illinois income tax

Certain types of income are added back to your federal AGI on your Illinois return. Other types are subtracted, resulting in what Illinois calls your “base income.” Your AGI represents your income after adjustmentsare made to it. Adjustments might be for things like student loan interest you have paid or for IRA contributions you made.

He would create a per-child tax credit of up to $100 for individuals earning less than $80,000 and joint filers earning less than $100,000. Under tax rates approved by the General Assembly, the tax rate would drop to 4.75% for the first $10,000 of income for single and joint filers. Income between $10,000 and $100,000 would be taxed at 4.9%, and the rate would remain at 4.95% for income between $100,000 and $250,000. A tax credit is available for income taxes paid to another state if you live in Illinois but work in a state other than one of those with reciprocity.

  • The Illinois Department of Revenue updated its “Questions and Answers” webpage to include Illinois PTE Tax information.
  • Democrats supported SJR 1, and Republicans opposed SJR 1.
  • Tax rates for both corporate income and personal income vary widely among states.
  • Year-round access may require an Emerald Savings® account.
  • Advised private equity companies in regard to state taxes relating to numerous portfolio company acquisitions and divestitures.
  • A flat income tax, which taxes all income levels at the same rate, is required by the current Illinois state constitution.

The vote requirement for constitutional amendments was either 60 percent of votes cast on the ballot measure itself or a simple majority of all of those voting in the election. Republicans and pro-business groups are fighting the proposal, which they contend will make it easier for lawmakers to raise rates, with middle-class taxpayers eventually also getting taxed at high rates. These brackets apply to every individual taxpayer’s income — the first bracket of your income will be taxed at the lowest rate, the second bracket at the second lowest rate, and so on.

Illinois Personal Income Tax Laws: Related Resources

There are some food items that don’t count as a qualifying food. For example, candy and soda are generally subject to the higher “general merchandise” rate, but any candy containing flour is not, for sales tax purposes, classified as candy. In each year that the PTE tax election is effective, illinois income tax the company will need to pay estimated payments if the estimated tax is expected to exceed $500. Under the election, since the PTE is paying the tax, the PTE is not required to remit nonresident withholding on the Illinois distributable share of income to a nonresident owner in the same year.

  • For information on business-related taxes in other states, check Nolo’s 50-State Guide to Business Income Tax.
  • Represented company in defense of successor liability claim arising from acquisition of assets from an assignee for the assignment of the benefit of creditors.
  • Of the 3% who would see higher tax rates under Pritzker’s plan, 85% live in Cook County and the five collar counties, which are home to about two-thirds of the state’s population.
  • Currently, six states—Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming—do not have a corporate income tax.

Four PACs—Coalition to Stop the Proposed Tax Hike, Say No to More Taxes, Chambers Against Progressive Income Tax, and Vote No on the Progressive Tax—raised funds to oppose the constitutional amendment. Kenneth Griffin, CEO of the investment firm Citadel, contributed $53.75 million to the Coalition to Stop the Proposed Tax Hike. “Subtractions” are items that are taxed federally but not taxed in Illinois, such as retirement and Social Security income and contributions to 529 college savings plans.

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Even before the COVID-19 crisis, many residents and businesses were leaving the state because of the high tax burden. If the Amendment passes, it would be the last straw for thousands of small businesses, causing more jobs to leave the state, and making Illinois lose out on investments to rebuild our economy. This would mean fewer jobs and less opportunity for Illinois families. Of the 3% who would see higher tax rates under Pritzker’s plan, 85% live in Cook County and the five collar counties, which are home to about two-thirds of the state’s population. The credit is limited to single taxpayers with federal AGIs of $250,000, or $500,000 if married and filing jointly.

illinois income tax

But what are the actual laws covering our hard-earned pennies in the Land of Lincoln? Here is a brief summary of Illinois personal income tax laws. You can select one of these payment options either after you have e-filed or filed your 2021 Illinois Tax Return. Alternatively, you can pay IL income tax here prior to filing (e.g with an extension). Plus, you can make online Illinois tax estimated payments for next tax year. If you eFiled your taxes and pay online, you don’t have to mail any IL forms (e.g. tax return, extension, or tax estimated form). Currently, six states—Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming—do not have a corporate income tax.

The Illinois State Income Tax For Individual Taxpayers

Beginning January 1, 2020, marketplace facilitators are now required to collect and remit sales tax if sales total $100,000 or more or have more than 200 sales in the state. Taxpayers who are eligible for relief from penalties and interest on late Sales Tax payments are those operating eating and drinking establishments that incurred a total Sales Tax liability of less than $75,000 in calendar year 2019. Transferring funds from another bank account to your Emerald Card may not be available to all cardholders and other terms and conditions apply. There are limits on the total amount you can transfer and how often you can request transfers. MetaBank® does not charge a fee for this service; please see your bank for details on its fees. Severe penalties may be imposed for contributions and distributions not made in accordance with IRS rules.

illinois income tax

Use this payment option if you cannot pay your tax bill and want to get on a payment plan. Oct. 17, 2022, you can complete and sign 2021 Illinois Tax Forms online here on eFile, before you download, print and mail them to the state tax agency. If you are certain that you do not owe taxes, you do not need to file an extension.

Like Family Five, their current tax liability is lower in Illinois than all of the other selected states. If the Governor’s proposal is enacted, they would have lower liabilities in four states and higher liabilities in the other four states, putting Illinois in the middle. Family Two’s Illinois income tax bill is fourth highest among the selected states. Under Governor Pritzker’s proposal, their liability would decrease by 11%, or $271. While they would see relief under the Governor’s proposal, the rankings wouldn’t change. The family would have a higher income tax liability in Iowa and Indiana. Their income tax liability in New Jersey (frequently considered a high-tax state) is dramatically less than their current liability in Illinois, by 64%.

Greg Baise, former president of the Illinois Manufacturers Association, led Ideas Illinois. The Vote No On The Blank Check Amendment, Coalition To Stop The Proposed Tax Hike, Chambers Against Progressive Income Tax, and Vote No on the Progressive Tax PACs were registered to oppose the constitutional amendment. Ken Griffin, the founder and CEO of Citadel, contributed 88 percent of the PACs’ total combined funds.


Illinois will tax any Illinois-source income received by an Iowa resident that is not from wages or salaries. Examples of income that are not wages and salaries and, therefore, not covered under the Iowa-Illinois Reciprocal Agreement are Iowa gambling winnings and unemployment compensation for employment in Iowa. Any wages or salary made by an Iowa resident working in Illinois is taxable only to Iowa and not to Illinois. Any wages or salary made by an Illinois resident working in Iowa is taxable only to Illinois and not to Iowa.

Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The state legislature wrote the ballot language for this measure.

Include a copy of your bill or notice with your payment. Mail the payment to the IL mailing address with payment below.

State Tax Collections: Total Taxes For Illinois Qtaxtotalqtaxcat3ilno

But the measure was defeated, and the flat tax remains. Our Illinois tax lawyers also have extensive experience in transactional matters, from consulting on operations-related transactions, to mergers and acquisitions – in both planning and due diligence. Reed Smith’s State Tax Group has a long history of successfully representing and advising clients with respect to their State of Illinois and local taxes. We have experience with all Illinois taxes, including all City of Chicago and Cook County taxes. Our lawyers draft proposed legislation, comment on proposed regulations, and sometimes just know the right person to contact to address our clients’ concerns. The proposed amendment was on the ballot during the November 3, 2020 election in Illinois as a legislatively referred constitutional amendment. In order to be approved, the measure needed to receive either 60% support among those specifically voting on the amendment or support from 50% of all ballots cast in the state’s November elections.

  • The state of Hawaii was close behind at 12.7%, while Maine (11.42%), Vermont (11.13%) and Minnesota (10.2%) rounded out the top-five.
  • Taxpayers affected by the Amendments should confirm the effect on their Illinois tax lability.
  • Form 1040EZ is generally used by single/married taxpayers with taxable income under $100,000, no dependents, no itemized deductions, and certain types of income .
  • Illinois also requires traditional corporations, S corporations, LLCs, and partnerships to pay a personal property replacement tax.
  • The state started the budget year with a $3.4 billion deficit, $8.5 billion in unpaid bills and an unfunded public employee pension liability of $137.2 billion.
  • Those taxes take more than 15% of their household income each year.

Those with a taxable income of $250,000 or less would retain the same marginal tax rate or see their rate lowered. Rates would increase for those making over $250,000, with the specific rate varying depending on whether a taxpayer is filing alone or jointly. Single filers with a taxable income over $750,000 and joint filers with a taxable income over $1 million would pay the maximum rate of 7.95% on their net income, rather than paying marginal tax rates for each tier of income. The ballot measure would have repealed the state’s constitutional requirement that the state’s personal income tax is a flat rate across income. Instead, the ballot measure would have allowed the state to enact legislation for a graduated income tax. Under the proposal, corporate income would be taxed at flat rate of 10.49%, the third-highest rate in the nation, while the highest bracket for pass-through business income would be taxed at 9.49%, the fourth highest in the nation.

Tax Information

The state of Illinois has a flat income tax, which means that everyone, regardless of income, is taxed at the same rate. That makes it relatively easy to predict the income tax you will have to pay. The income tax rate in Illinois is 4.95%, after an increase from 3.75% in 2017. Illinois also has higher-than-average sales taxes and property taxes. While others try to mislead you, under the current tax system in Illinois, policymakers already have the authority to set any tax rate and to change tax rates at their will. The current system forces policymakers to charge the same tax rate to everyone, regardless of how much money they make.

The resolution was approved in the Senate by a 36–22 vote on May 1 and by the House by a 73–44 vote on May 27. The resolution received two votes more than the 71 votes needed to pass in the House, in what the Chicago Tribune called a “historic vote”.


Itemized and standard deductions are not allowed in Illinois, which is consistent with the state’s flat tax system. Available tax credits can reduce the amount of tax owed, however. Taxpayers are allowed to claim personal exemptions of $2,375 as of the 2021 tax year—the return filed in 2022.

Proposed Tax On Video Streaming And Its Potential Effects

Advised manufacturing company regarding destination sourcing, taxation of foreign royalties, and alternative apportionment. Reversed $2+ million deficiency into $4+ million refund. According to a new ranking, the state of Illinois is in the top-10 most burdensome states in terms of taxes in the United States, but perhaps not for the reasons you would think. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Eithercomplete IL installment Form CPP-1, Installment Payment Plan Request, orForm EG-13-I, Financial and Other Information Statements for Individuals (if you owe over $5,000, including interest and penalties). However, if you still wish to pay by Check/Money Order, you must mail in Form IL-505-I with your payment by April 18, 2022.

Welcome To The Illinois Department Of Revenue

If you’re registered to vote in Illinois, the amendment will be on your ballot for the Nov. 3 general election. You can vote in-person at your local precinct or by mail-in ballot. The 3% of Illinois residents who earn over $250,000 annually will pay more in taxes under Pritzker’s proposed plan. Illinois’ individual income tax increased from 3.75% to 4.95% on July 1, 2017. This credit is for a portion of the expenses you paid for your dependent child or children to attend kindergarten through 12th grade at a public or nonpublic Illinois school.

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