If you’re moving to the Land of Lincoln or just trying to figure out why your paycheck looks a little light, you’ve probably asked: how much are Illinois taxes, really? It’s a loaded question. People love to complain about the tax burden here, and honestly, they aren't totally wrong. Illinois is a bit of a mixed bag. You get a very simple, flat income tax that doesn't care if you're a barista or a billionaire, but then you get hit with some of the highest property taxes in the entire country.
It’s a weird trade-off.
Living here means navigating a landscape where the state takes a predictable bite out of your salary, but the local government might take a massive chunk out of your home equity. Plus, the sales tax at the register can vary wildly just by crossing the street into a different municipality. Let’s break down what's actually happening with your money in 2026.
How Much Are Illinois Taxes on Your Income?
Illinois is one of the few states left that uses a flat tax rate. This means everyone pays the same percentage regardless of how much they earn. For the 2026 tax year, that rate sits at 4.95%.
Some people love the simplicity. You don't have to deal with the "bracket creep" that happens in states like California or New York. If you make $50,000, you owe 4.95%. If you make $500,000, you still owe 4.95%. There was a huge push a few years back to change this to a graduated system—where higher earners pay more—but voters shot it down. For now, the flat rate is the law of the land.
However, "taxable income" isn't just your gross salary. You get a personal exemption, which helps a tiny bit. For 2026, the personal exemption amount has increased to $2,925. So, you subtract that from your adjusted gross income before the state takes its 4.95%. It’s not a king’s ransom, but it’s something. If you have kids, the Illinois Child Tax Credit is another thing to watch; for the current cycle, the calculation has been updated to 40% of the federal amount for qualifying families.
The Property Tax Gut-Punch
This is where the conversation usually gets heated. If the income tax is the "easy" part of living in Illinois, property taxes are the "hard" part.
Illinois consistently ranks in the top two or three states for the highest property taxes in the U.S. We’re talking about an average effective rate of around 1.83% to 1.96% of your home’s value. In some parts of the suburbs or near Chicago, it feels much higher.
Why is it so expensive? Basically, Illinois relies heavily on local property taxes to fund schools and pensions. Instead of the state government cutting a big check to your local school district, the burden falls on the homeowners in that specific area. This creates a massive disparity. A $300,000 house in a high-tax suburb might have a tax bill of $8,000 or $9,000, while the same house in a different state might cost $2,000 to insure and tax.
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If you're looking at buying a home here, don't just look at the mortgage. Look at the Equalized Assessed Value (EAV). That’s the number the county uses to actually calculate what you owe. You’ll see bills divided among:
- School districts (usually the biggest slice)
- Park districts
- Library funds
- Community colleges
- The county itself
Sales Tax: The Silent Budget Killer
When you head to the mall, the price on the tag is never what you pay. The base state sales tax in Illinois is 6.25%. That sounds manageable.
But wait.
Local municipalities and counties add their own "home rule" taxes on top of that. If you’re shopping in Chicago, the combined sales tax rate is a staggering 10.25%. That includes the state’s 6.25%, Cook County’s 1.75%, the City of Chicago’s 1.25%, and a 1.0% Regional Transportation Authority (RTA) tax.
Starting January 1, 2026, a bunch of places in the suburbs like Cary, Fox Lake, and Round Lake bumped their rates even higher. Some spots in Cook and Kane counties are hitting 11% or 11.5%. It makes big-ticket items like laptops or furniture significantly more expensive than they would be just across the border in Wisconsin or Indiana.
There is one small mercy: "qualifying food and drugs." In Illinois, you generally pay a much lower rate—often around 1%—on grocery staples and medicine. It’s one of the few ways the state tries to ease the burden on lower-income residents, though "luxury" food items or prepared meals at a restaurant are still taxed at the full "merchandise" rate.
Driving and Other "Hidden" Costs
Illinois isn't just taxing your house and your paycheck; it’s taxing your commute. The gas tax here is a beast. As of early 2026, the state motor fuel tax is roughly 48.3 cents per gallon for gasoline and 55.8 cents for diesel. But that’s just the Part A rate.
There’s also a Part B rate based on the average selling price of fuel. When you add it all up, you’re looking at over 65 cents per gallon in pure state tax before you even consider the federal tax or local county fuel taxes. Counties like DuPage and McHenry add their own cents on top of that.
Then there are the "sin taxes."
- Cigarettes: $2.98 per pack in state excise tax.
- Cannabis: This is tiered. Depending on the THC content, you could be paying 10%, 20%, or 25% in tax, plus the standard sales tax.
- Sports Wagering: If you're betting on the Bears on your phone, the state is taking a cut of that too, with new rates for 2026 hitting $0.25 to $0.50 per wager for the big operators.
The Bottom Line for Your Wallet
So, how much are Illinois taxes going to cost you at the end of the year? If you’re a middle-class family making $100,000 with a $300,000 home, your "total tax burden" is likely somewhere between 12% and 15% of your total income. That’s significantly higher than the national average.
The state is currently trying to balance its books by targeting businesses and remote sellers. For example, in 2026, Illinois removed the "200-transaction" threshold for out-of-state retailers. Now, if a company sells more than $100,000 worth of stuff into Illinois, they must collect Illinois sales tax. They’re also getting tougher on people who sell their interests in partnerships or S-corps, ensuring the state gets its 4.95% "exit fee" on those gains.
Actionable Steps to Manage the Burden
If you're feeling the squeeze, there are a few things you can actually do rather than just complaining at the BBQ.
- Appeal Your Property Tax Assessment: This is the big one. Most counties allow you to appeal once a year. If you can show that similar houses in your neighborhood are valued lower, you can save thousands. Don't skip this.
- Max Out Pre-Tax Contributions: Since Illinois taxes your "Adjusted Gross Income," every dollar you put into a 401(k) or a health savings account (HSA) is a dollar the state can't touch.
- Check for the Property Tax Credit: On your IL-1040, you can often claim a credit for 5% of the property taxes you paid on your principal residence. It’s a small "thank you" for paying those massive bills.
- Track Your "Green" Spending: The state recently introduced the Advanced Innovative Manufacturing (AIM) credit and various incentives for "green" home improvements. If you're doing renovations in 2026, keep your receipts to see if you qualify for state-level offsets.
Illinois is a "pay-to-play" state. You get world-class infrastructure, top-tier universities, and a massive economy, but the entry fee is steep. Understanding these numbers is the only way to make sure you aren't overpaying more than you already have to.