertains to individuals whose primary residency lies outside the state. Nonresidents must report income from Illinois sources if their adjusted gross income exceeds their Illinois exemption allowance. Specifically, if nonresidents earn enough income from an Illinois source, they must file a tax return in the state. Nonresident status is determined by the source of income rather than residency, emphasizing the importance of understanding the rules for accurately fulfilling Illinois tax obligations for out-of-state residents.

Where is My Illinois State Income Tax Refund?

If you’re expecting a refund, you can track the status of your Illinois state income tax refund on the official Illinois Department of Revenue website. Input your Social Security Number and your first and last name for access to your refund status. Typically, refunds are processed within a few weeks of filing your return, but processing times may vary.

Also Read: Pennsylvania State Income Tax: Rates and Who Pays in 2022-2023

Why Did My Illinois State Income Tax Increase?

Illinois residents saw changes in their state taxes due to the fiscal year 2023 budget. The budget introduced a temporary grocery tax holiday to alleviate inflation-related challenges. It postponed a gas tax increase from July 2022 to January 2023.

However, the grocery tax was reinstated at a 1% rate on July 1, impacting families and potentially adding $10 to their monthly grocery expenses. Additionally, the gas tax increased twice in 2023, reaching 45.4 cents per gallon, with future annual increases tied to the consumer price index.

Illinois Sales Tax

Illinois imposes a state sales tax of 6.25 percent, but local municipalities can add up to 4.75 percent in additional sales tax. Consequently, the state’s average combined sales tax rate is 8.82 percent. The combined sales tax rate in Chicago is even higher, at 10.25 percent. Check out Beem Tax Calculator to get a quick and accurate estimate of your federal and state tax refund for free.

Illinois State Income Tax

5 Things to Know About Illinois Income Tax

Here are five key takeaways to help you better understand Illinois income tax:

  1. Progressive vs. Flat Tax: Illinois employs a flat income tax rate, which means everyone pays the same percentage of their income, regardless of how much they earn.
  2. Grocery Tax Holiday: The fiscal year 2023 budget introduced a temporary grocery tax holiday in Illinois. However, the grocery tax resumed at 1% on July 1, 2023, affecting household budgets.
  3. Residency Matters: Your residency status plays a significant role in determining your Illinois state income tax liability. Be aware of the rules for residents, part-year residents, and nonresidents.
  4. Gas Tax Increase: The state gas tax increased twice in 2023, reaching 45.4 cents per gallon. Annual increases are tied to the consumer price index, impacting transportation costs.
  5. Sales Tax: Illinois imposes a 6.25% state sales tax, with municipalities authorized to add up to 4.75% in local sales tax. The state’s average combined sales tax rate is 8.82%, rising to 10.25% in Chicago.

FAQs

Q. Is Illinois a High Tax State?

A. Yes, Illinois is considered a high-tax state. Residents in Illinois bear an effective total state and local tax rate exceeding 15% of their income, which ranks as the highest among all U.S. states.

Q. Is Illinois a Tax-Friendly State?

A. Illinois is generally not considered a tax-friendly state due to its flat income tax rate and property tax burdens. However, the impact of taxes can vary greatly depending on your circumstances, so it’s essential to speak to a tax professional for personalized advice. 

You can file personal tax returns online on Beem for both Federal and beeState taxes.

Q. Is Illinois a Good Place to Live for Taxes?

A. Illinois is notorious for high property taxes. With a current effective tax rate of 2.16%, it’s among the highest in the U.S., particularly important for potential homeowners.

Q. How Much of My Paycheck Goes to Taxes in Illinois?

A. In Illinois, your paycheck is subject to a flat income tax rate of 4.95%. This uniform rate applies to all income levels, meaning everyone’s earnings are taxed at the same percentage by the state, ensuring simplicity in tax calculations.

Q. Does Illinois Tax Income Earned in Another State?

A. Yes, Illinois taxes all residents’ income, regardless of where it is earned. Suppose you, as an Illinois resident, were taxed by another state on income received while residing in Illinois. In that case, you might be eligible for a tax credit for taxes paid to that other state, helping prevent double taxation on the same income.

Q. Does the State of Illinois Tax Social Security Income?

A. Illinois does not tax Social Security income. Social Security benefits are generally exempt from state income tax in Illinois, providing relief to retirees.

Q. Can Illinois State Income Tax Go Up?

A. The Illinois state income tax rate is determined by state legislation. The rate can change if the state enacts new tax laws. Be informed about potential tax law changes that could affect your tax liability.

Q. Do Seniors Have to Pay State Income Tax in Illinois?

A. No, Illinois provides significant tax relief for seniors. The state exempts almost all retirement income from taxation, encompassing Social Security retirement benefits, pension income, and income derived from retirement savings accounts. This favorable tax treatment makes Illinois an attractive option for retirees seeking to maximize their income during their retirement years.

Q. Does Illinois Have State Income Tax for the Military?

A. No, Illinois does not impose state income tax on income received for full-time active duty in the armed forces, including basic training and full-time active duty in the U.S. Armed Forces Reserves, National Guard units, and ROTC service. Military personnel serving in these capacities are exempt from state income taxation in Illinois.

Q. What Are Illinois State Income Taxes for LLC?

A. In Illinois, members of a limited liability company (LLC) are subject to specific tax obligations. Each member is responsible for paying 12.4% of the LLC’s profits for Self-Employment taxes and an additional 2.9% for Medicare. Additionally, they must fulfill the state’s flat-rate income tax requirement, which stands at 4.95%. This combination of Self-Employment taxes and the state income tax constitutes the tax liability for LLC members in Illinois.

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Picture of Prem Kishan

Prem Kishan

A seasoned Product Manager who thrives on making a meaningful impact within the organization, Prem is deeply passionate about tackling intricate problems using cutting-edge technology and is a specialist in tax content.

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This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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