State Tax Guide

Illinois State Taxes: A Simple Guide

Illinois has a state income tax, plus sales and property taxes that affect most residents. This guide explains the basics in plain language for individuals.

ℹ️Important: This is a high-level overview. Tax rules, rates, and local details change over time. Always refer to official Illinois tax resources or a professional for the latest information.

💰Illinois state income tax

Illinois taxes individual income with a state income tax. Key points for most residents:

📋If you are an Illinois resident or you earn income from Illinois sources above certain thresholds, you may need to file an Illinois income tax return

📊Illinois uses its own tax rate structure, separate from federal tax brackets

📝Some items are treated differently for Illinois tax purposes than they are for federal tax purposes

📄 Typical filing: In a typical year, an Illinois resident will file a federal Form 1040 and a separate Illinois state income tax return for the same year, if they meet filing requirements.

🛒Sales and use tax

Illinois imposes a state sales tax, and local governments can add their own taxes, leading to different total rates in different areas.

→Many purchases of goods are taxable; some items may be exempt or subject to reduced rates

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If you buy taxable goods from out of state or online and no tax is collected, you may owe use tax to Illinois

💼 Business owners: If you operate a business, you may have to register, collect, and remit sales tax on taxable transactions in Illinois.

🏠Property taxes

Property taxes in Illinois are primarily controlled by local governments (counties, municipalities, school districts) and are based on the assessed value of real property.

📊Homeowners receive property tax bills from local taxing authorities

🏫Property taxes are often used to fund schools and local services

🏡Some homeowners may qualify for exemptions, credits, or relief programs depending on age, residency, or other factors

📍 Local variation: Because property taxes are local, rates and programs vary across the state. Your county or local assessor's office is the best source for details.

📋Other taxes that may affect Illinois residents

Illinois residents may also encounter other taxes, including:

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Motor Fuel Taxes

Part of gasoline and diesel prices

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Vehicle Registration

Registration fees and related charges

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Local Taxes & Fees

Specific to certain cities or counties

These typically show up as part of specific transactions or bills, rather than through a separate annual return for individuals.

🔗How Illinois taxes fit with your federal return

A typical Illinois resident may face several layers of tax each year:

1️⃣Federal income tax (Form 1040)

2️⃣Illinois state income tax

3️⃣Sales and use tax on purchases

4️⃣Local property taxes if they own real estate

📚 Build your foundation: Understanding the federal basics-like taxable income and how to file your taxes-makes it easier to see where Illinois rules change the picture.

Estimate your tax refund

Calculate your federal and Illinois state tax liability.

Calculate Your Refund→