Illinois (IL) Tax Rates — 2026

Income Tax 4.95%

Sales Tax 8.82%

Property Tax 2.07%

Income Tax

Type: Flat rate — 4.95% on all taxable income

Standard Deduction: N/A (uses personal exemptions or credits instead)

Sales Tax

State Rate6.25%

Avg Local Rate2.57%

Combined Rate8.82%

Groceries: Taxed

+2.25% vs national avg

Property Tax

Effective Rate2.07%

Median Annual Tax$4,744

+1.00% vs national avg (1.07%)

Retirement Income Tax

Social SecurityNO

PensionsEXEMPT

401(k) / IRANO

Estate & Inheritance Tax

Has Estate Tax: YES

Exemption$4,000,000

Top Rate16%

Corporate Tax

Corporate Income Tax Rate: 9.5%

Additional Notes

Illinois has a flat income tax. No standard deduction — uses personal exemptions instead. All retirement income (Social Security, pensions, 401k/IRA) is exempt from state income tax. Groceries are taxed at a reduced rate of 1%.

Compare with another state:

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Best for Retirees

Sources: Illinois Department of Revenue; Tax Foundation, Facts & Figures 2025; IRS Publication 17.