Illinois Tax Guide
4.95%top marginal rate
Illinois has a flat income tax of 4.95% and some of the highest property taxes in the nation, particularly in the Chicago suburbs. The state also levies an estate tax. A 2020 ballot measure to switch to a progressive income tax was rejected by voters.
Illinois Tax at a Glance
Income Tax
4.95%
Flat rate
Sales Tax
6.25%
State-level rate
Property Tax
2.27%
106% above the national average
Estate Tax
Yes
State-level estate/inheritance tax
How Illinois Compares to the National Average
Notable Tax Facts
- Second-highest effective property tax rates in the nation at ~2.27%
- Voters rejected a proposed graduated income tax in 2020
- Has an estate tax with a $4 million exemption — lower than the federal exemption
- Cook County (Chicago) property taxes are notoriously high
- Does not tax retirement income including Social Security, pensions, and 401k/IRA withdrawals
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Illinois Tax FAQ
What is Illinois' income tax rate?
Illinois has a flat income tax rate of 4.95%. All taxable income is taxed at the same rate. A 2020 ballot measure to switch to a progressive system was rejected by voters.
Why are Illinois property taxes so high?
Illinois relies heavily on property taxes to fund local schools, pensions, and services. The state's pension obligations and decentralized school funding system drive some of the highest property tax rates in the US.
Does Illinois tax retirement income?
No. Illinois is one of the most generous states for retirees — it does not tax Social Security benefits, pension income, or withdrawals from 401(k)s and IRAs.
Does Illinois have an estate tax?
Yes. Illinois has an estate tax with a $4 million exemption — significantly lower than the federal exemption. This can affect middle-class families with home equity and retirement accounts.
Compare With Other States
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Educational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.