1. What is Illinois Income Tax?

Illinois uses a flat income tax rate system where all taxpayers pay the same percentage regardless of income level. For 2025, the state income tax rate is 4.95% of taxable income.

2. How Does the Calculator Work?

The calculator uses the Illinois state tax formula:

Where:

• \( Taxable\;Income \) — Your total taxable income in USD
• \( 4.95\% \) — Illinois flat state income tax rate for 2025

Explanation: Illinois is one of the few states that uses a flat tax system, meaning everyone pays the same percentage regardless of income level.

3. Importance of Tax Calculation

Details: Accurate tax calculation is essential for financial planning, budgeting, tax filing, and ensuring compliance with Illinois state tax laws.

4. Using the Calculator

Tips: Enter your taxable income in USD. This should be your total income after all deductions and exemptions that are subject to Illinois state income tax.

5. Frequently Asked Questions (FAQ)

Q1: What is considered taxable income in Illinois?
A: Taxable income includes wages, salaries, tips, interest, dividends, business income, and other earnings minus allowable deductions and exemptions.

Q2: Are there any deductions or credits available?
A: Yes, Illinois offers various deductions and credits including property tax credit, education expenses, and retirement income exclusion for qualifying individuals.

Q3: When are Illinois state taxes due?
A: Illinois state income taxes are typically due on April 15th each year, matching the federal tax deadline.

Q4: Is retirement income taxable in Illinois?
A: Most retirement income including Social Security, pensions, and IRA distributions are not taxable in Illinois.

Q5: Can I file my Illinois taxes electronically?
A: Yes, Illinois offers free electronic filing through MyTax Illinois for eligible taxpayers.