Illinois Income Tax Brackets 2024

Unlike the federal government and many other states, Illinois does not have tax brackets that impose higher rates on people who earn more. While the absence of a state income tax in Illinois offers an advantage, understanding and fulfilling federal income tax obligations remains essential for businesses and individuals in the state. This guide has explored various aspects of federal taxation applicable to Illinois. Illinois’ flat income tax rate structure is currently one of the few advantages in the state’s tax code that boosts the state’s competitiveness.

What’s New for Illinois Income Taxes

No Illinois cities charge a local income tax on top of the state income tax, though. The 2.11% effective property tax rate in Illinois is illinois income tax rate second-highest in the nation, behind only New Jersey. That means the typical homeowner in the Prairie State pays 2.11% of their home value in property taxes. The difference between the exemption allowance and the standard deduction is that you can still take it even if you have other subtractions from your income as discussed above. With the standard deduction, generally speaking, you have to choose whether to take it or add up your itemized deductions and claim those instead.

Is unemployment income taxable by Illinois?

The IRS offers a “Tax Withholding Estimator” tool on its website to assist workers in figuring out the correct number of withholding allowances to indicate on their W-4 forms. This can help minimize tax over-withholding or under-withholding throughout the year and avoid potential penalties. Return — Your Form IL-1040 filing period is the same as your federal filing period. The due date for calendar year filers is April 15th of the year following the tax year of your return, unless April 15 falls on a weekend or IRS recognized holiday. When your income jumps to a higher tax bracket, you don’t pay the higher rate on your entire income.

• The base income earned in Illinois or while a resident of Illinois is then reduced by the number of federally claimed exemptions and any additional exemptions.
• This is part of its comprehensive pro-growth tax reform passed via LB754 in May 2023.
• Once you’ve filed your tax return, all you have to do is wait for your refund to arrive.
• Together these are called FICA taxes, and your employer will pony up a matching contribution.
• Using a tax estimator, you can input eligible tuition and fees to see how these expenses may reduce your taxable income.
• Removing this constitutional protection would weaken barriers to tax hikes that state legislators currently must overcome to raise taxes.

State Corporate Income Tax Rates and Brackets, 2024

• Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes.
• For the tax year 2025, these adjustments ensure that the credit remains aligned with the current economic conditions, providing targeted support to eligible taxpayers.
• Illinois’ flat income tax rate structure is currently one of the few advantages in the state’s tax code that boosts the state’s competitiveness.
• Some tax rates are the same for all taxpayers (fixed rates) and some are determined by location (location-based).
• You will likely need to make estimated payments if your income is either fully or partially exempt from Illinois withholding.

This new version no longer asks you to list total allowances, as it instead uses a five-step process that lets you enter personal information, claim dependents and indicate any additional income or jobs. In the absence of allowances, filers are required to enter annual dollar amounts for things like income tax credits, non-wage income, itemized and other deductions and total annual taxable wages. In 2018, another bill filed by Martwick would have created four income tax brackets, with tax rates ranging from 4% to 7.65%. The bill would have constituted an income tax hike for a vast majority of Illinois taxpayers, starting with individuals earning as little as $17,300 for a single filer with no dependents.

If you choose to pay by check or money order, must complete Form IL-1040-ES, Estimated Income Tax Payments for Individuals, and mail it with their estimated tax payments. Illinois’ maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Illinois’ %. You can learn more about how the Illinois income tax compares to other states’ income taxes by visiting our map of income taxes by state. As your income goes up, the tax rate on the next layer of income is higher.

These taxes comprise a combination of sales tax, excise taxes paid at the pump and wholesaler/retailer taxes. A financial advisor can help you understand how taxes may impact your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and bookkeeping and payroll services you can have a free introductory call with your advisor matches to decide which one you feel is right for you.

State Corporate Income Tax Rates & Brackets

By using a tax estimator, you retained earnings balance sheet can input your eligibility for various credits, like the Earned Income Tax Credit or Child Tax Credit. By entering the sale price and any relevant purchase details into the estimator, you can determine your potential tax liability. This knowledge empowers you to make better financial decisions regarding selling your assets. View how much tax you may pay in other states based on the filing status and state entered above. A financial advisor can help you understand how taxes fit into your overall financial goals.

Other forms of supplemental wages you can seek include bonuses, commission, stock options and prizes. Supplemental wages are taxed at the same rate as regular income in Illinois. If you have more than one job, you’ll need to split your allowances between your jobs. You can’t claim the same allowances with more than one employer in a single tax year.

tax rates for other filers

Previously, the tax rate was raised from 3% to 5% in early 2011 as part of a statewide plan to reduce deficits. If you expect to owe $500 or more on April 15th, you must pay your income tax to Illinois quarterly using Form IL-1040-ES. If you’re pursuing higher education or paying for someone else’s, you may be eligible for certain tax breaks. Using a tax estimator, you can input eligible tuition and fees to see how these expenses may reduce your taxable income. If you’re engaging in freelance work or running a side business, it’s essential to understand your tax obligations. By entering your additional income into a tax estimator, you can gauge how this affects your taxes and plan accordingly.