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This site is not affiliated with the IRS or any state revenue department. Information is for general educational purposes only and is not tax, legal, or financial advice. State tax brackets and rules change annually. Always confirm current figures with your state's Department of Revenue or a licensed CPA before filing. Sources: state revenue departments, Tax Foundation, IRS Publication 17. Last reviewed April 2026.
Income Tax by State›Illinois
IL
Flat Rate: 4.95%Pension Income ExemptLast reviewed April 2026

Illinois State Income Tax 2026

Illinois has a flat income tax rate of 4.95% applied to all income levels. There are no graduated brackets. Uniquely, Illinois does not tax pension income, 401(k) withdrawals, or Social Security, making it among the most retirement-friendly states in the country.

Illinois 2026 Quick Facts

Tax typeFlat rate (constitutionally mandated)
Rate4.95% on all income
Personal exemption (single)$2,425 per exemption
Personal exemption (MFJ)$4,850 (2 exemptions)
Local income taxNone
Social Security taxedNo
Pension income taxedNo (all pensions exempt)
401(k)/IRA withdrawals taxedNo
Reciprocity agreementsIowa, Kentucky, Michigan, Wisconsin
2026 changesNo change; flat 4.95% unchanged

Why Illinois Is a Top Retirement State Despite 4.95%

Illinois does not tax Social Security, pension income, 401(k) distributions, or IRA withdrawals. A retiree with $80,000 of pension income and $20,000 of Social Security pays zero Illinois income tax. Combined with Chicago's world-class amenities, this makes Illinois one of the most retirement-tax-efficient states in the Great Lakes region.

Illinois Effective Rate Calculator

Standard deduction: $2,425 applied before tax calculation.

Effective Rate

4.79%

State Tax Due

$3,592

Marginal Bracket

4.95%

State income tax only. Does not include federal income tax, Social Security, Medicare, or local income tax. Calculations are estimates for educational purposes. Verify with a licensed CPA before filing.

What You Actually Pay

$50,000

State tax$2,354
Effective rate4.7%
After state tax$47,646

$75,000

State tax$3,591
Effective rate4.8%
After state tax$71,409

$100,000

State tax$4,828
Effective rate4.8%
After state tax$95,172

$250,000

State tax$12,253
Effective rate4.9%
After state tax$237,747

Single filer, $2,425 personal exemption. In a flat-rate state, the effective rate almost equals the flat rate (difference is due to the personal exemption).

Illinois Reciprocity Agreements

Illinois has reciprocity agreements with Iowa, Kentucky, Michigan, and Wisconsin. If you live in Illinois but work in any of these states, you only pay income tax to Illinois (your state of residence). Conversely, residents of those states who work in Illinois pay tax only to their home state.

To claim the reciprocity benefit, you typically file an exemption certificate with your employer in the other state so they do not withhold that state's income tax.

Illinois Income Tax: FAQs

What is the Illinois income tax rate for 2026?
Illinois has a flat income tax rate of 4.95% for 2026, applied to all income levels. This rate has been in place since 2017 (it increased from 3.75% as a temporary measure that became permanent). There are no graduated brackets.
Does Illinois tax retirement income?
Illinois is exceptionally favorable for retirees. Illinois does not tax Social Security benefits, pension income (including government, private, and military pensions), 401(k) and IRA withdrawals, or most other retirement income. This makes Illinois one of the most retirement-tax-friendly states despite its 4.95% flat rate.
Does Illinois have a standard deduction?
Illinois does not have a standard deduction in the traditional sense. Instead, Illinois uses a personal exemption of $2,425 per person (for 2026). For a single filer, $2,425 is deducted from income before applying the 4.95% rate. For a married couple filing jointly with two children, $9,700 would be exempt.
Does Illinois have a local income tax?
No. Illinois does not allow cities or counties to levy local income taxes. The state's flat 4.95% is the only income tax applied. Chicago has various other taxes (sales tax, property tax) but no city income tax.
Did Illinois income tax change in 2026?
No. Illinois maintained its flat 4.95% rate in 2026. A constitutional amendment to allow a graduated income tax (the 'Fair Tax') was rejected by voters in November 2020, so the flat rate structure is locked into the state constitution and can only be changed by another constitutional amendment.

Sources: Illinois Department of Revenue (tax.illinois.gov), Tax Foundation. Data verified April 2026. Not tax advice.