Illinois state income tax
Illinois has a state income tax. It is flat, with a top marginal rate of 4.95%. Flat 4.95% tax rate applies to all individual income regardless of income level Capital gains are taxed as ordinary income (no special lower rate).
Does Illinois have a state income tax?
Yes. Illinois taxes individual income on a flat schedule topping out at 4.95%. Flat 4.95% tax rate applies to all individual income regardless of income level
| Item | Illinois |
|---|---|
| State income tax | Yes, flat |
| Top marginal rate | 4.95% |
| Capital gains | Taxed as ordinary income, up to 4.95% |
| State sales tax | 6.25% (plus local) |
| Avg. property tax rate | 1.88% of home value |
| Estate / inheritance tax | Estate tax (exemption $4,000,000) |
How does Illinois tax capital gains?
Illinois has no separate, lower rate for capital gains. They are taxed as ordinary income at the same rates as your wages, up to 4.95%, on top of federal capital gains tax. See how capital gains tax works in 2026.
What about retirement income in Illinois?
Retirement income is taxed differently from wages in many states. For how Illinois treats Social Security, pensions, and 401(k)/IRA withdrawals, see Illinois retirement taxes.
Sources
- Illinois income tax rates and brackets: Illinois Department of Revenue / Taxation.
- Illinois capital gains treatment: Illinois tax authority.
- Illinois sales tax: Illinois Department of Revenue.