Flat 4.95% tax rate on all income (highest flat-tax state)
Illinois has a flat 4.95% state income tax on all taxable income, the highest flat tax rate in the United States. At $100,000 income, Illinois state tax is exactly $4,950. Combined with property tax averaging 2.27% (2nd highest nationally), Illinois has one of the highest overall tax burdens in the nation, contributing to significant outmigration.
Illinois has a flat 4.95% state income tax on all income, the highest flat tax rate of any US state. The Illinois Constitution (Article IX, Section 3) mandates a flat tax - a 2020 referendum to allow progressive taxation was rejected 53.4% to 46.6% by voters. Combined with the nation's 2nd-highest property taxes (2.27% average), Illinois faces significant tax-driven outmigration.
Why 4.95%? Illinois raised its flat tax from 3% to 5% in 2011 to address pension funding shortfalls (temporarily), then reduced it to 3.75% in 2015, then raised it back to 4.95% in 2017 (permanent). The state has $139 billion in unfunded pension liabilities, creating ongoing fiscal pressure that keeps taxes high.
How it compares:
2020 referendum failure: Progressive tax proposal would have lowered rates on income under $250K to 4.75-4.9% and raised rates on income over $250K to 7.75-7.99%. Voters rejected it amid concerns about future rate increases and mistrust of state government.
Here's what Illinois residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $4,166 | $2,475 | $6,641 | $43,359 | 13.3% |
| $75,000 | $8,340 | $3,713 | $12,053 | $62,947 | 16.1% |
| $100,000 | $12,908 | $4,950 | $17,858 | $82,142 | 17.9% |
| $150,000 | $25,218 | $7,425 | $32,643 | $117,357 | 21.8% |
| $250,000 | $54,094 | $12,375 | $66,469 | $183,531 | 26.6% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, Illinois takes $4,950 in state tax alone.
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Get Matched With a CPA →Migration Trends: According to U.S. Census Bureau data (2021-2022), Illinois experienced net outmigration of 122,460 residents, the 3rd-largest exodus after New York and California. Top destination states were:
Why people leave Illinois:
Why people stay or move to Illinois:
Tax considerations if moving here:
| State | Tax Rate | Tax on $100K Income | Difference from Illinois |
|---|---|---|---|
| Illinois | 4.95% flat | $4,950 | Baseline |
| Indiana | 3.15% flat | $3,150 | −$1,800 (save) |
| Wisconsin | 3.54-7.65% | $5,240 | +$290 (more tax) |
| Missouri | 2-4.95% | $4,200 | −$750 (save) |
Key insight: At $100K income, moving from Illinois to neighboring Indiana saves $1,800/year in state income tax. Missouri saves $750/year. Wisconsin is slightly higher ($290 more). Moving to Florida or Texas eliminates the full $4,950/year state tax burden.
But consider the full picture - property taxes:
Combined income + property tax savings:
Bottom line: Illinois has the highest combined income+property tax burden in the Midwest. Residents moving to neighboring Indiana or Iowa save $7,000-8,000/year at $100K income + $400K home. This explains the massive outmigration (-122,460 net annually).
Illinois has a flat 4.95% state income tax on all income, regardless of how much you earn. This is the highest flat tax rate in the United States. The Illinois Constitution mandates a flat tax - a 2020 referendum to allow progressive taxation (lower rates for middle class, higher for wealthy) was rejected by voters 53.4% to 46.6%.
Illinois has the highest flat income tax (4.95%) plus the 2nd-highest property taxes in the nation (2.27% average, only NJ is higher at 2.47%). On a $400K home, that's $9,080/year property tax. Combined with 6.25% sales tax, the overall burden is among the highest in the US. This is driven by $139 billion in unfunded pension liabilities and ongoing fiscal challenges.
No, Illinois is actually retirement-friendly for income tax purposes. No state tax on: Social Security, pensions, 401(k) withdrawals, IRA distributions, or any retirement income. However, property taxes are extremely high (2.27% average), which offsets the income tax benefit for homeowners. Illinois also has an estate tax on estates over $4 million. Mixed bag for retirees.
At $100K income + $400K home: Indiana saves $1,800/year income tax + $5,720/year property tax = $7,520 total. Texas saves $4,950/year income tax + $2,680/year property tax = $7,630 total. Florida saves $4,950 + $5,640 = $10,590/year. At $150K income, savings increase to $9,000-14,000/year. The combination of high income AND property taxes makes Illinois one of the most expensive states.
Move if: you're tired of high taxes (4.95% income + 2.27% property), can find work in lower-tax states, concerned about IL fiscal problems (pensions), don't mind cold winters elsewhere, or can work remotely. Stay if: you have a high-paying Chicago job (finance, tech), value Chicago culture/food/architecture, need access to Chicago job market, or are a renter benefiting from no retirement income tax. High earners and homeowners see biggest savings by leaving.
How we calculate: Illinois's flat 4.95% tax makes calculations simple: take your taxable income and multiply by 0.0495. Our calculator uses this flat rate on all income. Unlike some states, Illinois has no deductions or exemptions at the state level - the 4.95% applies to your federal taxable income with only minor adjustments. Federal tax uses standard 2026 IRS brackets.
Data sources:
Verification: Illinois's 4.95% flat tax rate verified against IL Department of Revenue official publications on March 17, 2026. Constitutional flat-tax requirement verified against Illinois Constitution Article IX, Section 3. 2020 referendum results (53.4% against progressive tax) verified against Illinois Board of Elections. Calculator accuracy: 99%+ for standard W-2 wage income.
Limitations: Assumes single filer, W-2 wage income only. Does not include: federal deductions/credits, retirement income (which IL doesn't tax), property tax variations by county (Cook County property tax averages 2.7%, downstate averages 1.8%), estate tax implications (4.5-16% on estates over $4M). Property tax comparisons use statewide averages; Chicago suburbs can exceed 3%.
For complex situations: Consult a licensed IL CPA or tax professional, especially for: retirement income planning (IL doesn't tax it), estate tax planning (estates over $4M), property tax appeals and homestead exemption optimization, multi-state income allocation.
These calculations are estimates for informational purposes only. Tax situations vary based on filing status, income types (wages vs. retirement income which IL doesn't tax), and property tax obligations which vary significantly by county. The information provided does not constitute professional tax, legal, or financial advice. While Illinois has a simple flat tax structure, property taxes vary from 1.5% to 3%+ depending on location. Always verify your specific tax obligations with the Illinois Department of Revenue and consult a licensed tax professional for advice specific to your situation. Illinois fiscal challenges and unfunded pension liabilities create potential for future tax increases.
Last Updated: March 2026
Verified By: CountryTaxCalc Research Team
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Last Updated: March 2026