Illinois State Income Tax 2023 - 2024

Illinois state income tax rate is 4.95 percent and does not have higher tax brackets for higher-income taxpayers. The state sales tax is 6.25 percent statewide, and municipalities may add an additional 4 cents per gallon for gas and 8.25 cents for diesel. Telecommunications taxes are a bit lower, at about 7 percent.

Illinois does not tax social security benefits, retirement income from IRAs and employer-sponsored plans, or capital gains. However, the state does tax unemployment compensation. It also taxes certain dividends and interest. The state has several valuable tax credits, including the property tax credit, which is equal to 5% of the real estate tax paid on your primary residence.

The Illinois Department of Revenue (IDOR) will begin accepting 2023 state individual income tax returns on January 29, the same date that the Internal Revenue Service begins processing federal tax returns. You can file your return online using MyTax Illinois, the IDOR’s free account management system. You can also use the site to respond to department inquiries and check the status of your refund.

How to File Illinois State Income Tax?

If you live in Illinois and have a state tax liability, you can file your Illinois income taxes online through the Department of Revenue. This is the easiest and most convenient way to pay your Illinois state taxes. You can also make payments by phone or through the mail. However, be careful when paying your state taxes with credit cards, as they may be subject to higher processing fees than other methods of payment.

Individuals can e-file their Illinois state income tax returns with the Illinois Department of Revenue. E-filing is available for both taxable and nontaxable returns. The state also accepts a paper version of the IL-1040. Illinois taxpayers can also visit one of IDOR’s offices in Chicago, Des Plaines, Fairview Heights, Marion, Rockford, and Springfield to receive assistance with their returns. The state also has several online resources and tools to help taxpayers.

If a person fails to file their Illinois tax returns, they will be subject to two different tiers of penalties. The first tier is an initial penalty of the lesser of 2% of their total tax liability or $250. The second tier is an additional penalty of the lesser of 5% of their total tax liability or $500.

Illinois State Income Tax Exemptions

The state of Illinois offers several programs to reduce its residents’ income taxes. Among these are tax credits, which are designed to reduce a taxpayer’s tax bill by some amount. They differ from tax deductions, which only reduce taxpayers’ total taxable income.

Most individuals who work in the state of Illinois are required to pay Illinois state income tax. However, some people may not be required to file a state return. In these cases, the state will still collect taxes based on their earnings and the number of exemptions they claim.

Employees working in Illinois must submit Form IL-W-4 so their employer can withhold the correct amount of tax from each paycheck. They should file a new Form IL-W-4 any time their withholding allowances change, such as when they become married or when they have children.

How Nonresidents File Taxes in Illinois?

If you are a nonresident, you must file Form IL-1040 and Schedule NR if you have Illinois base income (on Schedule NR, Line 46) that is greater than your exemption allowance or you want to claim an Illinois tax refund for any overpayment made by your employer. You must attach a letter of explanation from your employer to your IL-1040.

Illinois State Income Tax Due Dates

The due date for filing an Illinois individual income tax return is April 15 of the year after the tax year, unless it falls on a weekend or holiday. For calendar year filers, this date is also the deadline for making any required Illinois estimated tax payments.