Illinois State Tax Brackets, Standard Deductions, Forms

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That means that your net pay will be $43,202 per year, or $3,600 per month. Your average tax rate is 21.5% and your marginal tax rate is 34.6%. This marginal tax rate means that your immediate additional income will be taxed at this rate. For instance, an increase of $100 in your salary will be taxed $34.60, hence, your net pay will only increase by $65.40. Up to 50 percent of your benefits will be taxed if you file an individual tax return and make $25,000 to $34,000 in total income — or if you file jointly and as a couple make $32,000 to $44,000 in total income. Up to 85 percent of your benefits will be taxed by the federal government if your total income is more than $34,000 individually or $44,000 as a couple.

Are pensions or retirement income taxed?

The actual percentage of your taxable income you owe the IRS is called an effective tax rate. To calculate your effective tax rate, take the total amount of tax you paid and divide that number by your taxable income. Your effective tax rate will be much lower than the rate from your tax bracket, which claims against only your top-end earnings.


Illinois applies a flat state tax rate, but also you might be eligible to reduce your AGI by a personal exemption, which is $2,375 in the present case. In that table, you’ll notice that you reach the 12% bracket, but your income is only partially taxed at that percentage. Instead, 11.24% is the effective tax rate at which your income is evaluated. If you make $55,000 a year living in the region of Illinois, USA, you will be taxed $11,798.

Illinois Income Tax Forms

Illinois state offers a personal exemption and tax credits, such as the earned income tax credit, and education expense credit. Marginal tax rates refer to the rate you pay at each level of income. Increments of your income are taxed at different rates, and the rate rises as you reach each of the seven “marginal” levels in the current system.

The 2023 state personal income tax brackets are updated from the Illinois and Tax Foundation data. If you filled out physical tax return forms, mail your completed Illinois income tax return to the Illinois no later then April 15th. Please be sure to send your completed tax forms to the correct address for your filing type. Tax credits are a dollar-for-dollar reduction in your income tax bill. If you have a $2,000 tax bill but are eligible for $500 in tax credits, your bill drops to $1,500.

Does Illinois tax Social Security benefits?

They are more likely to see cuts to services as the old pension debts consume the new taxes. This often forces low-income families out of home ownership, or out of the state altogether. Illinois now levies the nation’s highest state and local tax rates on residents, costing each household $9,488 – or more than 15% of their annual income – in 2022, a new WalletHub report found. A city, village or incorporated town can also refund property taxes paid by certain residents who are at least 65 years old. Residents of the Land of Lincoln also get no relief when it comes to property taxes.

If calculating illinois income tax rateroll taxes ever starts to feel like a burden, you might want to review our list of signs it’s time to outsource your payroll. If you have any questions about how to use our Illinois payroll calculator, you can always find definitions and more detailed information in our guide to the payroll process. And keep in mind that we offer easy and affordable online payroll services if you ever want any outside help. Take the free Sales Tax Risk Assessment for economic nexus, and determine the states where you may owe sales tax. The 2018 United States Supreme Court decision in South Dakota v. Wayfair, Inc. has impacted many state nexus laws and sales tax collection requirements. To review the rules in Illinois, visit our state-by-state guide.

How do Illinois tax brackets work?

There are often multiple sales tax rates per ZIP code, county, and city. Illinoisans now pay the highest combined state and local tax rates in the nation. Those taxes take more than 15% of their household income each year. Regarding real estate, the Illinois property tax calculator includes the full set of jurisdictions and their respective tax rate.

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