Tax questions answered

Illinois income tax: the flat 4.95 percent rate

Illinois taxes individual income at a flat 4.95 percent. See how it starts from federal AGI, the $2,925 exemption for 2026 and which pensions are left out.

General U.S. tax information, checked against official sources on the date shown. Written by Prem Tax and Accounting Corp, a CPA firm. Rules, dates and amounts change, so confirm figures on the linked official pages. This is not tax or legal advice for your situation.

Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 30, 2026.

The short answer

Illinois taxes individual income at one flat rate of 4.95 percent, the rate the Illinois Department of Revenue lists and also shows for 2025. The return starts from your federal adjusted gross income, subtracts items such as Social Security and most retirement income, and then lets you claim an exemption for each person.

Key points

One flat rate of 4.95 percent applies to Illinois net income, so there are no income brackets.
The Illinois return, Form IL-1040, starts from federal adjusted gross income.
Federally taxed Social Security and most qualified retirement income can be subtracted.
The exemption is $2,925 per person for 2026 and $2,850 for 2025, and it is lost above an income limit.
Illinois has its own estimated tax form, IL-1040-ES, when you expect to owe more than $1,000.

How the Illinois tax works

Unlike the federal system, Illinois does not use brackets for individuals. It takes your federal adjusted gross income, adds or subtracts the items listed on the Illinois schedules, subtracts your exemptions and applies 4.95 percent to what is left. Illinois does not copy the federal standard deduction. The exemption does that job instead.

The exemption and who loses it

Item	Amount
Exemption per person, 2025	$2,850
Exemption per person, 2026	$2,925
No exemption if federal AGI is above (single, head of household, separate)	$250,000
No exemption if federal AGI is above (married filing jointly)	$500,000

The Illinois Department of Revenue also gives an extra $1,000 per person for age 65 or older and for legally blind on the 2025 form. The 2026 add-on amount was not confirmed when this page was written.

What Illinois leaves out

Illinois residents subtract federally taxed Social Security and railroad retirement benefits on the IL-1040. Most qualified retirement income, such as 401(k), IRA and government pension payments, is also subtracted. The word qualified matters, so check Publication 120 from the Department of Revenue before you assume a payment is free.

Example (invented): Priya and Dan file jointly with federal AGI of $90,000 and two children. They claim four exemptions at $2,925 each for 2026, which is $11,700. Their Illinois net income is $78,300 and the tax at 4.95 percent is about $3,876 before credits.

Filing and paying

File Form IL-1040

The 2025 return and any tax were due April 15, 2026. An automatic extension moves the filing date six months, but not the payment date.

Pay as you go

The Department of Revenue says estimated payments on Form IL-1040-ES are needed when your expected tax after withholding and credits is over $1,000. The usual dates are April 15, June 15, September 15 and January 15.

Claim credits

The K-12 education expense credit is 25 percent of qualified costs over $250, capped at $750 per return. It is claimed on Schedule ICR.

What to do next

Pull your federal AGI first, because Illinois starts there.
List any Social Security and retirement income, so you can subtract it correctly.
Count your exemptions and check the income limit.
Ask a CPA if you moved into or out of Illinois during the year.

Common questions

What is the Illinois income tax rate for 2026?

The Department of Revenue lists a flat 4.95 percent for individuals and no change appeared in its 2026 bulletin. Check the current instructions when you file.

Does Illinois tax Social Security?

Federally taxed Social Security benefits are subtracted on the Illinois return, so they are not taxed by Illinois for residents.

Is there an Illinois standard deduction?

No. Illinois uses a per-person exemption instead of a standard deduction.

When is the Illinois return due?

The 2025 return was due April 15, 2026. A six-month extension to file does not extend the time to pay.

Official sources

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