Illinois State Income Tax: Rates, Who Pays in 2023-2024

If you paid $1,000 in property taxes in 2023, you could claim a credit of $50 on your income tax return, which equates to $50 less that you end up paying in taxes. 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 average number of housing units valued at more than $500,000 built each month rose steadily for a 57 percent increase by 2021, according to the study. Still, Illinois Realtors member Courney Jones, a leader in residential real estate on Chicago’s South Side, said he’s “not so freaked out about” the prospect of the transfer tax tweaks on the table. Jones is the legislative chair of the Chicago-based Dearborn Realtist Board and the third vice president of the National Association of Real Estate Brokers, the NAR equivalent for Black and brown real estate professionals. It has caused concern among commercial real estate players, who make nine-figure deals that would have their transfer tax costs rise exponentially, sparking fears of investors skipping over Chicago for more business-friendly markets.

Top Personal Income Tax Rates in Europe, 2024

As you begin to fill out your 2023 taxes, you may notice some differences. The IRS made several changes to the income tax brackets to adjust for inflation. Find out about your state taxes—property taxes, tax rates and brackets, common forms, and much more. 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.

Watch the video below to learn how to identify your 2022 federal income tax brackets. 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 https://www.bookstime.com/ income. For example, the Illinois Property Tax Credit is equal to 5% of Illinois property tax paid on a principal residence for single filers with an AGI of $250,000 or less and joint filers with AGI of $500,000 or less.

The Earned Income Credit

Lake County has the highest median property taxes paid at $8,040 according to 2021 data from the Tax Foundation, while Pulaski County near the Kentucky border has the lowest at $647. Most homeowners qualify for the general homestead exemption, which lowers your home’s equalized assessed value, or its partial value used when calculating your property taxes. Other exemptions include the senior citizens homestead exemption — more information is available below. Contact your county assessor or go to the Department of Revenue’s website for more information on property tax relief.Illinois does not tax personal property, such as boats, cars and RVs. The deadline for filing Illinois state and federal tax returns is April 18, 2023. For help estimating your annual income taxes, use AARP’s Tax Calculator.Illinois offers a six-month filing extension automatically, but you still must pay any taxes owed by April 18, unless you file a Form IL-505-I.

• Illinois has no state tax on inheritance, but estates are taxed 0.8 percent to 16 percent after a $4 million exclusion.
• Illinois provides a standard Personal Exemption tax deduction of $ 2,425.00 in 2022 per qualifying filer and qualifying dependent(s), this is used to reduce the amount of income that is subject to tax in 2022.
• Most homeowners qualify for the general homestead exemption, which lowers your home’s equalized assessed value, or its partial value used when calculating your property taxes.
• And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
• 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.

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. Your student must be under age 21, and both of you must have been Illinois residents at the time the expenses were paid. All residents and non-residents who receive income in the state must pay the state income tax. You must pay tax to Illinois on any income illinois income tax rate you earn there if you work there and live in any other state except Wisconsin, Iowa, Kentucky, or Michigan. Illinois has reciprocity with these four states, so residents can cross state lines to work there without worrying about paying income tax to their non-resident state. On top of that state sales tax, local governments can impose their own sales taxes, which can add to the costs of purchases made in different jurisdictions.

Illinois Alcohol and Tobacco Tax

Illinois doesn’t provide specific time frames for issuing refunds, and return processing has gotten slower due to the state’s efforts to curb identity theft and fraud. The state does emphasize that filing electronically and requesting a refund via direct deposit will be the fastest way to get your refund. All income received while a resident, plus income from Illinois sources while a nonresident. There are three types of residency statuses when it comes to Illinois state tax.

Remember that Illinois may have very different deduction laws from the Federal Income Tax, so you may have to write a whole new list of deductions for your Illinois income tax return. Most military pay, including retired pay, is not taxed in Illinois. There are a few exceptions, including military pay you received as a civilian. Nonresidents — those who only live in the state because of military assignment — are not required to report military pay to Illinois. The 2.23% effective property tax rate in Illinois is second-highest in the nation, behind only New Jersey.