Illinois Income Tax Calculator 2026

How the Illinois flat tax is calculated

Illinois income tax is 4.95% of your Illinois net income: federal adjusted gross income, plus a few additions, minus subtractions such as exempt retirement income, minus your exemption allowance. There are no brackets and no standard deduction, so the exemption is what keeps lower incomes partly untaxed.

For 2026 the exemption is $2,925 for you, $2,925 for your spouse on a joint return and $2,925 for each dependent. You add $1,000 if you or your spouse are 65 or older, and another $1,000 for legal blindness. The whole exemption allowance disappears once federal AGI exceeds $250,000, or $500,000 for married couples filing jointly.

Worked example: a family of four earning $120,000

A married couple filing jointly with two children and $120,000 of wages claims four exemptions worth $11,700. Their Illinois net income is $108,300, and the tax is 4.95% of that, or $5,361. That works out to 4.47% of their gross pay, below the headline rate because of the exemptions.

The cliff at the AGI limit matters for high earners. A single filer at $260,000 pays $12,870, against $12,725 if the exemption still applied, so crossing $250,000 costs about $145 in extra Illinois tax on top of the tax on the additional income.

Retirement income and Social Security

Illinois does not tax most retirement income. Federally taxed Social Security, railroad retirement, pensions, IRA and 401(k) distributions and governmental deferred compensation are subtracted on Line 5 of Form IL-1040, as explained in Publication 120. Retirees who filed a federal return still have to file an IL-1040 to claim the subtraction.

This makes Illinois unusual among income-tax states: a retiree living on Social Security and a pension may owe no Illinois income tax at all, while a working household at the same income pays the full flat rate.

Credits that reduce Illinois tax

Illinois offers a short list of credits, and two of them have the same income limit as the exemption.

• Property tax credit: for property tax paid on your Illinois principal residence (Schedule ICR). Not allowed when federal AGI exceeds $250,000, or $500,000 joint.
• K-12 education expense credit: for tuition, book and lab fees paid for children in kindergarten through 12th grade, with the same income limits.
• Illinois Earned Income Tax Credit: available even to some workers who do not qualify for the federal EITC (Schedule IL-E/EITC).
• Child Tax Credit: families who receive the Illinois EITC and have a dependent child under 12 get an extra credit equal to 40% of their Illinois EITC.
• Credit for tax paid to another state: for Illinois residents taxed on wages earned in a non-reciprocal state such as Indiana or Missouri.

Filing Form IL-1040: deadlines, residency and use tax

The 2026 Form IL-1040 is due April 15, 2027, or the next business day if that falls on a weekend or holiday. Illinois grants an automatic six-month extension to file, but not to pay, so any balance due should be paid by the April date. If your tax after withholding and credits is more than $1,000, or you were required to make estimated payments and did not, you may owe a late-payment penalty for underpayment of estimated tax, figured on Form IL-2210.

Part-year residents and nonresidents with Illinois income file Form IL-1040 with Schedule NR, which taxes all income received while a resident plus Illinois-source income received while a nonresident. Residents of Iowa, Kentucky, Michigan and Wisconsin generally file only to recover Illinois tax withheld from wages in error or to report non-wage Illinois income such as lottery winnings.

The IL-1040 also has a use tax line. If you bought items online or out of state without paying Illinois sales tax, you owe use tax at 6.25% on general merchandise. If your annual use tax exceeds $600 ($1,200 joint), you must file Form ST-44 instead of reporting it on the income tax return.