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→