Illinois State Tax Brackets, Standard Deductions, Forms

The Illinois Earned Income Tax Credit (EITC), set at 20% of the federal EITC, benefits low-to-moderate-income individuals and families. For instance, the Illinois Property Tax Credit allows taxpayers to reduce taxable income by the amount of property taxes paid on their principal residence, within set limits. Contributions to the Illinois College Savings Pool, known as Bright Start, can also be subtracted, encouraging education savings.

How does Illinois income tax affect residents who work in other states?

Your AGI doesn’t account for any itemized or standard deductions or tax credits that you might also be eligible for. Other deductions are all eventually subtracted from your AGI to arrive at your taxable income, while credits whittle away at your tax bill to the IRS. It’s one of nine states that use a flat tax system rather than a progressive system. Form 8912 is designed for taxpayers to claim credits for holding qualified tax credit bonds, such as clean energy, school construction, or other infrastructure-focused bonds. These bonds help fund essential public projects, promoting advancements in renewable energy, education, and community development. By filing Form 8912, taxpayers can reduce their tax liability while supporting government-backed initiatives aimed at building a illinois income tax rate sustainable and equitable future.

Taxes in Illinois

These include contributions to college savings accounts, ABLE accounts (savings plans for people with disabilities), and income from tax-exempt bonds issued by the state or local Illinois governments. Unlike the federal government and many other states, Illinois does not have tax brackets that impose higher rates on people who earn more. The 2025 crop budgets have cash rent at $340 per acre, the projected average for high-productivity Central Illinois farmland. At that cash rent, break-even prices to cover non-land and land costs are $4.61 per bushel for corn and $11.07 per bushel for soybeans, which are above the projected prices of $4.10 for corn and $10.00 for soybeans. As a result, farmer return from cash rent farmland is negative at -$89 per acre for corn and -$50 per acre for soybeans.

1 – Illinois Standard Deduction

Income tax deductions are expenses that can be deducted from your gross pre-tax income. Using deductions is an excellent way to reduce your Illinois income tax and maximize your refund, so be sure to research deductions that you mey be able to claim on your Federal and Illinois tax returns. For details on specific deductions available in Illinois, see the list of Illinois income tax deductions. Illinois has a flat tax rate system, unlike the progressive system of the federal government.

• Some significant ones include the Illinois property tax credit, the Illinois earned income credit, the K-12 Education Expenses Credit, and the Credit for Illinois Estate Tax Paid.
• In general, the rate ranges from 6.25% to over 8.50%, depending on where the vehicle is purchased.
• Supporters of a graduated income tax system argue that it would allow for a more progressive tax structure, where higher-income individuals would pay a higher tax rate than lower-income individuals.
• All residents and non-residents who receive income in the state must pay the state income tax.

Even the traditional share rent is not expected to provide a profitable alternative at current price and cost levels. Over time, some adjustments are needed in farmland rental markets if prices continue at their current levels of low $4 per bushel of corn and $19 per bushel of soybeans. The projected net income for the 1,500-acre farm with 20% owned, 40% share-rented, and 40% cash-rented Bookkeeping for Painters farmland is $26,010 (see Table 2). That income will likely be near 2024 when the recently released Emergency Commodity Assistance Program (ECAP) payments are included in 2024 income (see farmdoc daily, January 7, 2025). Current 2025 projections would result in a deterioration of the financial position of many farms (see farmdoc daily, February 25, 2025). Calculating taxable income in Illinois begins with an individual’s adjusted gross income (AGI) based on federal guidelines.

Illinois offers an Earned Income Tax Credit (EITC), which puts money directly into the pockets of low-income working families and individuals. A household with a Federal AGI of USD 65,000 or less annually is qualified for an affordable housing tax credit too. Yes, your federal and state tax returns are different and have to be filed separately, though many tax-preparation softwares and e-file service providers can permit you to file both at the same time. Your federal tax return information is the basis of your state return. For more details, review the Illinois Department of Revenue’s full list of individual income tax credits.

• Line 40 was updated to clarify the subtraction for disallowed deductions under IRC Section 280E for cannabis establishments, cannabis cultivation centers, or medical cannabis dispensing organizations.
• Decisions made by the tribunal can be further appealed to the Illinois Appellate Court if necessary.
• Interest on unpaid taxes accrues from the original due date, with a current rate of 3% per annum.
• If you have moved out of Illinois during the tax year or have income from other states, it’s necessary to apportion your income correctly on Form IL-1040-NR, Nonresident and Part-Year Resident Computation of Illinois Tax.

Property taxes vary by municipality, but northeastern Illinois — including Chicago — has significantly higher property taxes than the rest of the state. Illinois’ flat income tax rate means that every resident, regardless of income level, pays the same individual income tax rate of 4.95 percent. Nonresidents who work in Illinois also must pay income tax petty cash to the state, unless they live in Wisconsin, Iowa, Kentucky or Michigan. The only exception is railroad unemployment.More information is on the Illinois Department of Revenue’s website. Watch the video below to learn how to identify your 2024 federal income tax brackets. Yes, in Illinois, there are different tax rates for different income levels.

• The 1,500-acre farm is close to the average of grain farms enrolled in Illinois Farm Business Farm Management (FBFM).
• Those needing extra time can request a 6-month extension, but must still pay any taxes owed by the original filing deadline to avoid potential penalties.
• These bonds help fund essential public projects, promoting advancements in renewable energy, education, and community development.
• Taxpayers can amend their tax returns if errors or omissions are discovered after filing.
• Certain high-income taxpayers in Illinois are not eligible for the exemption allowance.
• Illinois offers tax credits and deductions to lower taxable income or tax liability.

• By filing Form 8912, taxpayers can reduce their tax liability while supporting government-backed initiatives aimed at building a sustainable and equitable future.
• The Illinois Earned Income Tax Credit (EITC), aimed at supporting low-to-moderate income working families, is calculated as a percentage of the federal EITC and can result in a refund if it exceeds the taxpayer’s liability.
• Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription.
• Of the three major tax categories tracked in the national analysis, WalletHub found property taxes consumed the largest portion of Illinoisans’ yearly earnings at 3.81%, followed closely by state excise and sales taxes at 3.78%.
• The projected net income for the 1,500-acre farm with 20% owned, 40% share-rented, and 40% cash-rented farmland is $26,010 (see Table 2).

The federal standard deduction for a Head of Household Filer in 2024 is $ 21,900.00. View how much tax you may pay in other states based on the filing status and state entered above. Illinois applies per-gallon alcohol excise taxes based on the alcohol content of the beverage being sold. Beer will generally be subject to a rate of 23 cents per gallon while wine and liquor are subject rates of $1.39 and $8.55 per gallon, respectively. Our Illinois mortgage rates guide has important information about mortgages in the Prairie State that will help make the process of getting a mortgage a bit easier – whether you’re looking to purchase a property or refinance. Illinois also has reciprocity with the neighboring states of Iowa, Kentucky, Michigan and Wisconsin, which means those states don’t tax Illinois residents who work within their borders.

Are there any tax breaks for older Illinois residents?

If you have moved out of Illinois during the tax year or have income from other states, it’s necessary to apportion your income correctly on Form IL-1040-NR, Nonresident and Part-Year Resident Computation of Illinois Tax. Remember to file a non-resident return if you’ve earned Illinois-source income. Forgetting to report throwable income — including earned wages, interest and dividends, and unemployment compensation — is a common error. Double-check to ensure all income is covered in your returns, to prevent delays in processing or audit triggers.