Illinois State Income Tax: Rates, Who Pays in 2023-2024

Illinois offers a homestead exemption up to a maximum of $10,000 in Cook County and $6,000 in all other counties. You must own the property and use it as your principal dwelling place. The exemption varies for others, such as persons with disabilities and veterans. There are three types of residency statuses when it comes to Illinois state tax. With NerdWallet Taxes powered by Column Tax, registered NerdWallet members pay one fee, regardless of your tax situation. We believe everyone should be able to make financial decisions with confidence.

Additional exemptions are allowed if the employee is over 65 years old and/or legally blind. We do all the hard work to set you up for just $40 + $6 per employee. Property Tax –  Property Tax Rate Tables are available in the Property Tax Statistics area by tax year in tables 27 and 28.

Illinois State Income Tax Credits

The exemption for 2023 is as high as $4,850 for married couples filing jointly ($2,425 for single filers). The share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to 45.8 percent in 2021. While the share has generally been increasing over the period, 2020 and 2021 are outlier years largely because of the changes in income and in tax policy during the coronavirus pandemic. Over the same period, the share paid by the bottom 50 percent of taxpayers fell from 4.9 percent to just over 2.3 percent in 2021.

In others, like Illinois, high property taxes are a major factor. New Jersey, which earned an F from MoneyGeek, residents have a double whammy of high income and property taxes. Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of tax credits such as the EITC. If the refundable portion were included, the tax share of the top income groups would be higher and the average tax rate of bottom income groups would be lower. The refundable portion is classified as a spending program by the Office of Management and Budget (OMB) and therefore is not included by the IRS in these figures.

Income Tax Rate By State

Most tax preparers can electronically file your return for you, or you can do it yourself using free or paid income tax software, like the examples listed below. Income tax deductions are expenses that can be deducted from your illinois income tax rate gross pre-tax income. Using deductions is an excellent way to reduce your Illinois income tax and maximize your refund, so be sure to research deductions that you mey be able to claim on your Federal and Illinois tax returns.

• Taxpayers over 65 (or legally blind) who file tax returns jointly are allowed an additional $1,000.
• To help you figure out how much you can expect to pay, here are the tax brackets for both the 2023 and 2024 tax years.
• In addition, the state of Illinois provides Booklet IL-700-T which includes withholding tables and explains how to determine the amount of Illinois income tax employers should withhold.
• In addition, Illinois has what is called an exemption allowance, which is a set amount that most people who earned a paycheck can knock off their taxable income.
• For example, do you occasionally reward your top performers with bonuses?

Always consult a tax professional if you are unsure about your obligations. If calculating payroll taxes ever starts to feel like a burden, you might want to review our list of signs it’s time to outsource your payroll. Here’s a summary of all you need to know when you’re calculating payroll taxes for your hardworking Illinoisans! For a more detailed explanation of all of the steps below, check out our step-by-step guide. For salaried employees, gross pay equals their annual salary divided by the number of pay periods per year. For hourly employees, gross pay equals the number of hours worked multiplied by their hourly wage.

Illinois State Income Tax Tables in 2023

Deductions can reduce your taxable income and could kick you to a lower bracket, which means you pay a lower tax rate. If you had $45,000 of taxable income, however, most of it would still fall within the 12% bracket, but the last few hundred dollars would land in the 22% tax bracket. Illinois’ maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Illinois’ %.

• We believe everyone should be able to make financial decisions with confidence.
• If your taxable income went up by $1, you would pay 12% on that extra dollar, too.
• Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S.
  rate inched up from 13.6 percent in 2020 to 14.9 percent in 2021.
• If you want to check the status of your Illinois tax refund, you can visit the Illinois Income Tax Refund page.
• In the figures prior to 2001, some dependent returns are included.
• You can save time and money by electronically filing your Illinois income tax directly with the .
• The top 1 percent of taxpayers paid more than $1 trillion in income taxes while the bottom 90 percent paid $531 billion.

In addition, the calculator potentially omits information relevant to determining the exact income tax figures. Below is a table of the general merchandise sales tax rates for all of the counties in Illinois. Food, drugs and medical appliances are all subject to a statewide tax rate of 1% of purchase price, in addition to local taxes https://www.bookstime.com/ of up to 1.25%, for a total tax of up to 2.25%. For example, candy and soda are generally subject to the higher “general merchandise” rate, but any candy containing flour is not, for sales tax purposes, classified as candy. As a small business owner, you handle federal, state, and local payroll taxes, along with your own taxes.