This tool is freely available and is designed to help you accurately estimate your 2025 tax return. The Earned Income Tax Credit (EITC) is a significant tax credit in the United States, designed primarily to benefit working individuals and families with low to moderate income. As a refundable credit, the EITC not only reduces the amount of tax owed but can also result in a refund if the credit exceeds the taxpayer’s total tax liability. This makes the EITC a powerful tool for reducing poverty, incentivizing work, and providing financial support to those who need it most.
- Illinois has a flat income tax that features a 4.95% rate.
- The Tax tables below include the tax rates, thresholds and allowances included in the Illinois Tax Calculator 2023.
- Illinois has a flat income tax of 4.95%, which means everyone’s income in Illinois is taxed at the same rate by the state.
- 21 states and DC continue to tax GILTI despite these challenges.
- The following tax tables are supported by iCalculator™ US as part of the suite of free tax tools available in the US Tax HUB we provide for Illinois.
- But lawmakers could use the results to pursue a constitutional amendment, opening Illinoisans and businesses up to higher taxes without guaranteeing any property tax relief despite the referendum’s promise.
state income tax rates and brackets
Illinois does not have tax brackets, so calculating your rate should be pretty simple. If you have a dollar or $1 billion that is subject to Illinois income tax, you owe 4.95% of that money to the state. New Hampshire exclusively taxes dividend and interest income while Washington only taxes capital gains income. Your Illinois income includes the adjusted gross income (AGI) amount figured on your federal return, plus any additional income that must be added to your AGI. Some of your income may be subtracted when figuring your Illinois base income.
Illinois earned income tax credit (EITC)
- This will help you avoid under or over-withholding, which can lead to unpleasant surprises come tax time.
- And some states apply their tax rates to taxable income, while others use adjusted gross income.
- The tax is applied to wages, salaries, and other compensation within certain thresholds, which are adjusted periodically.
- The state of Illinois offers a personal exemption and tax credits, such as the earned income tax credit and the education expense credit.
- The Illinois Earned Income Tax Credit/Earned Income Credit is for working people with low to moderate income to help reduce the amount of tax they owe.
- There is, however, a convenience fee for the use of a credit or debit card when paying your taxes.
- For details on specific deductions available in Illinois, see the list of Illinois income tax deductions.
Food, drugs and medical appliances are all subject to a statewide tax rate of 1% of purchase price, in addition to local taxes of up to 1.25%, for a total tax of up to 2.25%. 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.
Illinois state income tax rates and tax brackets
The credit amount varies based on the taxpayer’s income, marital status, and number of qualifying children, gross vs net with the intention of providing greater assistance to families with children. The 2.23% effective property tax rate in Illinois is second-highest in the nation, behind only New Jersey. That means the typical homeowner in the Prairie State pays 2.23% of their home value in property taxes. As simple as Illinois tries to make income tax, the state seems to take the opposite approach with sales taxes. There are three rate structures depending on what you are buying. The three categories are qualifying food and drugs, vehicles and general merchandise.
States’ approaches to income taxes vary illinois income tax bracket in other details as well. Some states double their single-filer bracket widths for married filers to avoid imposing a “marriage penalty.” Some states index tax brackets, exemptions, and deductions for inflation, while many others do not. Some states tie their standard deductions and personal exemptions to the federal tax code, while others set their own or offer none at all. These reduce a taxpayer’s total tax bill by some amount, which is in contrast to tax deductions, which only reduce a taxpayer’s taxable income.
There are state-level exemptions for all types of filers and dependents. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. There are three types of residency statuses when it comes to Illinois state tax. They determine what portion of your income the state will tax.
For example, if you are running a small business, there are many simple things that you are able to have tax deducted from. Perhaps office supplies, repairs on your office computers, building repairs, or even purchasing your workers’ suitable clothing for their job (e.g. a plumber should be wearing a boiler suit). While they are little things that not many people think about, your business thrives on these tiny details and therefore you are able to have tax deductions on them. When you prepare your return on eFile.com this is all calculated for you. Also, you will find links to other important Illinois income tax return information and other related features (e.g. tax extension, amendment, etc.).
