Illinois Income Tax Calculator
Work out what you actually owe Illinois for the year, not just what comes out of your paycheck. This calculator follows Form IL-1040 line by line — base income, exemptions, the flat 4.95%, and the property tax, education, earned income and child tax credits.
Illinois Income Tax Calculator (Form IL-1040)
Illinois withdraws the exemption allowance entirely once federal AGI passes $250,000. It is a cliff, not a taper.
- Federal adjusted gross income$0
- Illinois subtractions$0
- Illinois base income$0
- Exemption allowance$0
- Net income taxed$0
- Tax at 4.95%$0
- Property tax credit$0
- K-12 education credit$0
- Illinois earned income credit$0
- Illinois child tax credit$0
- Use tax on untaxed purchases$0
- Total Illinois tax$0
- Withheld and paid in$0
- Refund$0
- Amount you owe$0
How Illinois income tax is calculated
Illinois is a piggyback state: it does not ask you to recalculate your income from scratch, it starts from the figure the federal return already produced. That makes the whole computation short enough to write out in six lines.
1. Federal adjusted gross income (Line 1)
2. Plus Illinois additions — federally tax-exempt interest, out-of-state 529 earnings (Lines 2–3)
3. Minus Illinois subtractions — retirement income, Treasury interest, military pay, 529 contributions (Lines 5–7)
4. = Illinois base income (Line 9)
5. Minus the exemption allowance (Line 10)
6. × 4.95% = your Illinois tax (Line 12), then credits and payments
Because step 1 is federal AGI, anything that reduced your federal AGI has already reduced your Illinois tax: a traditional 401(k) deferral, an HSA contribution, the deductible half of self-employment tax, student loan interest. Anything claimed after AGI has not — the federal standard deduction, itemized deductions and the qualified business income deduction all leave the Illinois figure untouched.
The subtractions that matter
Illinois hands back four categories of income that most states tax, and one of them is worth a great deal to retirees.
| Subtraction | What it covers | Limit |
|---|---|---|
| Retirement income | Social Security, pensions, 401(k), 403(b), 457, IRA and SEP distributions, railroad retirement, government plans | No cap |
| US Treasury interest | Treasury bills, notes, bonds and savings bonds, plus certain federal agency obligations | No cap |
| Military pay | Pay from the US Armed Forces and the National Guard | No cap |
| Illinois 529 contributions | Bright Start, Bright Directions and College Illinois! | $10,000 single / $20,000 joint |
| Illinois ABLE contributions | Accounts for people with disabilities | $10,000 / $20,000 |
The retirement subtraction is the one that changes lives. A retired couple drawing $90,000 from a pension and Social Security has an Illinois base income of zero and pays $0 in state income tax on it. The Illinois income tax rate guide goes into why that matters when you are still working and deciding between traditional and Roth contributions.
The exemption allowance and its cliff
Every person on the return is worth $2,925 of sheltered income for 2026 — you, a spouse on a joint return and each dependent. Two further $1,000 allowances are available for being 65 or older and for being legally blind, each claimable for both spouses.
| Household | Exemptions | Sheltered | Illinois tax saved |
|---|---|---|---|
| Single, no dependents | 1 | $2,925 | $144.79 |
| Married, no children | 2 | $5,850 | $289.58 |
| Married, two children | 4 | $11,700 | $579.15 |
| Married, both 65+, two children | 4 + 2 extra | $13,700 | $678.15 |
Above $250,000 of federal AGI (or $500,000 filing jointly) the exemption allowance is not reduced — it is removed entirely, and the property tax and education credits go with it. Crossing that line by a single dollar can cost a family well over $1,000. If you are close to it, a traditional retirement contribution that lowers federal AGI is worth more than its face value.
Illinois credits, and what each is worth
| Credit | Rate | Cap | Refundable? |
|---|---|---|---|
| Property tax credit | 5% of Illinois property tax paid on a principal residence | None, but limited to your tax | No |
| K-12 education expense credit | 25% of qualifying expenses above $250 | $750 per family | No |
| Illinois earned income credit | 20% of your federal EITC | Follows the federal credit | Yes |
| Illinois child tax credit | 40% of your Illinois EIC | Needs a child under 12 | Yes |
| Credit for tax paid to another state | Lesser of the other state's tax or Illinois tax on the same income | Schedule CR | No |
| Volunteer emergency worker credit | $500 per qualifying volunteer | Certificate required, capped program | No |
Two of these are worth flagging. The property tax credit is the one most Illinois homeowners forget: on a $9,000 property tax bill it is $450 straight off the state tax, and Illinois property tax bills are among the highest in the country. The Illinois earned income credit is genuinely refundable and now reaches groups the federal credit misses — ITIN filers, and childless workers aged 18 to 24 or 65 and over.
Three worked examples
| Single, $65,000 | Couple, $120,000, 2 kids | Retired couple, $90,000 | |
|---|---|---|---|
| Federal AGI | $65,000 | $120,000 | $90,000 |
| Retirement subtraction | $0 | $0 | −$90,000 |
| Illinois base income | $65,000 | $120,000 | $0 |
| Exemption allowance | −$2,925 | −$11,700 | −$7,850 |
| Net income taxed | $62,075 | $108,300 | $0 |
| Tax at 4.95% | $3,072.71 | $5,360.85 | $0.00 |
| Property tax credit | $0 | −$450.00 | $0.00 |
| Illinois tax owed | $3,072.71 | $4,910.85 | $0.00 |
| Effective Illinois rate | 4.73% | 4.09% | 0.00% |
Notice that nobody actually pays 4.95%. The exemption allowance and the credits pull the effective rate below the statutory one for every household, and further below it the lower the income — which is the closest thing a flat tax has to progressivity.
Withholding is not the same as tax
The number this page produces is your liability for the year. The number on your pay stub is withholding — an estimate your employer sends in on your behalf, calculated from Form IL-W-4 without knowing about your property tax, your dependents' credits or your spouse's income. The two rarely match exactly, and the gap is what turns into a refund or a bill in April.
To see the paycheck side, use the Illinois paycheck calculator. To see whether the two are on course to meet, the withholding calculator compares your year-to-date withholding against what the year is going to require. And if you already know both figures, the refund calculator tells you which way the balance falls.
Filing and paying
- Due date: April 15, with an automatic six-month extension to file — but not to pay.
- How to file: free through MyTax Illinois, or through commercial software. E-filing is faster and less error-prone.
- Refund timing: roughly four weeks for an e-filed return, more than eight for paper. Check status through Where's My Refund on MyTax Illinois.
- Estimated payments: required if you expect to owe more than $1,000 after withholding — see the estimated payments guide.
- Use tax: Line 21 asks about untaxed out-of-state and online purchases. Under $600 of purchases you may use the AGI-based table in the instructions instead of exact receipts.
- Late payment: 2% of the tax if paid within 30 days, 10% after that, plus interest at the federal underpayment rate — 7% a year through the end of 2026.
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People also ask about Illinois income tax
Start from your federal adjusted gross income, add back any Schedule M additions, subtract retirement income and other Illinois subtractions to get Illinois base income, subtract the exemption allowance of $2,925 per person, then multiply what is left by 4.95%. Credits — property tax, K-12 education, the earned income credit — come off after that. There are no brackets to look up, which makes Illinois one of the simplest state returns in the country.
Neither, exactly. It is calculated on Illinois base income, which starts from federal adjusted gross income — so it is already net of federal above-the-line deductions such as a traditional 401(k), HSA contributions and the deductible half of self-employment tax. Illinois then removes retirement income and a handful of other subtractions, and finally the exemption allowance. Illinois does not have a standard deduction and does not allow itemized deductions.
Above $250,000 of federal AGI for a single filer, or $500,000 filing jointly. It is a cliff rather than a phase-out: one dollar over the line and the entire exemption allowance disappears, along with the property tax credit and the K-12 education expense credit. For a family of four that is a swing of roughly $580 in exemption value plus whatever the credits were worth.
The main ones are the property tax credit at 5% of Illinois property tax paid on your principal residence, the K-12 education expense credit at 25% of qualifying expenses above $250 up to a $750 cap, the Illinois earned income credit at 20% of your federal EITC, and the Illinois child tax credit at 40% of your Illinois EIC for families with a child under 12. The EIC and child credit are refundable — they can produce a refund even if you owed no tax. Schedule CR gives a credit for tax paid to another state.
No. Illinois taxes short-term and long-term capital gains at the same flat 4.95% as wages, because it begins from federal AGI and applies no preferential rate of its own. There is no Illinois equivalent of the federal 0%/15%/20% long-term capital gains schedule. A $50,000 long-term gain that is taxed at 15% federally is still taxed at 4.95% by Illinois.
No. The exemption allowance — $2,925 per person for 2026 — is the only general reduction Illinois offers, and it is a fixed dollar amount rather than a percentage. Illinois also does not allow itemized deductions, so mortgage interest and charitable donations do not reduce Illinois tax the way they can reduce federal tax. What Illinois gives instead is the retirement income subtraction, which is unusually generous.
A single filer with $100,000 of federal AGI, one exemption and no subtractions owes $4,805 in Illinois income tax — that is ($100,000 − $2,925) × 4.95%. Add a spouse and two children and the four exemptions bring it down to $4,371. Property tax on a principal residence would reduce it further at 5% of what you paid.
Form IL-1040 is due April 15. Illinois grants an automatic six-month extension to file with no form to submit, but the tax itself is still due in April. Most people file free through MyTax Illinois or through commercial software. E-filed refunds typically arrive in about four weeks; paper returns can take more than eight, which is why the Department of Revenue says plainly that there is no advantage to filing on paper.
Sources
- Illinois Department of Revenue — Form IL-1040 instructions
- IDOR Informational Bulletin FY 2026-15 — what's new for Illinois income taxes
- IDOR — Illinois earned income credit
- IDOR — Illinois child tax credit
- IDOR — refunds and Where's My Refund
This calculator is a simplified model of Form IL-1040 and cannot account for every addition, subtraction or credit — pass-through entity tax credits, Schedule NR apportionment for part-year residents, and the recapture rules all sit outside it. Estimates only, not tax advice.