Illinois paycheck guide
How Illinois calculates income tax in 2026
Illinois has one rate, 4.95%, written into a constitution that requires a flat income tax. There are no brackets, so a cashier and a surgeon pay the same rate on their last dollar. What lowers the bill is the personal exemption: $2,925 for each filer in 2026, or $5,850 for a married couple filing jointly, plus another exemption for each dependent.
Illinois has no standard deduction, and the exemption is small, so almost all of your wages are taxed. That is why the effective rate is already 4.47% at $30,000 and barely moves after that, reaching 4.89% at $250,000. Very high earners lose the exemption entirely once income passes a cap set in state law.
Illinois starts from federal adjusted gross income, so traditional 401(k), 403(b), and HSA contributions lower your Illinois taxable income. Contributions to the state's Bright Start and Bright Directions 529 plans are deductible on the Illinois return up to an annual limit.
Worked example: a $75,000 salary in Illinois
Begin with $75,000 of wages and subtract the $2,925 exemption, leaving $72,075 of Illinois base income. At 4.95%, Illinois tax is $3,568, an effective rate of 4.76%.
Federal income tax is $7,670 after the $16,100 federal standard deduction. Social Security takes $4,650 and Medicare $1,088. Take-home pay is $58,024, roughly $4,835 a month. The Illinois $75,000 salary page shows it per paycheck, and the hourly calculator for $20 an hour covers shift workers.
Because Illinois taxes almost every dollar, the state's share of total tax is unusually high at lower incomes. At $30,000, Illinois tax of $1,340 is close to the $1,420 of federal income tax on the same pay.
No city income tax, but watch the borders
Chicago, Aurora, Naperville, Rockford, Springfield, and Peoria do not tax wages, and no Illinois county or school district does either. Illinois also has no state disability or paid leave payroll deduction, so the state's 4.95% is the only state-level line on most stubs.
The exception is for commuters who cross into Missouri. Metro East residents of Belleville, Edwardsville, or Alton who work in the city of St. Louis pay the city's earnings tax on those wages, on top of Missouri income tax, with Illinois giving a credit for tax paid to Missouri.
Most employers without a retirement plan must enroll workers in Illinois Secure Choice, a state-run Roth IRA program. Those contributions come out of your pay after tax, and you can change the amount or opt out.
Form IL-W-4 and the reciprocity agreements
Illinois withholding comes from Form IL-W-4, separate from the federal W-4. It asks for the number of exemption allowances you claim, and Illinois withholds 4.95% of wages above those allowances. If you hold two jobs, claim your allowances at only one of them so the exemption is not counted twice.
Illinois has reciprocity with Iowa, Kentucky, Michigan, and Wisconsin. Residents of those states who work in Illinois file Form IL-W-5-NR with their employer, and Illinois tax is not withheld; they pay their home state instead. Illinois residents working in those states file the matching form with their employer there.
Indiana and Missouri are not part of the agreements. An Indiana resident commuting from Hammond or Gary into Chicago owes Illinois tax on those wages and claims a credit at home, while Indiana county tax still applies.
How Illinois compares with its neighbors
At $75,000, Illinois ranks 46th of 51 for take-home pay, and every neighbor leaves more. Indiana's 2.95% rate keeps $1,385 more in a single worker's pocket, Iowa $1,370, Kentucky $1,061, Missouri $1,034, and Wisconsin $624. Those neighbors' figures exclude their local taxes, which in Indiana counties and some Kentucky and Missouri cities can narrow the gap. See Illinois vs Indiana or Illinois vs Wisconsin.
Illinois looks much better higher up. At $150,000 it climbs to 37th, because states with graduated brackets push their high earners into rates above 4.95% while Illinois stays flat. Retirees also benefit: Illinois does not tax Social Security, pensions, or 401(k) and IRA withdrawals.
What to expect at your income
Earning under $50,000
Illinois is tougher than most states on lower wages because the $2,925 exemption is the only shield. Even at $30,000, a single Illinois worker hands the state $1,340, an effective 4.47%, and keeps $24,945. At $50,000 the bill is $2,330 and take-home pay is $40,025, about $3,335 a month. A full-time worker earning $41,600 a year keeps $33,692 after $1,914 of state tax. Claim the Illinois earned income credit and, with children, the state child tax credit when you file.
Earning $50,000 to $150,000
Every additional dollar in this range costs 4.95% in Illinois tax. On a $100,000 salary, Illinois collects $4,805 from a single filer, who nets $74,375, or about $6,198 a month. A married couple filing jointly at $100,000 owes $4,660 after two exemptions totaling $5,850. Pre-tax 401(k) and HSA contributions save the 4.95% state rate on top of a 22% federal rate, and Bright Start 529 contributions trim the state bill further.
Earning over $150,000
A single filer at $150,000 pays $7,280 to Illinois and takes home $106,511, and at $250,000 pays $12,230, an effective 4.89%, and keeps $170,952. The flat rate means Illinois ranks better for high earners than for the middle class. Bonuses and equity pay are taxed at the same 4.95%. Earners well above this range lose the personal exemption altogether once they pass the state's income cap.
Illinois paycheck tips
Neighbors: file Form IL-W-5-NR
Residents of Iowa, Kentucky, Michigan, and Wisconsin who work in Illinois should give their employer Form IL-W-5-NR so no Illinois tax is withheld.
Two jobs: claim the exemption once
Each employer assumes you get the full $2,925 exemption. If you have two jobs, claim zero allowances on the IL-W-4 at the second one to avoid owing at tax time.
Deduct Bright Start 529 contributions
Illinois lets you deduct contributions to its 529 plans up to an annual limit. The deduction lowers your Illinois tax when you file, not your withholding.
Indiana commuters: claim the credit
Without reciprocity, Indiana residents working in Illinois file an Illinois nonresident return and claim Indiana's credit for tax paid to Illinois.
Save for a tax-free retirement
Illinois does not tax 401(k) or IRA withdrawals, so traditional pre-tax contributions save 4.95% now and can avoid Illinois tax in retirement if you stay.
Common mistakes
Expecting a standard deduction
Illinois has none. A $75,000 earner is taxed on $72,075, not on a figure reduced by a deduction like the federal $16,100.
Assuming Chicago has a city income tax
It does not. If a local tax appears on your stub, it is likely from another state's city, such as St. Louis, or a payroll error.
Letting Illinois withhold from a Wisconsin resident
Without Form IL-W-5-NR on file, an Illinois employer withholds Illinois tax, and you must file an Illinois return to get it back.
Moving to or from Illinois
Moving to Illinois
Moving to Illinois from any neighbor raises state tax for a middle-income worker: $1,385 a year compared with Indiana and $624 compared with Wisconsin at $75,000. There is no city income tax, though Chicago's sales and property taxes are high. File an IL-W-4 with your employer and a part-year Illinois return for the year you arrive.
Leaving Illinois
Leaving Illinois for Indiana or Iowa saves a $75,000 earner about $1,300 to $1,400 a year before local taxes, and a no-income-tax state saves the full $3,568. If you are retiring, remember Illinois already exempts most retirement income, so the case for leaving rests on wages, not pensions. File a part-year Illinois return for the year you move.