The state’s Schedule M offers a full list of the additions and subtractions that the state recognizes. The list changes periodically, so check back each year illinois income tax to ensure that the items you claim are appropriate for that year. Certain types of income are added back to your federal AGI on your Illinois return.

As bad as the tax burden is, Amendment 1 on the ballot Nov. 8 would guarantee Illinoisans’ total tax burdens continue to grow as pensions crowd out a greater share of state and local spending. The public union-backed change to the Illinois Constitution would protect union power and prevent it from ever being diminished without another statewide vote. Illinois doesn’t tax pension distributions or retirement plan income, including IRAs, 401(k) plans and government retirement plans.AARP’s retirement calculator can help you determine if you are saving enough to retire when — and how — you want.

After-Tax Income

In Illinois, the average effective property tax rate is 2.23%, which is one of the highest rates in the country. However, https://www.bookstime.com/ Illinois offers property tax breaks for some retirees. Illinois state taxes are high in some areas and low in others.

• Married couples filing jointly with an adjusted gross income over $500,000, and all other filing statuses with AGI over $250,000, can’t claim the education expense credit.
• How large depends on the amount you earn, as well as where you live and work.
• Expands the rights of employees when there is a change of control of a grocery establishment and amends the definition of grocery establishment to include grocery distribution centers.
• Contact your county assessor or go to the Department of Revenue’s website for more information on property tax relief.Illinois does not tax personal property, such as boats, cars and RVs.
• For Married Filing Joint (MFJ) taxpayers with AGI below $25,500, the standard deduction is $8,500.
• Katelyn has more than 6 years’ experience working in tax and finance.

The reduction in the top marginal individual income tax rate from 5.5 to 4.9 percent was retroactive to January 1, 2022. The Federal income tax also has a standard deduction, personal exemptions, and dependant deductions, though they are different amounts than Illinois’ and may have different rules. The Illinois marginal tax rate used in our example calculation above on this page is 4.95%. That is the tax rate applied to each additional dollar of taxable income you earn.

Income Tax Distributions to Local Governments

It’s one of nine states that use a flat tax system rather than a progressive system. The Illinois Earned Income Tax Credit/Earned Income Credit is for working people with low to moderate income to help reduce the amount of tax they owe. The credit is refundable, which means it may result in a refund. You can only claim the Illinois EITC/EIC if you qualify for it on your federal income tax return and it’s worth 18% of your federal EITC/EIC.