Illinois Personal Income Taxes

The Illinois Income Tax is imposed on every individual, corporation, trust, and estate earning or receiving income in Illinois. The tax is calculated by multiplying net income by a flat rate. The Illinois Income Tax is based, to a large extent, on the federal Internal Revenue Code (IRC).

Tax Rate

Illinois applies a tax rate of 5% to net income.

Tax Base

The starting point for the Illinois Individual Income Tax is federal adjusted gross income. Federal adjusted gross income is “income” minus various deductions (not including itemized deductions, the standard deduction, or any exemptions). Next, the federal adjusted gross income is changed by adding back certain items ( e.g., federally tax-exempt interest income) and subtracting others ( e.g., federally taxed retirement and Social Security income). The result is “base income.”

The base income earned in Illinois or while a resident of Illinois is then reduced by the number of federally claimed exemptions plus any additional exemptions. The amount of each exemption is $2,000.

Additional exemptions are provided for any taxpayer or spouse who was either 65 years of age or older, legally blind, or both ($1,000 each). The total exemption amount is deducted from base income to arrive at “net income.” The tax rate is then applied against net income.

Local Income Tax

There are no local income taxes in the Illinois portion of the St. Louis metropolitan area.

For details, click here. For the Illinois income tax code, click here.