Illinois Tax Brackets: The Flat 4.95% and the Federal Brackets That Do Apply
Search for Illinois tax brackets and you run into a surprise: there are none. Illinois taxes every dollar of taxable income at one flat 4.95% rate. The brackets that actually shape your paycheck are federal — this guide covers both, and shows how they combine.
Illinois has no tax brackets — here is why
Most states with an income tax use graduated brackets, where higher slices of income are taxed at higher rates. Illinois does not. The state applies a single flat rate of 4.95% to net income, whatever the amount. A minimum-wage worker and a surgeon pay the same rate on their taxable income; only the dollar amounts differ.
This is not merely a policy choice that could change with next year's budget. The Illinois Constitution, in Article IX, Section 3, requires that any tax on individual income be non-graduated — measured at one rate. Brackets are constitutionally prohibited unless voters amend that section.
Voters were asked to do exactly that in November 2020. The proposed "Fair Tax" amendment would have removed the flat-rate requirement and allowed the General Assembly to enact graduated rates, with higher brackets aimed at incomes above $250,000. The amendment was rejected, so the flat structure remains, and any rate change the legislature makes applies to everyone at once. For a closer look at the current rate itself, see the guide to the Illinois income tax rate.
How the flat rate has moved over time
Because there are no brackets, the entire history of Illinois income tax fits in one small table. The rate has changed only a handful of times in decades, and each change hit every taxpayer simultaneously.
| Period | Rate |
|---|---|
| 2017 to present | 4.95% |
| 2015 to mid-2017 | 3.75% |
| 2011 to 2014 | 5.00% |
| 1990 to 2010 | 3.00% |
The pattern tells its own story. The rate sat at 3% for two decades, jumped to 5% in 2011 as a temporary measure during a budget crisis, partially sunset to 3.75% in 2015, and was raised to the current 4.95% in July 2017, where it has stayed ever since.
The 2026 federal tax brackets — what you actually need
When someone searches for their tax bracket, the number they are looking for is almost always federal. Federal income tax is graduated, and for Illinois workers it is by far the largest tax on a paycheck. Here are the 2026 brackets, which apply to taxable income — your income after the standard deduction or itemized deductions.
| Rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 10% | Up to $12,400 | Up to $24,800 | Up to $17,700 |
| 12% | $12,401 – $50,400 | $24,801 – $100,800 | $17,701 – $67,450 |
| 22% | $50,401 – $105,700 | $100,801 – $211,400 | $67,451 – $105,700 |
| 24% | $105,701 – $201,775 | $211,401 – $403,550 | $105,701 – $201,775 |
| 32% | $201,776 – $256,225 | $403,551 – $512,450 | $201,776 – $256,200 |
| 35% | $256,226 – $640,600 | $512,451 – $768,700 | $256,201 – $640,600 |
| 37% | Above $640,600 | Above $768,700 | Above $640,600 |
Married couples filing separately use the same thresholds as single filers. Before any of these rates apply, the 2026 standard deduction comes off the top: $16,100 for single filers, $32,200 for joint filers and $24,150 for heads of household. A single Illinois worker earning $60,000 therefore has $43,900 of federal taxable income and sits in the 12% bracket, even though the salary alone might suggest 22%.
Marginal versus effective: what your bracket really costs you
The most common misreading of a bracket table is assuming the whole income is taxed at the bracket rate. It is not. Brackets are marginal: each rate applies only to the slice of income inside that bracket. Landing in the 22% bracket does not mean paying 22% of everything — it means paying 22% on the dollars above the bracket's floor, 12% on the slice below that, and 10% on the first slice.
Take a single Illinois filer earning $75,000 in 2026. After the $16,100 standard deduction, taxable income is $58,900, which lands in the 22% federal bracket. But the actual federal bill is $1,240 on the first bracket, $4,560 on the second and 22% only on the final $8,500 — about $7,670 in total, an effective federal rate of roughly 10.2%. Stack the flat Illinois 4.95% and 7.65% of FICA on top and the combined effective rate comes to about 22.8%. In other words, the 22% "bracket" and the 22.8% total burden are a coincidence of arithmetic, not the same number. You can see the full breakdown for your own pay with the Illinois paycheck calculator, or read the plain-language walkthrough of how much tax comes out of a paycheck.
Your marginal rate is what the next dollar of income is taxed at — useful for judging a raise, a bonus or a 401(k) contribution. Your effective rate is total tax divided by total income — useful for judging your overall burden. For nearly everyone the effective rate is far below the marginal one.
The Illinois exemption allowance — the one moving part
A flat tax still has one adjustable piece: the personal exemption allowance, which shelters a slice of income from the 4.95% rate. For 2026 the allowance is $2,925 per exemption, up from $2,850 in 2025 and $2,775 in 2024. Each 2026 exemption is worth $144.79 of Illinois tax. A married couple with two children claims four exemptions and shelters $11,700 of income, trimming their state bill by about $579. The number of exemptions you claim also drives your paycheck withholding through Form IL-W-4.
The exemption allowance vanishes entirely once federal adjusted gross income passes $250,000 for a single filer or $500,000 on a joint return. It is a cliff, not a taper: one dollar over the line and every exemption in the household is gone at once. For a family of four crossing the joint threshold, that single dollar of extra income costs about $579 in lost exemptions.
To see how the exemption, the flat rate and Illinois credits interact on a full return, run your numbers through the Illinois income tax calculator.
What a flat tax means in practice
Because the exemption shelters the same fixed amount for everyone, the Illinois effective rate is not perfectly flat. It starts below 4.95% and creeps upward as income grows, because the sheltered $2,925 becomes a smaller share of a bigger income. It approaches 4.95% but, for anyone still receiving the exemption, never quite reaches it.
| Income | Illinois tax | Effective Illinois rate |
|---|---|---|
| $30,000 | $1,340.21 | 4.47% |
| $50,000 | $2,330.21 | 4.66% |
| $75,000 | $3,567.71 | 4.76% |
| $100,000 | $4,805.21 | 4.81% |
| $250,000 | $12,230.21 | 4.89% |
Above $250,000 of federal AGI the exemption cliff removes the shelter, and the effective rate becomes exactly 4.95%. The practical takeaway is simple: for planning purposes, Illinois tax is close enough to 4.95 cents on the dollar that mental arithmetic works. What that leaves in your pocket after federal tax and FICA is a different question — the guide to salary after taxes in Illinois works through complete examples.
How Illinois compares with its neighbors in 2026
Every state bordering Illinois taxes income, but the structures differ sharply — four flat, two graduated, and one flat state with a mandatory local layer on top.
| State | Structure | Rate | Local income tax |
|---|---|---|---|
| Illinois | Flat | 4.95% | None |
| Indiana | Flat | 2.95% | County rates of 0.5% – 3.0% (Lake County 1.5%, Marion County 2.02%) |
| Iowa | Flat | 3.8% | None on wages |
| Kentucky | Flat | 3.5% | Local occupational taxes in some areas |
| Michigan | Flat | 4.25% | Some city income taxes |
| Missouri | Graduated | Up to 4.7% | St. Louis and Kansas City earnings taxes |
| Wisconsin | Graduated | Up to 7.65% | None |
The comparison cuts both ways. A middle-income worker generally pays less state income tax in Indiana, Iowa or Kentucky than in Illinois, even after Indiana's county add-on. A high earner, on the other hand, pays materially more in Wisconsin, where the top graduated rate of 7.65% exceeds anything Illinois can constitutionally charge. Illinois also holds one genuine advantage: no city or county anywhere in the state taxes wages, so the posted 4.95% is the whole story.
Flat versus graduated across the country
Illinois is far from alone. Roughly a dozen states now use a flat individual income tax, a group that has grown in recent years as states such as Iowa and Kentucky converted from graduated schedules — and that includes four of Illinois's six neighbors. Most states with an income tax still use graduated brackets, with California's top rate the highest in the nation, while a handful of states, including Texas, Florida and Tennessee, levy no individual income tax on wages at all. What sets Illinois apart is not the flat rate itself but the constitutional lock on it: in most flat-tax states the legislature could adopt brackets by ordinary statute, whereas Illinois cannot without a voter-approved amendment.
Corporate income tax: also flat, and higher
The same non-graduated rule shapes business taxation. Illinois taxes corporate income at a flat 7%, and corporations pay an additional 2.5% personal property replacement tax on the same base, for a combined 9.5% — among the steeper corporate rates in the country. The replacement tax dates from 1979, when Illinois abolished local personal property taxes and compensated local governments with a statewide surcharge on business income. Employers face payroll-side obligations too, from unemployment insurance to withholding remittance, covered in the guide to Illinois payroll taxes.
People also ask about Illinois tax brackets
No. Illinois is a flat-tax state: a single rate of 4.95% applies to all taxable income, whether you earn $20,000 or $2 million. There are no income tiers, no marginal rates and no bracket thresholds at the state level. The Illinois Constitution requires a non-graduated income tax, so brackets could not be introduced without a constitutional amendment. When people search for Illinois tax brackets they usually need one of two things: the flat state rate, or the federal brackets, which do apply to Illinois residents and are graduated.
The Illinois individual income tax rate for 2026 is 4.95%, unchanged since July 2017. It applies to net income after the personal exemption allowance, which is $2,925 per exemption in 2026. There is no local or city income tax anywhere in Illinois, Chicago included, so 4.95% is the complete state and local income tax picture for wages. Employers withhold it at a flat 4.95% of wages after the allowances claimed on Form IL-W-4.
Your federal bracket depends on taxable income and filing status, not on your state. For 2026, a single filer reaches the 12% bracket above $12,400 of taxable income, 22% above $50,400, 24% above $105,700, 32% above $201,775, 35% above $256,225 and 37% above $640,600. Married couples filing jointly use thresholds roughly twice as wide. Remember that taxable income is what remains after the standard deduction — $16,100 for a single filer in 2026 — so a $60,000 salary lands in the 12% bracket, not 22%.
The Fair Tax was a proposed amendment to the Illinois Constitution on the November 2020 ballot. It would have removed the requirement that the income tax be non-graduated, clearing the way for a bracket system with higher rates on higher incomes. Voters rejected it, so the flat-tax requirement in Article IX, Section 3 still stands. Any future move to graduated brackets would need another constitutional amendment approved by voters, which is why Illinois rate changes arrive as adjustments to the single flat rate instead.
The personal exemption allowance is $2,925 per exemption for 2026, up from $2,850 in 2025 and $2,775 in 2024. Each exemption shelters that much income from the 4.95% rate, saving $144.79 of Illinois tax. You claim one for yourself, one for a spouse on a joint return and one for each dependent. The allowance disappears entirely once federal adjusted gross income passes $250,000 for a single filer or $500,000 on a joint return — a hard cliff rather than a gradual phase-out.
No. Unlike states such as Indiana, where every county adds its own income tax on top of the state rate, no Illinois city or county taxes wages. Chicago, despite its size, has never levied a city income tax on earnings. That makes Illinois take-home pay simple to figure: 4.95% to the state, federal tax on the graduated brackets, and 7.65% FICA. Local governments in Illinois raise revenue through property taxes and sales taxes instead, which is where the state's high-tax reputation mostly comes from.
It sits in the middle. For 2026, Illinois charges a flat 4.95% with no local additions. Indiana is lower at a flat 2.95% state rate, but every county adds between 0.5% and 3.0% on top. Iowa is a flat 3.8% and Kentucky a flat 3.5%. Michigan charges a flat 4.25%. On the graduated side, Missouri tops out at 4.7% while Wisconsin reaches 7.65% at the highest incomes. So middle and lower earners often pay less next door, while high earners can pay considerably more in Wisconsin.
Illinois taxes corporate income at 7%, and corporations also pay a 2.5% personal property replacement tax on the same income, bringing the effective combined rate to 9.5% — one of the higher corporate burdens in the country. Partnerships, S corporations and trusts pay a 1.5% replacement tax instead of the corporate schedule. Like the individual tax, the corporate rate is flat: there are no corporate brackets, and the non-graduated requirement in the Illinois Constitution applies to corporate income as well.
Sources
- IDOR — Form IL-1040 instructions, rate and exemption allowance
- IDOR — Informational Bulletin FY 2026-15
- IRS — Publication 15-T, federal income tax withholding methods
- IRS — tax year 2026 annual inflation adjustments
- Tax Foundation — state individual income tax rates and brackets
Figures reflect the 2026 tax year as published by the Illinois Department of Revenue and the IRS. Federal bracket thresholds are indexed annually and state rates can change by legislation. This page is general information, not tax advice — confirm your own situation with a tax professional.