Illinois: 4.95% Flat State Income Tax Rate
Illinois taxes all personal income at a flat rate of 4.95%. Every dollar of income is taxed at the same rate regardless of how much you earn. This makes Illinois income tax simple to model: a $150,000 salary generates exactly $7,425 in Illinois state income tax, and a $500,000 salary generates exactly $24,750.
Illinois flat income tax: 4.95% × $150,000 = $7,425. This is exact. Illinois uses a flat rate with no brackets.
The flat tax structure is a meaningful difference from graduated states like California or New Jersey. In Illinois, high-income earners do not face a higher marginal rate as income increases. The 4.95% rate applies uniformly. Illinois voters rejected a constitutional amendment to introduce a graduated income tax in November 2020, and the flat tax is constitutionally protected.
Illinois also levies a 9.5% corporate income tax (one of the highest in the US) and has significant property taxes, particularly in the Chicago metro. Cook County property taxes are among the highest in the country. For homeowners, the combined state and local tax picture in Illinois is notably burdensome. For renters, the income tax rate of 4.95% is moderate compared to coastal states.
Chicago is a major tech and finance hub, home to large employers including McDonald's, Boeing (headquarters), Citadel, and a growing tech startup ecosystem. The cost of living is well below San Francisco and New York but above the Sun Belt metros. The flat 4.95% income tax is predictable and moderate for most income levels.
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Total Comp CalculatorFrequently asked questions: Illinois income tax
What is Illinois' state income tax rate in 2026?
Illinois taxes all personal income at a flat rate of 4.95%. Every dollar of income is taxed at the same rate. There are no graduated brackets. This rate has been in effect since 2017 (increased from 3.75%).
Does Illinois have a graduated income tax?
No. Illinois has a flat income tax rate constitutionally. Illinois voters rejected a graduated income tax amendment in November 2020. Any change to a graduated tax would require another constitutional amendment.
How does Illinois income tax compare to neighboring states?
At 4.95% flat, Illinois is in the middle of the range. Wisconsin has graduated rates up to 7.65%; Indiana has a flat 3.05%; Michigan has a flat 4.25%. No nearby state has zero income tax.
Tax rates shown reflect the best available 2026 information and are provided for informational purposes only. State income tax rates, brackets, and rules change frequently. This page is not tax advice. Consult a qualified tax professional for advice specific to your situation. © CompCalc — compensationcalculator.xyz